- Cryptocurrencies and related stocks have been big winners in 2016 and 2017. Speculation is rampant, which is why it makes sense to be looking at the high-value and high-returning health care space as well
- Biotricity (BTCY) could receive Food and Drug Administration clearance for their medical device Bioflux within days, and stock is priced well below recent acquisition of similar company at 3x BTCY's current share price
NEW YORK, NY / ACCESSWIRE / December 13, 2017 / Cryptocurrencies and stock markets are booming, and money is being made hand over fist. Small, unknown companies have seen their share prices rise astronomically with any cryptocurrency or blockchain affiliation. Like Bitcoin Investment Trust ( GBTC), or MGT Capital Investments ( MGTI), rising 120% and 140% each in the last week!
Meanwhile, medical device and healthcare stocks have climbed 160% since 2012, also hot as investors realize these companies were underpriced. For good reason - the global population is getting larger and living longer, but with more chronic ailments. Investors recognize that this industry isn't going away anytime soon, and it remains an attractive place to invest.
So which is better: an unknown new asset class or a company like Biotricity which has a FDA approval decision looming any day?
Blockchain: The Future of Banking?
Serious and storied investors like Oak Tree Capital's Howard Marks have called bitcoin "not real" and JPMorgan's Jamie Dimon called it a fraud this summer. Eighty percent of respondents to a December CNBC survey said the current valuation of bitcoin is a bubble.
Meanwhile, speculators are having a heyday, with bitcoin now up 2100% YTD. Dave Chapman, Managing Director of cryptocurrency trading firm Octagon Strategy, sees the price of bitcoin exceeding $100,000 before the end of 2018, and eccentric software pioneer John McAfee has said the coin will reach $500,000 within three years.
There are few who dispute that the blockchain technology - whereby information is stored in a public but encrypted ledger - will change economies. Blockchain has arrived, and it's here to stay.
The question is how...and how valuable it, and cryptocurrencies like bitcoin, can become along the way. No one knows the future of cryptocurrencies even as they're going increasingly mainstream. They could continue to appreciate as they become accepted by more individuals and companies. Or, this could be the precipice of a peak, and cryptocurrencies could decline as speculators realize there's no intrinsic value.
The future is to be determined, but savvy investors have also made considerable returns with healthcare stocks in the last few years, especially in medical devices. The thesis makes sense - people are living longer, but with more chronic ailments. like heart failure, diabetes, and other chronic but treatable "aging" disorders.
Chronic Ailments A Great Place To Invest
In this space, another relative unknown is going through price discovery: Biotricity (BTCY), as their unique medical device, approaches possible clearance for marketing from the US Food and Drug Administration (FDA) any day.
The device in question is called Bioflux, and it's a remote cardiac monitor that sends constant data to a remote monitoring center, to help physicians diagnose and monitor patients with atrial fibrillation or suspected atrial fib. These kinds of devices are reimbursed by private insurance and Medicare at around $800 to $1,000 per diagnosis period, meaning that the cheap-to-make hardware can be a very lucrative business for companies in the space. Just look at Biotelemetry (BEAT) which is valued at $1 billion based on their cardiac monitoring approach.
This under-the-radar company Biotricity received word from the USFDA this fall that they would need to submit additional testing around the carrying pouch for Bioflux, which is similar to a phone in size. Those results were submitted, and the company should hear back sometime this month, even as soon as this week! On November 15, the company announced that they had filed their response to the FDA with the additional information requested and that a response was expected from the FDA within 30 days. The carrying pouch was apparently the last piece of the puzzle, and this material has been used in the past for medical devices, according to the company, meaning that it should be cleared by the FDA.
In a proven industry like cardiac monitoring, Biotricity's Bioflux is getting attention for the right reasons: a big market opportunity, a compelling product, and an attractive commercial model. The global cardiac monitoring market is projected to reach $28 billion by 2021, according to research firm Markets and Markets. Bioflux is small, and monitors EKG data continuously, compared to other products on the market that only send periodic EKG readings to the remote monitoring center, and Biotricity plans to incentivize physicians with improved economics for the prescriber. It could be a win-win.
US FDA clearance would send Biotricity into this hot sector, and other companies have been bought for significant amounts. Biotelemetry bought LifeWatch AG for $250 mln this year for the company's similar technology in cardiac care. That's over three times BTCY's current market value!
With small-cap companies, there are always risks. Biotricity needs to not only receive the FDA's clearance to market Bioflux, but also needs to execute on the commercialization of this technology, which can be tricky and expensive. Should management fail to secure proper launch plans, the company could be in for a hard road.
Savvy traders have profited from cryptocurrencies, but investing in healthcare stocks has been a profitable trade for years. An aging population in the U.S. and increasing burden on the system have made remote cardiac monitoring a great investment in the last few years, and that's likely to continue.
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SOURCE: One Equity Stocks