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Why This Undiscovered Device Stock Could Be Worth 3x

  • With a multi-billion dollar market opportunity, companies in the cardiac monitoring arena have been big wins in the public realm. IRhythm (IRTC) shares have gone from $12 to $90 since their IPO a few years ago, as they're growing quickly and addressing a big market with their unique Zio device, which monitors a patient's heartbeat for irregularities remotely. Other private companies like Corventis have been acquired for $150 million and more with similar devices.
  • Biotricity (BTCY) is one of the more recent entrants here with their Bioflux cardiac monitor, and they're now planning on a second product called Biopatch that should open up the market even further. That could be cleared by the FDA in early 2019, an important event for the company. With acquisitions like Corventis and LifeWatch AG as comps, some commercial traction from Biotricity could and a second FDA clearance justify a similar valuation, or over 3X higher than where the stock has been recently trading.

NEW YORK, NY / ACCESSWIRE / October 4, 2018 / With its latest public announcement, Biotricity (BTCY) is entering a new and promising medtech market that could catapult the company to a higher valuation in the coming years. Their newly announced cardiac monitor Biopatch is expected to be U.S. FDA cleared in early 2019 according to their press release, and this device will join some of the most loved cardiac monitoring products out there: iRhythm's (IRTC) patch Zio had $35.5 million in second quarter 2018 sales, and other companies with similar products have been acquired for more than $150 million in the last few years.

Biotricity is a medical device company, and their first product, a remote cell-phone-like ECG device for measuring a patient's heartbeat while they're on the go called Bioflux, was cleared by the U.S. FDA in December of 2017. They're launching that device in the U.S. now, but the company is also moving to expand their product portfolio - Biopatch will be their second device and could readily expand the addressable market.

Biopatch Is Biotricity's Newest Device in A $25 Billion Market

The cardiac monitoring and cardiac rhythm management market is expected to reach $25.12 billion by 2022 according to Research and Markets.

Remote monitoring is one of the fastest growing industries. Doctors are now using small patches or handheld phone-like devices to monitor a patient's heartbeat, through ECG, remotely while the device uploads data to the cloud by cellular signal. They can then evaluate for irregular heartbeats called arrhythmias, or other possible problems with a patient's heart. This can be done for days or weeks at a time in order to properly diagnose and then treat a heart disorder. This is much easier than keeping a patient in the hospital hooked to a large ECG device.

Biotricity's first product is called Bioflux. This device utilizes wired leads leading to the patient's torso, connected to a pocketable transmitter. It's in use by some major health centers, like the San Antonio Endovascular & Heart Institute, and Biotricity is launching throughout most of the U.S. in 2018.

Now the company is adding Biopatch, a product that will adhere directly to the patient's chest and communicate via Bluetooth with a transmitting hub. This kind of technology makes the Bioflux platform even more attractive for physicians as they will have multiple options in their diagnostic arsenal, and the patch will appeal for patient's with less complex issues. This stands to broaden the addressable market for Bioflux.

Apple's ECG Watch Announcement Should Expand Demand For These Products

Apple's (AAPL) recent announcement that they will be adding medical-grade ECG capabilities to the newest Apple Watch should come as a welcome advancement for this entire industry.

This is a consumer-grade wearable, and the most likely use case is for patients to attempt a self-diagnosis based on their Apple Watch ECG readings. When they tell their doc, most industry watchers then expect physicians to prescribe a dedicated device, like Bioflux or Biopatch for further follow-up. In essence, the Apple Watch will only increase awareness of arrhythmias, and subsequently attempts to diagnose them with respected devices.

Could BTCY Be Worth Over $150 Million With Right Pieces in Place?

A few comparable small companies in the private and public realm make the case that with the right product advancement and sales force in place Biotricity shares could be worth significantly more over time. It has its risks, and Biotricity will likely need to raise more money in order to advance their business. As a smallcap company it carries particular risks, and it could be worthless in the long run.

IRhythm (IRTC) is the most relevant public company in this sector. They sell the Zio device, an ECG patch that is sent in to an analysis center after a month of use, and they are on track to have sales of over $130 million from this product this year. The company is valued in the public markets at $2.21 billion on the NASDAQ, and IRTC shares have climbed from $12 to $90 in a few years since their IPO based on the promise of a great product in an immense market: cardiology. Amarin Corp. (AMRN) is another fine example of the interest in this space, rocketing from $3 to $18 on the success of their fat-lowering fish oil pill in a huge clinical trial.

Corventis was a private company that developed the SEEQ mobile cardiac device. It was acquired by Medtronic (MDT) in 2014 for over a reported $150 million specifically so that the larger company could bolt it into their Cardiocom home health monitoring business. The cardiac monitoring company BioTelemetry (BEAT) purchased another early innovator in this space called LifeWatch AG for CHF$280 million in cash and stock in 2017, in order to take on their suite of cardiac monitoring products.

All in all, these are good comparison valuations for a company like Biotricity (BTCY) as they will soon be in a similar position to both Corventis and Lifewatch with multiple products. $150 to $200 million could be a fair valuation for Biotricity with early sales and an expanded product portfolio. For BTCY, that would be a stock price of 3X its recent trading range, over $6.00.

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