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Biotricity’s Bioflux Represents New Paradigm in Cardiac Monitoring

02/23/2018


Biotricity (OTC:BTCY), a medical device company located in Redwood City, CA, is developing products focused on improving monitoring and treatment of chronic diseases.  The company’s flagship product, Bioflux, is a mobile cardiac telemetry (MCT) device that allows physicians to remotely monitor and diagnose their cardiac patients by providing real-time electrocardiography (ECG) data. 
  
Bioflux is supported by the company’s proprietary software, customizable reporting and 24/7 monitoring center, affording physicians a turnkey solution to remote cardiac monitoring.    

It is registered as a Class II device by FDA, received 510(k) clearance in December 2017 and is indicated for “use by patients who either have or are at risk of having cardiac disease and those that demonstrate intermittent symptoms indicative of cardiac disease and require cardiac monitoring on a continuing basis for up to 30 days.”  

Bioflux’s real-time data monitoring means that physicians can respond in case of an emergency (such as due to bradycardia, tachycardia and atrial fibrillation) as well as providing significantly more information (as compared to traditional hospital-based ECG machines) with which to base diagnosis and treatment decisions. 
 
Recording up to 1k readings per second with the data stored to the cloud, Bioflux affords relatively enormous data sets and provides highly specific and detailed reports and analysis to physicians.  Able to seamlessly fit within physicians’ current workflows and billable under existing CPT codes, Bioflux was designed to be disruptive for all of the right reasons yet not disruptive to physicians’ operations. 

And on the patient side, Bioflux should be able to leverage surging growth of the wearables medical device markets.  The relatively massive recent growth in interest of personalized and real-time heart-health data (as evidenced by ramping sales of Fitbit’s and related follow-on products) indicates consumers (i.e. patients) are receptive to ‘wearables’, have a desire to be more informed about their cardiovascular health and want to take a greater role in health-related decision-making.   
 
Biotricity intends to sell the Bioflux hardware to physicians and medical facilities and license the software.  Biotricity will bill a monthly rate on a per-patient basis.  With FDA clearance and a recent $2.4M equity raise, Biotricity is now turning their attention to launch and initial commercialization activities.  The company expects to introduce the device to the U.S. market before the end of 1H 2018.  In the meantime, they will hire sales staff, finalize marketing materials and potentially look to enter strategic partnerships.  While Bioflux will be the company’s first product launch, they do not expect it will be their last and recently announced that they plan to leverage artificial-intelligence (AI) to expand the capabilities of their patient-monitoring technology.  They expect to file for FDA clearance of an AI-powered version (i.e. next-gen) of Bioflux by Q3 and, if all goes well, launch it before current year-end.       

Cardiac Disease: Deadly and Costly, Requires New Solutions

Over 100M Americans, or almost 42% of the U.S. population, currently has from some form of cardiovascular disease and the prevalence is forecasted to grow to 45% over the next 15 to 20 years.    Cardiac disease is the #1 killer in the U.S.  According to the Centers for Disease Control and Prevention, approximately 610k Americans die from cardiac disease every year, which accounts for about 25% of all U.S. fatalities (from any cause).  

Adverse lifestyle changes such as becoming more sedentary (much of which can be attributed to technological advances) and consuming fattier foods have been implicated as major contributors to the high rates of cardiac disease.  But despite these lifestyle changes and growing prevalence of the disease, the risk of dying from the condition has actually been on the decline since around 1985.  Much of the progress towards reducing its lethality has been attributed to a decline in smoking, increased awareness, and advances in medicine and medical technology. 

Cardiovascular disease also places a massive economic burden on the U.S. economy.  The American Heart Association estimates that among all diseases and conditions, that cardiovascular disease exacts the highest cost on the U.S. economy.  The AHA estimates that the current $555 billion will grow to $1.1 trillion by 2035 and be fueled by aging of the baby boomer generation.

Direct costs, such as those related to medical services (physicians, hospitals, follow-up visits, etc), prescription drugs and home health care account for about 57% of the economic burden of cardiac disease while indirect costs, such as those related to lost productivity at work and at home, account for the other 43%. 
 
The AHA is a significant advocate for improving prevention, diagnosis and treatment of cardiac disease.  In their 2017 report titled, Cardiovascular Disease: A Costly Burden for America – Projecting Through 2035, the AHA makes several recommendations to address the health, lifestyle and economic challenges of the disease.  Among them is a call to support innovative technologies, including telehealth and mobile health platforms, as a way to improve diagnosis, prevention and treatment of the cardiovascular disease.

ECGs Save Lives But Provides Only Stitch-In-Time Data

Electrocardiography measures electrical activity of the heart over a period of time.  By identifying certain changes in the electrical activity, ECGs provide information about the structure, function and health of the heart.  EKGs are usually performed after an individual has been diagnosed with symptoms of heart disease, although they can also be part of a regular health check-up.  

Clinical studies have demonstrated that ECGs can reduce the risk of serious cardiac events and save lives when they are incorporated as part of regular health screenings.  However, unlike Bioflux which continuously records electrical activity and can be worn for up to 30 days as an individual goes about their daily activities, the data collected by traditional ECGs is based on a relatively short window (~5 – 10 minutes) and may be more subject to artificial influence as a result of the clinical setting.  

Bioflux’s ability to provide continuous monitoring and real-time data (in real life settings) allows for expanded utility of traditional ECGs, particularly for heart conditions which may only exhibit intermittent symptoms such as arrhythmias (i.e. abnormal heart beats), including atrial fibrillation, bradycardia and tachycardia.  Bioflux’s real-time data feed and relatively massive information sets allow physicians to make more informed diagnoses and treatment decisions which, for patients at risk of SCD, can prove to be potentially life-saving benefits.   
  
Approximately 4M Americans have some form of heart arrhythmia.  While not all people with heart arrhythmias are at risk of experiencing negative effects, they can lead to serious outcomes including stroke, heart failure and sudden cardiac death (SCD).  According to the National Stroke Association, atrial fibrillation increases the risk of stroke by approximately 500%, although with proper diagnosis and monitoring, the majority of these could likely be prevented.  Unlike myocardial infarction (i.e. heart attack), which is caused by blockage in the coronary arteries, SCD occurs when the heart’s electrical processes malfunction due to irregular heartbeats (i.e. arrhythmia).   An estimated 325,000 Americans die from SCD every year. 
 
Rapid Growth of Medical Device Wearables Markets Should Bode Well For Bioflux

According to industry research firm Markets and Markets, the wearable medical device market is expected to grow at a CAGR of more than 18%, from $6.2B in 2017 to $14.4B in 2022.  Their new report (Jan 2018, Wearable Medical Devices Market by Device – Global Forecast to 2022) cites individuals’ increased focus on fitness and awareness about healthy lifestyles as some of the key growth drivers.  Leveraging advanced technologies and a highly developed healthcare infrastructure, North America is expected to experience the fastest growth.  The authors note that the sports and fitness segment is expected to be particularly robust.

The rapid growth of the consumer segment, driven by the popularity of sports and fitness trackers (e.g. Fitbit), has helped to satisfy individuals’ desires to take a greater role in their own health.  That enthusiasm has similarly benefitted the prescription wearables segment as real-time data from new technologies, such as mobile cardiac telemetry and continuous glucose monitoring, now allow patients (and their physicians) to make more informed and quicker decisions aimed at improving their health. 

Wearables Empower Patients, Which Improves Health Outcomes

The explosion in demand for fitness trackers and other wearable medical devices may be in large part due to the desire for people to have more control over their own health.  Empowering patients by providing them with greater health-related resources and information has shown to be a powerful influence in improving patient outcomes. 
 
A recent study by by Xiaodong Deng, Ph.D., professor of management information systems at Oakland University’s School of Business Administration, showed that patients will take a more active role in their own treatment (which can improve adherence to recommended treatment guidelines) when provided with greater amounts of health-related information which, in turn, can improve health outcomes.  Studies such as this indicate that while wearables’ tangible benefits, such as real-time and continuous data, are of obvious clinical importance, that their ability to facilitate patient empowerment can also be a powerful, albeit less tangible, outcomes-based advantage of these types of devices. 
 
Artificial Intelligence-Powered Wearables

With Bioflux nearing market introduction, Biotricity is looking to expand its product portfolio and recently began broadening the scope of its research and development with the goal of incorporating artificial intelligence-based capabilities and related functionality into its proprietary remote patient monitoring platform.  AI can allow for significantly greater interactivity between patient and device, provide for a much greater level (and speed) of personalized diagnosis and treatment, mitigate (human-error) risk, streamline workflow and potentially reduce costs.  While there is little doubt that AI will eventually improve almost all aspects of healthcare, it lends itself particularly well to certain areas such as patient monitoring where feedback-loop functionality is critical in making treatment and diagnosis-based decisions.
  
While Biotricity has not publicly disclosed specifics regarding the additional functionality and utility that they expect will result from their AI-related development programs, they have recently mentioned that it is focused on “extending the capabilities of its remote patient monitoring platform with artificial intelligence to differentiate itself within the growing remote monitoring marketplace.”  In general, they expect AI will provide greater detection capabilities, improved accuracy and increased efficiency.  A next-generation version of Bioflux is expected to be the first AI-based product.  In mid-January Biotricity announced that they were working with a proof-of-concept version of the next-gen device and that they expected to file for FDA 510(k) clearance by Q3 2018.
    
Preparations Underway For Q1 Launch 

Proceeds from a December 2017 $2.44M equity raise were quickly put to good use as the funds will facilitate the initial domestic roll-out of Bioflux.  In early January Biotricty announced that manufacturing of the first production lots was underway and, with their sales management team already in place, that they began building an initial sales team and identifying pilot sites to support the anticipated Q1 U.S. launch of Bioflux.  Focused on bringing in seasoned reps with significant medical device sales experience, management’s goal is to have 12 reps onboard by the end of Q1.  

Pipeline Will Leverage Proprietary Platform Technology 

Biotricity expects to leverage their proprietary platform technology to develop and commercialize complementary and next-generation products.  In addition to the AI-based (next-gen) Bioflux candidate, which could launch later this year, the company is developing a personal health monitor called Biolife.  Biolife, which is being designed specifically for people at-risk of cardiovascular disease, will help patients optimize management of their condition.  It is anticipated that Biolife will be used to supplement physician’s treatment and lifestyle recommendations. 

While Biotricity has not provided recent updates relative to development status of Biolife or anticipated timelines on when the product could come to market, there may be more pipeline-related activity and announcements following launch of Bioflux.  

Biolife looks like it could be a significant addition to Biotricitys’ product catalog and seamless fit for the sales force given that; it has the potential to expand the company’s targets markets to the broader CVD population, will have the same customer call-points as Bioflux (a true ‘add-to-the-bag’ product for the sales team) and offers physicians an incremental revenue opportunity.  As such, Biolife could provide Biotricity significant revenue upside with potentially only relatively minimal incremental spend.   

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