- Remote patient monitoring, through smaller cheaper technology, is transforming medical care in the U.S. Cardiac care is a major beneficiary, and now major government agencies are signalling that this sector could be a top priority in the coming years.
- New medical device from Biotricity (BTCY) could shake up handful of existing companies in cardiac remote monitoring, as their new device has some clear improvements over older technology. With revenue and new product announcements this year, BTCY could move significantly higher in 2018 and 2019.
The average investor may not have noticed the signals, but the United States government is indicating exactly where healthcare is going in the next decade... and possibly where to invest now.
Last year, the Centers for Medicare & Medicaid Services (CMS) outlined major changes to the way they pay for "remote healthcare services" and "remote patient monitoring." In essence, by using technology-enabled monitoring devices that track a patient's well-being remotely, doctors may actually be able to make MORE money than ever before with this tech.
The way we do health care is shifting, and digital, tech-driven solutions will be the next wave of medical innovation. Companies pioneering the remote monitoring subsector of healthcare have ripped higher in the last few years, like cardiac monitoring companies iRhythym (IRTC) and Biotelemetry (BEAT), both up multi-fold as their products have gone mainstream, and each with hundreds of millions in revenue yearly.
The newest entrant, Biotricity Inc (BTCY), is hot on their heels with a newly approved remote cardiac monitor called Bioflux, and the launch of this device is gaining momentum since approval in December in one of the largest markets globally - cardiac care. With their first revenue about to emerge this year and more new medical devices planned for 2018, BTCY is on track to become a major medical device upstart. With the right execution, BTCY could be a $12 stock in no time with even minimal revenue.
Remote Monitoring Quickly Changing The Immense Cardiac Care Space
Remotely monitoring patients through small technology and connected devices is a logical next step in the evolution of healthcare - think remote blood sugar monitors for diabetics, for example.
One vertical where remote monitoring technology is streamlining efficiency is in cardiac care, one of the largest medical device markets globally. This sector has changed in the last few years as new smaller devices have been created that can improve one of the most burdensome components of cardiac care - diagnosis. Now, patients can be sent home with a tiny phone-sized device that can monitor their heartbeat. The data can later be analyzed by specialists or the patient's doctor to determine how often, and how severe, their arrhythmia might be, and how to properly treat it. This gets patients out of the hospital quickly, and back to normal life, saving them and the healthcare system money.
The global cardiac monitoring market is projected to reach $28 billion by 2021, according to Markets and Markets. This should be no surprise, as heart failure and related heart conditions are one of the primary reasons for hospitalization in the U.S., and they take a huge burden on the U.S.' healthcare system as a whole.
How Biotricity Is Quickly Filling The Need With a Superior Device
You can see that the change is happening already in the performance of iRhythym (IRTC) and Biotelemetry (BEAT), both of which sell remote EKG devices, as their known, in the U.S. Sales have seen steadily increasing in the last three years, and shares of both companies have appreciated as well: BEAT has gone from $2.15 in 2013 to as high as $41 this year; IRTC from $17 to $80 in the three years that it has been public. Investors who saw the trend have done well.
Biotricity is an unnoticed upstart...so far. Biotricity's new Bioflux remote cardiac monitor was approved just months ago, in December, and will be one of the first products like this on the market, with some major upgrades over older options. Bioflux monitors and then transmits a patient's heart rhythm data in near real-time, analyzing and collecting data on the device and periodically uploading to the cloud through cellular technology. There, the patient's doctor and trained specialists at a monitoring facility can interpret the results for proper diagnosis. Interestingly, Bioflux may be one of the best products on the market today. IRhythm's Zio device, for example, requires being sent BACK to an analysis center rather than transmitting remotely, which can slow diagnosis and leaves more burden on the patient.
Biotricity is in the midst of expanding their sales team and pilot sites for Bioflux. According to recent press, the launch is going well, with expansion across six states as of May ahead of the company's previous timeline for the product launch.
Bioflux just won the prestigious MedTech Breakthrough Award 2018 for "Best Remote Patient Monitoring Solution" and with institutes like the San Antonio Endovascular & Heart Institute (SAEHi) already adopting the device, we're optimistic about the company's revenue this year.
Importantly, the company is also taking a more unique approach to getting doctors on board by helping them keep more of the economics from using these products going to their practice. In parallel with changes from Medicare, that could be a huge incentive to rapid adoption of Bioflux.
Regulators Are Signaling That This Market Is A Top Priority
Historically, Medicare has provided limited coverage for telehealth and remote patient monitoring (RPM) services-both of which are fairly new with the advent of cheap mobile technology in the last 20 years. What coverage existed before was restricted by so-called "bundling" processes where a physician could only charge for one service if it was part of a suite of services. For instance, using a remote cardiac monitoring device to keep track of a patient's EKG data and diagnose heart rhythm irregularities.
CMS had classified remote patient monitoring under "miscellaneous services" for years. The technology could be grouped with other services that DID have reimbursement codes, like telehealth doctor visits, but it didn't have its own quality codes to indicate proper reimbursement processes or prices. The CMS has been slow to act, as the government typically is, on remote patient monitoring technology.
That's changing quickly.
Late last year, for example, CMS UN-bundled CPT code 99091, meaning that in 2018 providers will be able to get reimbursed separately for time spent on collection and interpretation of health data that is generated by a patient remotely and then digitally stored and transmitted to the provider.
The signal that this sends to the markets is huge. Seema Verma, the current Administrator of CMS, said, "These rules move the agency in a new direction and begin to ease [the] burden by strengthening the patient-doctor relationship, empowering patients to realize the value of their care over volume of tests, and encouraging innovation and competition within the American healthcare system." Also last year, the US FDA introduced a "pre-certification program" that would set up a regulatory framework for software as a medical device where companies with established, tried, and tested quality assurance protocols would be able to update their devices faster.
These efforts from the government are clear - they want to streamline medical device and software innovation and provide great monetary economics for physicians. Investors who recognize the signals should be preparing for this boom.
Revenue and New Products Could Drive BTCY Higher in 2018
It doesn't take much for small-cap healthcare stocks to change sentiment quickly, as evidenced by recent moves from companies like Tapimmune Inc. (NASDAQ: TPIV) and EDAP TMS (NASDAQ: EDAP), both of which rallied with updates on their pipelines.
Biotricity will report their first ever product revenue in the coming months, a major possible value-driver for a stock that has been trading in a tight channel through the spring of 2018 - it could break out any day. This year is also about expanding Biotricity's product portfolio, from one device to multiple. Biotricity could be introducing their next RPM device sometime this year based on comments from management. That's another event to be thinking about, as BTCY appreciated 3X in 2017 based on the introduction of Bioflux.
If Biotricity can capture even $10-30 million in sales from Bioflux, it could be worth as much as $300 million based on these very conservative revenue figures. IRTC, just a few years into their own product launch, is doing over $100 million in annual sales and valued at over $1.5 billion, or a 15X Price-to-Sales multiple. For BTCY, that would be a $12 or more stock price.
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