Remote control: 5 medtechs set to benefit from the surge in demand for tele-health solutions
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The coronavirus-induced market carnage of the last few weeks has rattled plenty of investor nerves.
But as with any major correction, some industries feel the brunt of the impact while for others, the dramatic shift presents an opportunity.
Among the collapses of the past 30 years, the current paradigm shift is unique in that it’s been caused by an external (and unexpected) health crisis.
This time, consumer-facing industries such as hospitality (pubs and cafes) and travel (airlines, cruise ships) are bearing the brunt of an unprecedented demand-side shock.
But the global health pandemic also provides a chance to test the robustness of business models for companies that are bringing new medical technologies to market.
And there’s evidence local investors are starting to take notice, after some sharp moves early this week among some of the ASX-listed companies in the space.
More broadly, the impact of the coronavirus has resulted in an increased level of urgency for solutions in tele-health — devices and products to help patients manage their healthcare needs remotely.
In view of that, we’ve taken a look at five medtechs with a diverse range of products that could be poised to benefit amid the ongoing fallout from COVID-19.
Speaking with Stockhead recently, HeraMED CEO David Groberman described the platform as a “Google Maps for pregnant women”.
Its core products are comprised of the HeraBEAT foetal heart-rate monitor, which forms part of the broader HeraCARE software package. The software-as-a-service (SaaS) based platform then collates and presents the relevant data via a smartphone app.
“It’s like a guided search for key data such as heart rate and blood pressure — key components in assessing the well-being of the foetus and the expecting mum,” he said.
“When you follow the instructions through the app, you’re getting a medical level understanding of the health of your baby.”
Like many ASX-listed companies, shares in HeraMED have come under pressure in recent weeks amid the broader market selloff.
But in a way, its core product offering is leveraged directly to the trend towards home-based health solutions.
HeraMED shares jumped almost 20 per cent yesterday after the company announced it had received a large number of queries from healthcare providers globally. And Groberman said it helped reinforce the market dynamics that were already underway.
“If you look at the trend over the last four to five years, it’s all about how healthcare is going into a transitional stage,” he said.
“There’s not enough resources. At the same time, we’re trying to change an industry which is very conservative by nature. Now, the health standards are saying ‘don’t leave home, don’t drain resources’. So it’s an exciting time because it feels like those walls have been shattered.”
The Brisbane-headquartered company is developing smartphone app software used in the diagnosis and management of respiratory disease.
Solutions in the space have become significantly more urgent in the post-COVID-19 world, given the disease does most of its damage to the lungs.
Amid the current market malaise, shares in the company slumped from above 24c to below 7c over the last four weeks.
But investors on the lookout for the newfound demand for tele-health solutions would’ve been rewarded yesterday, as ResApp shares more than doubled off their recent lows with an intra-day gain of 110 per cent.
It followed an announcement that the company is joining forces with tele-health provider Phenix Health, which will see the ResAppDx-EU diagnostic tool integrated into Phenix’s existing smartphone app.
Commenting on the announcement, Phenix CEO Dr Gillian Alexis said the company had seen a 30 per cent monthly increase in consultations since the start of the corona pandemic.
By assisting general practitioners to evaluate patient symptoms during a tele-health consultation — in particular if an infection has reached the patient’s lungs — GPs will be better able to determine whether a patient should attend a hospital or clinic for additional care,” ResApp CEO Tony Keating said.
Another business with operations directly tied to the broader tele-health shift underway is Intelicare, which has built a home-sensor solution for the aged care sector.
The company has lodged its prospectus with ASIC, and is currently accepting bids as part of a book-build run by joint lead manager JP Equity Partners. The offer will stay open until mid-May, after which Intelicare plans to list on May 29.
Speaking with Stockhead, CEO Jason Waller said the outbreak of the pandemic added a sense of urgency to the need for effective home-care solutions.
“Our product was built specifically to foster the ability of people to independently live in their homes for longer. So a health crisis where you’re seeing imposed isolation or quarantine is right in its wheelhouse,” Waller said.
Intelicare’s home-sensor equipment tracks movement patterns and provides access and data analysis for families and carers.
Waller said it has the potential to act as part of a longer-term solution to coronavirus, allowing carers to carry out services for multiple patients while maintaining the requisite levels of separation.
As part of the surge in resources devoted to tackling the crisis, Waller said Intelicare had already had early discussions with governments at both state and federal level about how it could contribute to a practical solution.
“Having an Intelicare system installed in the home allows carers and families to monitor deterioration,” he said. “If the patient is moving normally, or if they find themselves struck down in bed, you’ll see that.
“Then ideally, the software will connect with a team that can respond to those alerts and quickly reengage back with a GP or hospital service.”
With a new management team in place, Respiri is focused on a commercial rollout by Q4 2020 for its Wheezo platform — a remote monitoring device for asthma sufferers.
Amid the market chaos, Respiri shares have been in suspension since last Thursday as the company completes a $2m share placement to fund product development, manufacturing and marketing.
Stockhead caught up with Respiri CEO Marjan Mikel, who said he was “very pleased with the response” after the offer was oversubscribed, even in tough market conditions.
The Wheezo device is a SaaS-based platform that monitors various aspects of asthma management, from breathing issues to external data such as pollen in the air.
It has an obvious connection to the current pandemic, given that asthma patients are directly in the firing line for a respiratory virus such as COVID-19. But from a business perspective, “nothing’s really changed”, Mikel said.
“Obviously, from a medical perspective asthma patients are going to be more susceptible to complications from coronavirus.
“So you need to be able to monitor what’s happening with the patient when they’re at home and away from clinical setting. And that’s our core value proposition; we monitor wheeze rates, medication usage, and the immediate environment at any given time.
“If a patient is diagnosed, then our SaaS platform would allow greater transparency around what the patient’s going through as it relates to their asthma condition.”
The other pre-IPO company on the list, Atomo specialises in home-based blood test diagnostics that can be used to test for diseases such as HIV.
The business is backed by some local business luminaries including property magnate Lang Walker, along with the health investment fund run by the Bill & Melinda Gates Foundation.
According to an AFR report, the company plans to push ahead with its IPO despite the market chaos, after receiving strong interest from global health companies about the effectiveness of its home-care solution in testing for coronarvirus.
Atomo published its prospectus last week, “in response to multiple COVID-19 rapid blood test requests”, it said in a media release.
Walker said the company had 300,000 devices on standby in the event it received fast-track regulatory approval from the Australian government to deploy the device in COVID-19 testing.
Atomo said a key advantage of its product was the ability to get results quickly — within around 15 minutes — and its deployment could help alleviate some of the existing pressure on Australia’s health system.
“Unlike current laboratory or professional use tests, rapid blood tests using an integrated self-test Atomo device are suited to distribution to the broader community, and do not require clinical expertise or expensive laboratory equipment,” the company said.