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The 38th edition of the JP Morgan Healthcare Conference, kicking off this week in San Francisco, will see a broad mix of companies presenting their business plans and growth prospects to investors. While the industry bellwethers - Medtronic, Johnson & Johnson, Abbott et al - will make their usual appearance, there are several new names in the agenda, including small-caps and private firms, as well as up-and-coming players from the burgeoning digital health space. Here are just five of those companies that could pique investor interest.
The Alphabet subsidiary started 2019 with its coffers bulked up by a cool $1 billion in new capital, which it said it will use to invest in strategic partnerships, global business development opportunities and potential acquisitions. Indeed, Verily has increasingly been the go-to partner for both pharma and medtech players wanting to tap into the company’s deep expertise in all things digital. While it won some new customers, such as Novartis, Otsuka, Pfizer and Sanofi for its Project Baseline digital platform for clinical trials last year, there'd been developments in a number of its existing joint ventures, like the virtual diabetes programme Onduo (set up with Sanofi), surgical robotics company Verb Surgical (now fully owned by partner Johnson & Johnson), and bioelectronics medicine firm Galvani Biosciences (set up with GlaxoSmithKline).
It would be interesting to see what impact these developments - both the good and the bad - will have on Verily and what other plans it has in the pipeline in the new year.
This small-cap company has seen attractive annual revenue growth rates of around 50% for the past three years from sales of its Zio XT wearable patch-based system for ambulatory cardiac monitoring. Last year, iRhythm got further clinical backing of its wireless, battery-less system - designed to provide continuous monitoring of the patient’s heart rhythm to detect atrial fibrillation - when data from its mSToPS study showed that patients diagnosed with AFib by Zio had a significantly lower rate of hospitalisations and emergency room visits in the 12-month follow-up compared to the non-monitored control group.
The company also closed out last year by inking a deal with Verily to develop a system that can track AFib in asymptomatic patients, a population which is believed to be twice as big as that for symptomatic AFib.
A focus at JP Morgan will likely be on how well iRhythm can maintain this rate of growth and how it plans to further capitalise on the asymptomatic AFib opportunity.
Silk Road Medical
For those looking for the next big thing in transcatheter cardiovascular interventions, they might be interested in Silk Road Medical’s TCAR (transcatheter carotid artery revascularisation) procedure, which has the potential of being to carotid artery stenting (CAS) what TAVR (transcatheter aortic valve replacement) is to open heart surgical valve replacement. The company floated on the Nasdaq last year, with its shares trading at an opening price that was nearly twice as high as its offer price. Additionally, Silk Road got a boost from a bull run of positive clinical studies demonstrating the safety of its Enroute TCAR system and also its superior efficacy in treating carotid artery disease patients compared to CAS.
Livongo was another IPO success in 2019, with its share price surging as the company made its debut on the Nasdaq in July. The firm has developed digital programmes for managing diabetes, pre-diabetes and hypertension and all three programmes were given preferred status for those indications in Express Scripts’ digital formulary - the first formulary for digital and mobile health apps and devices. Analysts believe this latest endorsement from Express Scripts consolidates Livongo’s status as a provider of such chronic disease management digital platforms. What investors would likely be looking out for is how the company intends to maintain growth and differentiate itself from existing competitors as well as new ones in a space that can get crowded very quickly.
One of medtech’s unicorns is Butterfly Network, which chants the same mantra of many healthtech companies in wanting to build a technology that democratises healthcare. It seeks to do this with iQ, a handheld ultrasound device designed to perform full-body scans at even low-resource settings and which costs significantly less than a conventional ultrasound system. The privately-held firm got FDA clearance for iQ in 2017 and at the end of 2019, it got CE mark approval, expanding the potential market for this technology. It had indicated previously that it wants to have a worldwide presence - 2020 could bring more international approvals and perhaps, if the market adoption rates of iQ are attractive enough, a potential acquisition from a large imaging player looking to bulk up its portfolio and accelerate commercialisation of the technology.
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