How To Trade A Fifty Billion Dollar Trend That Could Outpace The Cannabis Boom?

February 08, 2019 - By: Baystreet Staff


- 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 shift in healthcare could rival this new industry as the biggest health insurer in the U.S., Medicare & Medicaid, try to save money by moving patients out of hospitals into smaller healthcare centers and home quickly

- Medicare is saving millions each year already according to a recent study and may save almost $60 billion in the coming years through this huge trend reversal. It's creating big opportunities for companies and investors that capitalize with the right technology and businesses

- Getting patients home quickly is being enabled, in part, by remote monitoring devices that allow a doctor to keep an eye on or diagnose a patient from afar. BTCY has a platform of these medical devices, with another possible approval in 2019, and is entering a booming market. Their closest rival iRhythm (IRTC) has quadrupled in stock price since an IPO four years ago

Few trends ever see the kind of growth that has taken companies like Aphria Inc (NYSE: APHA) and Cronos Group (NASDAQ: CRON) from zero to hero. By 2021 according to a report from the Brightfield Group, legal marijuana products will be a $31 billion industry globally, and the move towards legalization in major economies has made for some amazing opportunities for investors.

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 hospitals and into smaller ambulatory surgery centers, and using remote and virtual health services. Medicare is keen to save money because they pay for the healthcare for almost all seniors in the United States - they're the biggest single "insurance company" in the country. Medicare is saving billions each year just by getting patients out of the hospital and into smaller more efficient centers, and using virtual care technologies. According to a study from UC Berkeley they could be saving as much as $57.6 billion in just ten years [1] - 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 sales each 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 changes 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-hitters 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 own as they enter the same growth phase. Continued commercial success should equal big returns for shareholders.

[1] https://www.ascaconnect.org/viewdocument/medicare-cost-savings-tied-to-ambulatory-surgery-centers

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