Forget FANG? Remote Monitoring Stocks Are Where Smart Investors Are Creating 5-10x Returns
Apple's (AAPL) latest Apple Watch addition is an ECG device. It's not comprehensive enough to let doctors diagnose heart conditions, but it is the kind of early warning sign that could get more people in to see their doctors with concerns.
The big opportunity for investors is remote cardiac monitoring devices, like those from Biotricity (BTCY) and iRhythm (IRTC). Doctors use their small ECG devices to send patients home and monitor their heart rhythm over the next few weeks to properly diagnose an arrhythmia.
IRTC, as an established company, has seen their stock price go from $17 to $75, while BTCY has just received FDA clearance and launched their new device. Considering the market size and rapid growth, investors long BTCY could see (incredible) IRTC like returns for investors as BTCY continues to scale the business in 2019.
NEW YORK, NY / ACCESSWIRE / December 19, 2018 / Apple (AAPL) is emerging as a new player in health monitoring. When the company introduced their fourth generation of the Apple Watch in 2018, the headline-grabbing feature wasn't size or processing power...it was a built-in electrocardiograph (ECG). Taking an ECG, which is a measure of the heart's electrical pulses, requires little more than 30 seconds of holding a finger on the watch's crown while your heart's electrical activity draws a red trace across the watch's screen. Once complete, the watch will tell you if it captured normal heart beats or something irregular.
If there's something out of order, this ECG alone isn't enough to diagnose heart conditions like arrythmia, and doctors won't be sending patients home with a prescription based on their Apple watch results. But it can be critical in putting that process into motion. An irregular heartbeat alert from your Apple watch is enough to get most people to schedule a doctor's visit, where most physicians will begin the process of figuring out if and what is going on with their heart.
That's why the Apple watch could drive even greater market expansion for one of the bigger healthcare trends of the last few years: cardiac monitoring, and specifically remote monitoring.
The market for cardiac monitoring and cardiac rhythm management devices is expected to reach USD $25.12 billion by 2022 according to Markets and Markets research. It's a big market and growing larger as the incidence of cardiovascular diseases. Apple's entrance could be a huge boon to getting at-risk patients into doctors' offices.
Pure-play companies in the cardio space like Biotelemetry (BEAT), iRhythm (IRTC) and Biotricity (BTCY) are all building revenue on their portfolios of cardiac monitoring devices. The first two are older companies but have performed incredibly well as their cardiac monitoring products have gained traction. As the newest entrant, and with an award-winning device now FDA approved, Biotricity (BTCY) could be poised for a breakout as their market launch gains steam.
Cardiac Monitoring Growth Fueling Public Market Companies
When a doctor suspects a patient may have some kind of irregular heartbeat, the first step is a detailed ECG. The problem is that the heartbeat issue is just that, irregular, meaning that it may only happen once a day, or every few days. Because a doctor can't keep a patient hooked up with multiple leads to a ECG device in the hospital for days/weeks at a time (at least not economically), for the last twenty years a Holter or Event monitor has been the solution. These devices go home with a patient, who wears the device hooked up through leads, for days or weeks at a time. The device records all or some of their ECG data, and after the diagnostic period the doctor can download the data and take a look at what's going on.
In the last 5 years, there's been a big move towards smaller, high-tech devices that also transmit data remotely, by cellular connection. Companies with great products using this improved technology have reaped the benefits as doctors move to use these continuous monitoring devices. The growth in the market for cardiac monitoring devices is fuelling a host of winners in the public markets. Large-caps like Abbot Labs (ABT) have had success, but it is smaller companies that are stealing the show with advanced devices over the last few years.
Biotelemetry (BEAT) has seen their stock rise from $2.50 in 2013 to $75 in 2018 based on a portfolio of monitoring products.
Irhythm (IRTC) has rocketed from a $17 IPO in 2016 to as high as $95 per share in 2018 with only a single device.
Biotricity is The Latest Entrant With Big Potential Returns On The Horizon
Biotricity (BTCY) is the latest MCT entrant with a new product called Bioflux. It was named MedTech Breakthrough's Best Remote Patient Monitoring Solution of 2018 after being approved in late 2017, and the company began their product launch into select markets around mid-2018. Biotricity has put together an impressive advisory board that speaks to how opinion leaders see the Bioflux device, including the National Medical Director for National Cardiovascular Partners and pioneers in cardiovascular sugeries.
While it's early in the product's launch to draw conclusions about sales potential, IRTC reported third quarter sales of $38.1 million and they have a market capitalization of $1.9 billion! Investors are excited about their revenue potential with a Price-to-Sales ratio of about 12X based on this quarterly figure, thus with even small sales BTCY could be worth substantially more than today as the market launch continues in 2019.
In 2019, the company will have their first full year of sales, and they plan to expand their portfolio of devices into more remote monitoring verticals. They have a second Bioflux device that is similar to IRTC's Zio for which BTCY is seeking approval in early 2019. And their next device, it appears, will focus on fetal health, a new and growing vertical as pregnant women seek more information about their unborn children. The company is striving to build a suite of remote monitoring tools for a variety of verticals.
How Apple's Latest Watch Can Get More PatientsUsing These Devices
Apple's ECG device may, in fact, create even more demand for physician-approved cardiac monitoring products, like Bioflux. More patients noticing irregular heartbeats using their Apple watch means more patients heading into the doc to find out what's going on. There, doctors will typically use Holter, Event, or Mobile Cardiac Telemetry (MCT) devices like Bioflux or Zio that connect and transmit ECG data wirelessly. In other words, Apple Watch isn't a competitor, it's a gateway for companies in the space.
Apple has had similar ancillary effects in markets before. Consider how the app store drove an entirely new business segment and the arrival of companies like Glu Mobile Inc. (GLUU) and Zynga Inc. (ZNGA). Apple may drive a similar move for this entire cardio monitoring sector, and growing entrants like BTCY could benefit. IRTC is a $1.6 billion company, which is what makes BTCY so interesting, at just $20 million in market capitalization. If BTCY continues to grow its market share in what is arguably one of the most attractive markets in healthcare, investors long BTCY will likely enjoy incredible venture style returns.
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