- Biotricity is developing the Bioflux remote cardiac monitoring system that could disrupt the $22 billion cardiac monitoring market.
- U.S. FDA and CMS recently announced improved reimbursement for remote monitoring devices such as BTCY’s.
- USFDA clearance of Bioflux could come as soon as next week and BTCY should make a big move when announced.
- Companies like BTCY are positioned to benefit from a massive shift towards high-tech, high-value products like this device.
Between the United States Food and Drug Administration (USFDA) and the Centers for Medicare & Medicaid Services (CMS), the signals are all there - remote patient monitoring is on the verge of a major market expansion, and Biotricity (OTCMKST:BTCY) exemplifies the kind of company that can benefit. Biotricity’s Bioflux remote cardiac monitor is on the verge of an FDA clearance this month, possibly, and investors have overlooked just how valuable this device could be as CMS move towards new high-value reimbursement procedures.
Biotricity's most recent contact with the FDA in November indicates that the company's first USFDA clearance could come any day.
With approval before year-end and possibly as soon as next week, 2018 could present multiples of upside for BTCY traders as the name goes mainstream, much like the Madrigal Pharmaceuticals (NASDAQ:MDGL) rally higher recently as investors realized the potential for their drug, MGL-3196, to enter the highly valuable liver disorder market. Big shifts in perception can lead to big shifts in market value for small companies.
FDA, CMS Signalling Big Changes To Cardiac Monitoring Potential
On November 30 the USFDA made a major step forward in the acceptance and validation of remote patient monitoring with the clearance of private AliveCor’s single-lead KardiaBand in the U.S. This is the first FDA-cleared medical device accessory for Apple Watch, and it can record an EKG in 30 seconds with a touch of its integrated sensor and send it to the Apple Watch itself.
KardiaBand is far from the first remote EKG monitor. But combined with some recent changes at the Centers for Medicare & Medicaid Services (CMS), the USFDA's signaling should be obvious to in-the-know investors: the era of remote patient care is upon us, and a few top-notch public companies are poised to benefit.
In the cardiac space, remote patient monitoring refers specifically to the ability to assess EKG data from afar, allowing patients to go about their lives while being diagnosed for cardiac issues over the course of a few weeks through some worn or implanted device. Depending on the technology, remote monitoring can include one-time EKG evaluations, like with KardiaBand, or continuous monitoring that is sent to real-time, live diagnostic centers for evaluation, as with Biotricity's Bioflux.
Beginning in 2018, CMS will support clinicians who leverage remote monitoring tools, like wearables and smart devices, and use patient-generated health data in care management. CMS had long classified remote patient monitoring under “miscellaneous services” and included them in bundled payment programs. The technology could be grouped with other services that do have reimbursement codes, like telehealth doctor visits, but it didn’t have its own great codes. As with most things in the government, the CMS has been slow to act on remote patient monitoring technology, but that’s changing.
Beginning next year, CMS has unbundled remote patient monitoring, and the profit potential in this market is tremendous.
Doctors who use remote patient monitoring devices will be making more money in the coming years as the CMS, which provide care for most elderly and ailing Americans, likely pays more for remote monitoring processes. That includes devices like KardiaBand, and Biotricity’s Bioflux. The incentives for doctors will go beyond just improved care, which research has shown time and again is the case with high-quality remote monitoring, but also because doctors and their offices will make more money.
Doctors making more money means rapid adoption.
Market Growing By Leaps And Bounds and CMS Improving Profit Potential
According to a research report by Berg Insight, by the end of 2013 more than 3 million people worldwide were being monitored remotely by professional caregivers. By 2018, they predict that number will rise by 6X, to 19 million.
The market opportunity and future demand for remote EKG products, specifically, is impressive: the global cardiac monitoring market is projected to reach $28 billion by 2021 according to research firm Markets and Markets.
Atrial fibrillation affects as many as 6 million patients in the US and 34 million worldwide according to the American Heart Association. The National Stroke Association estimates that about 35% of patients are asymptomatic and still undiagnosed, contributing to 130,000 deaths each year, almost 4x the number of people killed each year in car accidents. Atrial fib and similar cardiac issues are one of the largest U.S. causes of death yearly.
The CMS and USFDA recognize that remote cardiac monitoring is critical to good patient care and can improve and save lives. A study presented at the 2014 Heart Rhythm Society Meeting showed a 33% reduction in the risk of death in patients with Boston Scientific implanted cardiac devices who were remotely monitored via the company's wireless remote monitoring system, compared to patients who were not remotely monitored but had the same devices installed! Remotely monitored patients also had a 19% reduction in hospitalizations for any cause compared to the other patients.
The possible life-savings and cost-savings are immense. Of course, the big medical device companies like Medtronic (NYSE:MDT) and Boston Scientific (NYSE:BSX) dominate the impantable cardiac device market. But fast-moving small companies have more recently shaped the remote monitoring industry, like publicly traded iRhythm Technologies, Inc (NASDAQ:IRTC), Biotricity, (OTCMKTS:BTCY), and BioTelemetry (NASDAQ:BEAT).
Morgan Reed, who is director of the tradegroup Connected Health Initiative, recently told www.mhealthintelligence.com, "These new rules are an important step forward for America’s connected health innovators, doctors and, most importantly, patients...Previous CMS rules created serious disincentives for doctors to consider using new technologies."
Even giants like Qualcomm are on board. Robert Jarrin, Qualcomm's Director of Wireless Health Public Policy called the move "huge" and "really demonstrates how timely [remote patient monitoring] is."
BTCY’s Bioflux Tops Competitors And Should Hit Market Imminently
KardiaBand is actually a somewhat unexciting product for those in the know: it has just one lead, and it doesn’t allow for continuous EKG monitoring. The patient has to choose when to record an EKG reading based on their symptoms (shortness of breath or arhythmia). In reality, many suspected atrial fibrillation patients aren't even symptomatic, meaning that KardiaBand's data might not even be that helpful. The product is really directed at consumers rather than doctors, who are supposed to pay for a yearly subscription to record 30-second EKG reports, which can then be sent to anyone, and presumably a physician.
Biotricity's Bioflux is leaps and bounds ahead, by comparison. Bioflux is a small phone-like device with multiple leads that continuously collects EKG data around the clock as the patient goes about their life. The results are sent to a remote monitoring facility, which can send reports to the prescribing physician.
In November the company sent what may be the last piece of their approval application to the USFDA, which could make a decision on Bioflux's U.S. approval/clearance by the end of the year... a huge possible catalyst for BTCY.
Most remote cardiac monitoring applications are initiated by the caring physician and subsequently monitored by the physician, or a third party diagnostic center, as well. Under current processes, most doctors barely make any money when referring patients to remote cardiac monitors from other companies, even though these types of devices are billed at around $800 to $1,000 per diagnosis period.
Biotricity's approach with Bioflux will turn this on its head. Although details are minimal for competitive purposes, Biotricity plans to incentivize physicians to use this top-notch device by offering better economics...more money for doctors to prescribe them.
The Last Step: Approval Could Come Any Day
Bioflux just filed a response to the FDA's last set of questions in November with, information regarding the Bioflux's cloth harness. This was on Nov 15, and the company expected to receive further communication from the FDA within 30 days, which could mean a 510(k) clearance, or approval to market the device, on or before December 15!
Bioflux's market application could be cleared within two weeks, which could result in major gains for BTCY as investors realize what this clearance means for market adoption. And the stock is coiled for its next move higher having retraced to the $3.00 level, a point of previous resistance that should act as support now that it has been cleared with significant volume. Like shares in Digital Power Corporation (NYSE:DPW), which recently consolidated just under $2.00, BTCY could be ready for the next springboard higher off of this level.
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