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Initiating Coverage
We initiated coverage of Biotricity (NASDAQ:BTCY) with a $7.50 price target valuation.
Biotricity Inc. is becoming an ecosystem platform for remoting monitoring and cost-effective earlier detection of health issues. Growth catalysts include its expanding network of cardiac physicians, better workflow for nurses, Biocare & Telemed launch (cloud) and the recent FDA clearance of Biotres.
Large addressable markets with strong undercurrent for sales growth from new offerings & further penetration of it doctors network and their patients. Value proposition is compelling for doctors & patients.
Mobile Cardiac Telemetry (MCT) is their primary expertise with FDA-approved Bioflux device and software components. Small portable device for real-time monitoring of a patient's cardiac activity. Biotricity is extending its Cardiac offerings (Biotres, Telemed) and expanding into Chronic Care.
The company has a network of 1,500 cardiac doctors in 25 states in 350 clinics & 500 offices representing 3 million patients. Biotricity focuses on clinics because 80% of cardiologists are in multi-care groups. Cardiologists and Electrophysiologists benefit from Biotricity's technology-as-a-service.
Bioflux is its flagship FDA-approved wearable device for real-time monitoring of electrocardiogram (ECG or EKG) results while patients go about living their lives without being inconvenienced. Diagnostic device for a high-risk patient (conditions, family history, high cholesterol, older age) or ones complaining of palpitations or comorbidities. Doctors prescribe the device to patients.
Bioflux collects data at a monitoring center, which immediately sends communication to a patient's physician in the event of a cardiac distress. Electrophysiologists and physicians evaluate the data. The Cardiologist does diagnoses for prescriptions or a surgery procedure.
The path of a needed procedure is accelerated by weeks or months. Facilitates a more urgent response and better allows changes in prescriptions for heart issues. Better patient outcomes are achieved by using Biotricity's MCT (Mobile Cardiac Telemetry) & 24/7 call center.
Biotres is its new wearable wireless 3-lead patch device for continuous recording of ECG heart data and wider array of arrythmia monitoring. Rechargeable device with wireless connectivity and comfort fit. Potential to displace the incumbent patch Holter. The FDA granted clearance last month.
Shift in the healthcare landscape is moving towards Preventive Care. Biotricity is tapping into this needs-based gap or void to modernize Chronic Care & Disease Management.
Empowering patients for better well-being & longevity. Equipping doctors with anomalies detection.
Cost Savings & Workflow Time Efficiency for Nurses. Instead of expensive hospitals and emergency room bills, pro-active monitoring and early detection of medicine need or surgery allows outpatient cost savings. Remote monitoring allows cost-effective at $11,000/year (NIH/Journal of Cardiovascular Electrophysiology) per patient year.
Reimbursement rates reduction or cut risk from Medicare is minimal exposure for Biotricity and its physicians network. Bioflux and the upcoming Biotres patch launch already fit into the existing billing codes and resilient clinical fee. Biotricity's wheelhouse is more insulated because no reimbursement specialist is needed for billing and reads are insurance reimbursable.
Recurring revenue play and easily deployable tech. Furthermore, there is lower operational expense for the doctors and clinics, along with easy integration into their back offices. Rechargeable devices help keep the margins high and further insulate from reimbursement.
Sales growth of 130% this fiscal year & 160% for the March 2023 year appear possible. Helped by further penetration of clinics and offices, doubling of its salesforce and new launches.
$7.50 per share is our stock price worth target based on the peer group trading at 9.0x EV/Sales 2022 applied to our 2023 Sales for BTCY to incorporate a full year of Biocare Cardiac cloud offering.
Catalysts and Attractive Aspects are more detailed in our initiation report:
1. Niche Disruptor in Underlying Secular Growth Markets of Cardiac & Remote Monitoring
2. Technology Platform & Automated Workflow Advantages
3. Recurring Revenues, Penetration Runway & Profit-Center for Clinics
4. Biocare Cardiac & Chronic & Telemed Monthly Subscriptions
5. Doubling Its Salesforce Count in Calendar 2022
6. Biotres Patch Received FDA Clearance Last Month
7. Operating Leverage for Profitability in Late Calendar 2023
8. Valuation Deserves a Hybrid of Telemedicine + Recurring Revenues + SaaS Business
9. Takeover Candidate in 2023
Valuation
We value Biotricity Inc. using a peer comparables valuation methodology based on EV/Sales multiples of the peer group median applied to our 2023 forecasts. Median better accounts for outliers than average.
We reach $7.50 valuation price per share based on peer group median of 9.0x EV/Sales 2022, but applied to our calendar 2023 Sales forecast for BTCY to capture a full year of Biocare & Biotres.
We appreciate the company's runway and addressable market for additional penetration of its network of clinics and doctors for Bioflux, the Biotres launch contribution and the recurring revenues stream. Our focus is on calendar 2023 sales potential.
Please see the Risks section of our full report.
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