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An Unknown Stock and a $50B Regulatory Trend Could Result in a Cannabis Like Breakout

  • Investors have been all over the trend in new marijuana upstarts as this increasingly legalized industry goes mainstream. By 2021, it should be a $31 billion market globally, and there have already been major winners among public company investors.
  • A major shift in healthcare could rival this new industry as the biggest health insurer in the U.S., Medicare & Medicaid, tries to save money by moving more procedures (and patients) out of hospitals into smaller surgical centers and get them out of the surgical setting rapidly.
  • Medicare is already saving billions each year according to a recent study and is hoping to save almost $60 billion in the coming years through this huge cost cutting measure. However, even though hospitals are losing out, massive opportunities are being created for companies that benefit from taking care of patients 'outside' of the hospital.
  • Remote patient monitoring, already a big and lucrative business, is likely to become a whole lot larger. Investors that pick the companies that perform in this space, are likely to be handsomely rewarded.
  • Biotricty (BTCY) is an emerging player in this space that recently received FDA clearance for their remote monitoring device. BTCY is entering a booming market with a product that they believe to be superior to most of their rivals. If they're right, BTCY investors could witness a breakout that looks similar to that of marijuana names.

NEW YORK, NY / ACCESSWIRE / November 20, 2018 / Few trends ever see the kind of growth that has taken companies like Canopy Growth Corporation (TSE:WEED.TO) and Aurora Cannabis Inc (ACB) from zero to hero. The move towards legalization in major economies has made for some amazing opportunities for investors. By 2021 according to a report from the Brightfield Group, legal marijuana products will be a $31 billion industry globally. Marijuana investors should start paying attention to another government-driven move that's happening right now, and could be creating another $50B industry right under our noses.

The Centers for Medicaid & Medicare Services (CMS) are saving huge amounts of money by getting patients out of the hospital and into smaller ambulatory surgery centers, and companies that enable this move could be set for a significant tailwind. Medicare is keen on saving money because they pay for the healthcare for all seniors in the United States - they're the biggest single insurance company. Medicare is saving billions each year just by getting patients out of the hospital and into smaller more efficient settings. According to a study from UC Berkeley they could be saving as much as $57.6 billion more over the next 10 years - streamlining costs is a major focus for CMS.

Like Cannabis Legalization, Medicare Push Will Create Opportunity For Investors

As Medicare continues the push towards non-hospital solutions to surgery and patient care that gets patients home quickly, the market for these kinds of monitoring options should continue to expand.

Companies that benefit from this transformative move in healthcare dollars should do well as a result. One key technology that's powering the move away from hospitals in recent years is the growth in quality remote monitoring devices that allow doctors to keep an eye on patients, and diagnose them, without keeping them in the hospital, where the costs rack up quickly. CMS and care providers need great monitoring solutions to push this trend further. Large companies like Medtronic (MDT) and Abbott (ABT) should continue to meet demand, while smaller companies like iRhythm (IRTC) and Biotricity (BTCY) make headway with new innovations in remote care.

As this $50B shift in healthcare dollars continues, innovators are set to benefit in a big way.

Heart Rhythm Monitoring Has Been Booming

These small companies provide remote heart monitoring products, one of the biggest remote monitoring sectors today, where small devices can help a doctor get their patient out the door and diagnose faulty heart rhythms (arrythmias) remotely.

IRythm's (IRTC) Zio device only launched nine years ago and is already generating over $120 million in saleseach year; they reported $38 million in sales in Q3 2018 alone. IRTC hasn't gone near it's $17 IPO price from 2016 and now trades at over $70.

The heart monitoring company Biotelemetry (BEAT) has gone from $2 to $65, and their device sales are over $100 million each QUARTER.

Biotricity (BTCY) launched their heart monitoring device in mid-2018 and so the launch is just getting out of the gate. Called Bioflux, this is an FDA-approved (approved in December 2017), medical-grade remote patient monitoring device that monitors a patient's ECG in real-time, periodically uploading to the cloud via embedded cellular technology. The first Bioflux sales launch is underway, and the company is now developing Biopatch, an ECG patch much like IRTC's Zio device that the company expects to release in Q1 2019 as a smaller alternative to Bioflux's 3-lead system for some less complicated patients.

Biotricity also appears to be developing a solution for maternal/fetal monitoring, a highly attractive market (growing to $2.3 billion by 2019 according to Markets And Markets) as most pregnant families are willing to pay handily for assurance that their child is doing well.

Medicare Is Even Making It Easier To Get Paid

The regulators are acting quickly to make it easier for innovators to make money. In early 2018, CMS added new "CPT codes" to allow physicians who use remote monitoring to get paid specifically for this process. They're evaluating a whole bunch of new changes for 2019, too, that would further optimize things for docs who put remote monitoring to use. Remember, there are $50 billion or more of healthcare dollars out there that could be saved by CMS.

The companies on the bleeding edge of this boom will benefit. Interestingly, Biotricity has been attracting some high-profile cardiology specialists to a new medical advisory board, even though their Bioflux has only recently been launched. The involvement of these hard-hitter may speak to the quality of Bioflux and Biopatch as the launch is underway, and it could be just a matter of time before these new devices rival that of companies like IRTC and BEAT.

IRTC has quadrupled in the last few years from their IPO as Zio has begun to generate substantial sales - BTCY could be the next remote monitoring company to watch as they get into the same growth phase.

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