Diabetes is a global pandemic affecting more than 400 million people globally including 30 million people in the U.S.
Some projections indicate there could be over 590M diabetics by 2035.
Even more staggering is the number of pre-diabetics, who are at high risk of developing diabetes in the future, which stands at nearly three times as large, or one in five people globally.
People with diabetes are at a higher risk of premature death, heart attack, stroke, blindness, amputations and nerve damage.
It is therefore little surprise diabetes is one of the biggest health challenges we face.
Any investments made in slowing or reversing this diabetes pandemic could therefore not only substantially reduce increases in future healthcare expenditure levels but also help significantly improve overall long term health care outcomes.
What’s The Investment Opportunity?
Nemaura Medical (Nasdaq: NMRD)
NMRD is a small cap “medical technology company developing sugarBEAT® as a non-invasive, affordable and flexible glucose monitoring system for adjunctive use by persons with diabetes.”
This disruptive “patent-protected technology” has “the potential to greatly expand glucose monitoring to all persons with diabetes, including the 75% of diabetics who do not inject insulin.”
The platform technology sugarBEAT® uses has various clinical and non-clinical applications beyond diabetes.
Some of these relate to hospital intensive care settings (glucose and lactic acid monitoring), and prescription drug dosage level monitoring (a large range of prescription drugs).
SugarBEAT® consists of a daily-disposable adhesive skin-patch connected to a rechargeable transmitter, with an app displaying glucose readings. Each skin-patch requires a 30 to 60 minute warm-up period, after which sugarBEAT® measures glucose at regular five minute intervals over a 24 hour period. SugarBEAT® can additionally be used by insulin using persons with diabetes as an adjunctive glucose monitoring device when calibrated by a finger stick reading.
According to Nemaura Medical, here’s how the technology works:
“Using a small disposable patch which painlessly adheres to a user’s arm, sugarBEAT® measures the body’s glucose levels via the skin.”
“Connected to a rechargeable transmitter, the sugarBEAT® patch can take a sensor measurement every five minutes from the body’s interstitial fluid, drawn from the skin.”
“This glucose data can be securely streamed via Bluetooth to a pre-downloaded app on user’s own smart device, and optionally forwarded onto healthcare professionals.”
“SugarBEAT® is expected to help diabetics achieve better glucose control through a greater understanding of lifestyle factors, thereby helping prevent or delay long term medical complications.”
The Massive Problem Nemaura Is Attempting To Solve…
Currently, most persons with diabetes rely on a A1C blood test to help ascertain glucose levels. The A1C test provides an average of what glucose levels have been over the last 90 days. This test can be further supplemented with a finger stick bloods test, which provides a ‘point in time’ glucose reading.
However, neither of these methods provide real-time ongoing readings of glucose levels, which is what would really help persons with diabetes understand what specific behaviors impact their glucose levels, and thereby empower them with the information needed to modify their lifestyle accordingly.
If individuals do not monitor their sugar levels as close to ‘normal’ as they can, they are much more likely to suffer heart attacks, strokes, eye, kidney, teeth and gum problems, as well as potential nerve damage.
Companies developing ways of Continuous Glucose Monitoring (CGM) can potentially transform health outcomes for persons with diabetes.
Competitors: Other Companies In The Sector
At present, not including NMRD, there are three leading companies in the sector.
– Dexcom (NASDAQ: DXCM)
DexCom, Inc. is dedicated to helping people better manage their diabetes by developing and marketing continuous glucose monitoring (CGM) systems for use by people with diabetes and healthcare providers. The Dexcom G6 uses “a one-touch applicator” that “easily inserts a small sensor just beneath the skin.”
– Abbott (NYSE: ABT)
Abbott is a global healthcare company with a portfolio of leading, science-based offerings in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals. The Freestyle Libre by Abbott is one of the leading products in the continuous glucose monitoring space that “uses a thin, flexible filament inserted just under the skin to measure glucose.”
– Senseonics Holdings, Inc. (NYSE: SENS)
Senseonics Holdings is a medical technology company focused on the development and commercialization of a long-term, implantable continuous glucose monitoring (CGM) system for people with diabetes. Recently the company announced “that the Eversense® CGM System is now available at trained clinics across the U.S. and physicians have begun sensor placements with patients.” The system “provides continuous glucose monitoring for up to 3 months via an implantable sensor“.
Products of both Abbott and Dexcom are forecast to achieve circa $1Bn each in annual sales over 2018, through a combined patient base of approximately 1 million persons with diabetes.
That is about 1% of the total combined diabetic population in US and Europe, meaning there is significant growth potential. Both these products have achieved 20%+ growth rates over each of the last four years, and repeated studies have shown use of CGM improves health outcomes.
There is therefore a growing acceptance amongst doctors of the amount of time spent each day within range of target glucose levels, which would require use of CGM (not A1C or finger stick) to become the new standard for management of diabetes.
However both the Platinum G6 as well as the Freestyle Libre have certain drawbacks that may not be appropriate for all individuals. They are (i) invasive, in that they require a needle-like sensor to be continuously inserted into the skin, (ii) are much more expensive than finger stick / A1C tests, and (iii) are also inflexible in that they are designed to be continuously worn for either 10 or 14 days.
Moreover, Dexcom’s market capitalization has increased more than 242% from 42.62 in September 2017 to its recent all-time high of 145.95. Similarly, Abbott Labs has reached all-time highs in 2018. These companies have already witnessed incredible growth, whereas NMRD, as a small cap with the lowest market capitalization of the four companies may have much more upside opportunity.
Nemaura Medical’s SugarBEAT has Shown Promising Results
Nemaura has already shown its sugarBEAT technology has positive results in its European clinical trial program completed in Q4 2017. The 525 patient day (75 patients x 7 days) clinical study consisted of 80% Type 1 and 20% Type 2 diabetic patients.
Each patient in the study continuously wore sugarBEAT for 14 hours for seven consecutive days. Three out of those seven days were in-clinic, where blood samples were taken at 15-minute intervals over a continuous 12-hour period.
Interim clinical study results indicated sugarBEAT could be successfully used to measure glucose levels by people with diabetes.
According to Nemaura CEO Dr. Faz Chowdhury:
“These results are a significant milestone towards commercialization of sugarBEAT®. We anticipate our miniature wireless device format, which is directly adhered to the body using a non-irritant soft silicone gel, together with our improved sensor performance, will prove to be a formidable tool in helping persons with diabetes globally to better manage their blood sugar levels.
With these positive results, Nemaura has applied for a CE Mark approval Technical File review, and has started to expand into new manufacturing facilities, which would enable large-scale production of its proprietary sensor technology.
The expansion is expected to enable the company to meet the anticipated demand for the planned sugarBEAT initial launch in 2018 in the U.K, followed by Europe, Middle East and Australia, and potentially the U.S., if the company receives U.S. FDA approval.
The Company has previously received CE mark approval for its non invasive technology, in March 2016, using a ‘proof of concept’ wrist watch format. The current CE mark application is for a ‘skin-patch’ based format which is better suited for mass market use.
Consequently, Nemaura could be well poised to take advantage of this large market with its disruptive sugarBEAT technology, potentially greatly accelerating the switchover to CGM for all individuals with diabetes.
Nemaura Could be the Future of Diagnostic Technology
The global critical care diagnostic market was estimated to be over $800M, but is expected to grow to over $1B by 2024.
According to Research and Markets, the glucose monitoring global market is expected to reach more than $11B by 2023.
Now, there’s a $4B market opportunity in the U.S. alone, and $3B in Europe.
The Bottom Line
Nemaura Medical (Nasdaq: NMRD) is changing the way patients and healthcare professionals look to monitor glucose, with SugarBEAT having the potential to be used by all people with diabetes, not just those injecting insulin, given it is non-invasive, affordable and flexible.
SugarBEAT has previously received CE mark approval for its predecessor wrist-watch format device, and applied for CE mark approval for the current ‘skin-patch’ based format, which has shown positive results in a clinical trial and which is due to launch in 2018 in the U.K., with a strong licensee on board.
The company also has promising growth potential beyond the current target market. The platform technology could potentially also be used for other applications beyond glucose such as prescription drug monitoring.
- JPMorgan Chase & Co., “Libre Launch Off to a Fast Start: What It Means for ABT & DXCM,” February 26, 2018 p. 1, available from Nasdaq IR Insight
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