- Cardiovascular remote monitoring solutions have been big successes for companies like iRhythym (IRTC) and Biotelemetry (BEAT); the latter has climbed from $2 to $48!
- New entrant Biotricity (BTCY) is jumping into the same market with a potentially superior product and under-appreciated market valuation. They received FDA clearance at the end of 2017, and their upcoming sales figures, even conservatively, could send this $3 stock to $9 or more in due time.
- BTCY expects to be prepared with two more products in the next 6-9 months, and they could all be on the market by the end of 2019.
With their latest investor update, Biotricity Inc. (BTCY) just dropped a major hint that most investors have been missing so far... key product updates are coming later this year.
Biotricity is a medical device company that just recently received their first FDA approval, and the company is on track to report their first revenue in the coming quarters. Bioflux is a remote patient monitoring device that monitors a patient’s ECG in real-time, analyzing and collecting data on the device and periodically uploading to the cloud via embedded cellular technology.
Bioflux is in the market and garnering increased interest from the company's first anchor clients, who are placing repeat orders according to CEO Waqaas Al-Siddiq.
But importantly, the company just announced that their second device, called Bioflux 2.0, will likely be ready to file for an FDA clearanace from the FDA between the end of Q4 and early 2019. Another approval event could send BTCY flying if history is any indicator.
Remote Monitoring Solutions Creating New Demand in The $28B Cardiac Industry
According to the Centers for Disease Control and Prevention, 11 million patients in the United States have a heart rhythm disorder or arrhythmia. Diagnosis relies on tests such as ECGs (electrocardiograms) to determine the severity of the disorder.
The most recent advancement in cardiac monitoring is continual Mobile Cardiac Telemetry, or MCT, consisting of around-the-clock patient heart monitoring through a small device and small leads on a patient's chest. In the case of iRhythm's Zio device, this is a small wearable patch that gets mailed to an analysis center every two weeks.
The MCT space has grown with improved technology, similar to wearables, and doctors are increasingly turning to simple, small devices like Zio. The global cardiac monitoring market is projected to reach $28.0 billion by 2021, according to Markets and Markets, and over time more and more of this market to move towards remote, software-driven products as the evidence builds that they can improve outcomes for patients. For the companies - and investors - operating in this industry, that could be and has been huge.
Investors Are Winning With Cardiac Monitoring Companies
You can see that the change is happening already in the performance of iRhythym (IRTC) and Biotelemetry (BEAT), both of which sell remote ECG devices, as they're 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. Amazingly, iRhythm generated $98.5 million in revenue last year with their ONLY product, the Zio Device, just two years after their IPO Wall Street is in love with IRTC, but they have yet to pick up on Biotricity (BTCY). This smaller company received FDA clearance for their own product, called Bioflux, in December of 2017 and is now in the midst of going commercial. Sales have begun, and the company should report their first revenue generation in the coming months.
Bioflux is a small, phone-like device with cables leading to electrodes on the patient’s chest, exactly like an in-hospital ECG. The device is small enough that the patient can go home and about their normal life. Meanwhile, Bioflux records and transmits their ECG data to a remote monitoring facility where it can be accessed in real-time by the patient’s doctor. Ultimately, this streamlines the diagnosis process - possibly even more-so than the ZIO device, which requires being mailed in to the service center.
New Devices Potentially Within a Year
Biotricity expects to file their SECOND FDA clearance application later this year, for a new Bioflux 2.0. This enhanced device will incorporate cloud-based Artificial Intelligence, improving diagnostic accuracy and efficiency and making this streamlined approach more attractive to not only doctors, but also payors within the system.
And, the company is also now bringing forth a planned consumer-grade wearable, called Biolife. Biolife is a personal heart monitor for individuals who are either at risk or already diagnosed with cardiovascular disease. The monitor will provide clinical-grade information pertaining to their ECG, respiration, physical activity, calorie burn, core body temperature, and other lifestyle management capabilities. Most importantly, Biolife will provide actionable feedback so that individuals can better manage their heart condition themselves. This is a medical grade wearable for the consumer market, and it's a smart expansion for a company with know-how in the medical device space. Biotricity expects to have prototypes available before the end of 2019.
By 2019, Biotricity could be marketing TWO or even THREE products, and sales from first-generation Bioflux could already be substantiating their investment. Pipeline announcement are known to move healthcare stock, like the recent moves from CEL-SCI Corporation (CVM) or Benitec Biopharma Limited (BNTC).
As explained below, even conservative sales estimates for this new company could justify a $9.00 stock price.
Biotricity Worth $9+ With Even Conservative Sales Estimates?
Biotricity is a small-cap company and carries risks. The company may need to raise additional capital in order to finance its business, and Bioflux is entering a market where larger companies are already established. Health care investing is already a volatile space, and device companies are known for either being multi-bagger winners or complete zeroes; you could lose all of an investment in BTCY.
Based on how IRTC is received by investors, and the fact the BTCY is still an undiscovered company, this smaller upstart's upcoming revenue stream could quickly rationalize a stock price even 3 or 4X higher than today's share price in the coming years.
IRhythm is a $1.5 billion company, with just $99 million in sales last year. This implies a 15X Price-To-Sales multiple, one metric from which investors determine fair value for publicly traded companies. Even $20-30 million in sales in the coming years and a similar 15X Price-to-Sales ratio for BTCY would indicated a market value of $300 to $450 million, or a stock price of $9 to $14.
With the Bioflux launch underway and the potential for two new product announcements late this year, BTCY could be putting in a bottom before a major move as investors recognize this undiscovered company. Based on sales of even $20-30 million in the coming years, BTCY could be on track for a 200% or more move higher - their last FDA approval sent BTCY soaring as high as $17.00.
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