WINDSOR, ON / ACCESSWIRE / March 21, 2016 / The Wealthy Biotech Trader (or “WBT”), is an investment newsletter focused on presenting everyday investors new opportunities in rapidly growing, little-known, biotech, pharma and medical device stocks, which are making news and subsequent market moves. WBT would like to shed some light on the bubble among the big pharma companies and draw attention to smaller, yet highly innovative companies making their presence felt in the medical device sector. We will focus on our highlighted company, Endonovo Therapeutics, Inc. (ENDV), which we will compare to and contrast to a few others in the space.
Over the past four years, both small and big pharma companies have invested billions of dollars into R&D, with little to show in terms of a viable drug. Despite the lack of results, speculations have boosted shares and this segment is said to be in a bubble. On the other hand, medical device companies have emerged as a group with significant potential.
Developing Devices Based on NASA Technology
Endonovo Therapeutics, Inc. (ENDV) is an innovative biotechnology company developing bioelectronic devices and therapies for regenerative medicine. These devices are based on the Time-Varying Electromagnetic Field (TVEMF) technology originally developed at NASA.
Endonovo’s bioelectronics technology uses electromagnetic pulses to deliver electrical stimulation to the nervous system and cells.
Immunotronics™ platform: This is a non-invasive, non-implantable bioelectronic device for preventing and treating vital organ failure through the reduction of inflammation and cell death, and the promotion of regeneration. Endonovo’s technology was previously identified in pre-clinical studies to be an innovative approach for treating acute inflammation.
Endonovo’s bioelectronic device uses a different approach than others in the field; it is a non-implantable device that uses a pulsed electromagnetic field to deliver electrical stimulation, rather than implantable electrodes.
The company is targeting inflammatory conditions in vital organs and has set its initial concentration on treating inflammation in the liver. If Endonovo can treat inflammation in vital organs then its technology would truly be a game changer as inflammation is regarded as the root of all disease.
Why Medical Device Companies Are Becoming Even More Interesting Versus Drugs
The great news is that Medical Device Companies have just become even more interesting. Traditionally, investors have viewed medical device companies as largely non-innovative “me too” technologies aspiring to create a better mouse trap, so to speak. As such, it’s not surprising 90 percent of yearly FDA reviewed devices are via the 510(k) process, which requires a company demonstrate their device is substantially equivalent to another legally (predicate) marketed device. Essentially, the Company must show it does not have an innovative technology in order to use this regulatory pathway.
However, as technology continues to accelerate, a new batch of truly innovative medical devices are beginning to emerge. One particular field that is attracting a tremendous amount of attention from investors and big pharma, such as GlaxoSmithKline is bio-electronic medicine, which seeks to treat diseases using electrical pulses.
These innovative technologies have also attracted the help of the Defense Advanced Research Projects Agency (DARPA) and the National Institutes of Health (NIH), who have committed $240 million over six years to encourage researchers to collaborate on these technologies.
At the core of bio-electronic medicine are electrical signals utilized by the nervous system and cells to communicate information. In short, these innovative medical devices use electrical signals to produce a biological effect in the body to treat diseases.
Bio-electronic technologies can be used to record, stimulate and block neural signaling. These technologies hold the potential to change the way diseases, injuries and conditions such as rheumatoid arthritis, Crohn’s disease, diabetes, solid organ failure and even cancer are treated.
These devices, if successful, hold the potential to replace billions of dollars of drugs with less expensive and potentially safer devices.
Where to Invest?
While the prospects may be bright, investment needs to be discerning. According to experts, it may be more prudent to look for a company that is investing in innovation and is focused on a new technology. The reason being that less differentiated products would face stiff competition, while more innovative devices have typically offered a better performance, not only shifting market share but also allowing these companies to command a premium for their products and earn better margins.
A Few Other Companies Making Headway in the Medical Device & Healthcare Space
TrovaGene, Inc. (TROV) is a molecular diagnostic company developing technology for the detection and monitoring of cell-free DNA in urine. The company’s precision cancer monitoring platform aims to provide critical clinical information beyond the current standard of care. Hedge fund First Eagle Investment Management LLC recently acquired a new stake in TrovaGene, valued at approximately $2,031,000.
Progressive Care, Inc. (RXMD), through its subsidiary PharmCo, LLC, provides prescription pharmaceuticals specializing in health practice risk management, compounded medications, the sale of anti-retroviral medications and related medication therapy management, and the supply of prescription medications to long term care facilities. The company reported more than $1.1 million in revenues in February 2016, representing an increase of 18% over the performance in February 2015. PharmCo has delivered a strong performance over January and February this year, despite the first 2 months of the year being the “deductible season,” during which most deductibles are in effect before insurance benefits are paid to providers.
Cardiovascular Systems Inc. (CSII) is a medical device company focused on developing and commercializing treatments for vascular and coronary disease. The company’s Orbital Atherectomy Systems treat calcified and fibrotic plaque in arterial vessels throughout the leg and heart, and address many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives. The company reported $41.40 million in revenue for the latest quarter. On February 23, major shareholder Camber Capital Management LLC acquired a new stake in Cardiovascular Systems for a total consideration of $1,887,500.
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