Few industries will experience as much change over the next ten years as the healthcare industry. By 2030, every baby boomer will be over 65 years old, which is one in five Americans older than retirement age. This massive demographic shift, coupled with advances in genomic medicine and digitization, is likely to change the way we think about medical care. One thing seems certain: the pressure on lower costs, better management of chronic diseases and more personalized care will get a lot of attention.
Teladoc Health (NYSE: TDOC), Inari Medical (NASDAQ: NARI), en Fulgent Genetics (NASDAQ: FLGT) are all at the forefront of these trends. If they can fend off competition, their shares can reward shareholders with the mindset and patience to buy and hold for the next decade.
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1. Teladoc Health
When Teladoc acquired Livongo Health last year, it essentially doubled its size and established a foothold in the growing market for chronic disease management. Diabetic patients, Livongo’s specialty, account for $ 1 out of every $ 4 spent on health care in the United States. With Teladoc’s virtual primary care service, a program currently under scrutiny, the telehealth leader has linked two sides of the patient’s journey that are important for diagnosing and managing the costly illness. In fact, CEO Jason Gorevic said on the latest earnings that more than 25% of the diagnoses of diabetes and pre-diabetes made by the virtual primary care program were first diagnoses. This means that a Teladoc program is discovering new customers for Livongo’s services. Benefits like these make management likely to exceed the $ 500 million revenue synergy promised when the deal was executed.
If the company does get over the telehealth landscape, it will not be without competition. Alphabetbacked up Amwell became known in September and Hims & Hers’ health, which offers prescription and drug delivery for depression, hair loss and erectile dysfunction, became available to the public in January. AmazonThe app-based telehealth offering will reportedly be offered to its US staff and a few other employers later this year.
For now, Teladoc shareholders can rest assured knowing that the telecom health market is expected to grow by 25% per year to nearly $ 600 billion by 2027. In this context, the company aims for approximately $ 2 billion in sales this year and a growth of 80%. This leaves a lot of room for shareholders to win from the early leader in the industry, even as the competition grows.
2. Inari Medies
Inari is focused on the removal of blood clots, specifically deep vein thrombosis (DVT) and pulmonary embolism (PE). The disposable catheter-based devices are easy to learn how to use and offer a safer, cheaper and more effective alternative to traditional coagulant drugs. Management estimates the market opportunity is around $ 3.8 billion and growing rapidly. The company recently reported a full annual result for 2020 and a revenue of $ 140 million, 173% more than 2019. Unlike Teladoc, Inari’s performance was despite the pandemic, which would allow access to hospitals where sales and training would normally take place. , limited. As the constraints rise, Inari is investing in growth.
To scale training, the company introduced Clot Warrior Academy, a live video-based training platform. It continues to expand sales staff and geographic targets. Management believes that the more clinics taught, the more patients will be served who can benefit from the procedures. The number of potential patients is currently estimated at 85% to 90% of PE patients and 60% of DVT patients. The company also emphasizes clinical studies to demonstrate both the efficacy of its procedures and the inadequacy of the drugs commonly used to treat these conditions.
Similar to Edwards Life sciences In heart disease, Inari offers a minimally invasive treatment that costs less, is simpler to perform and delivers better and safer results for patients. Edwards has made a 470% share gain over the past ten years. With a large and growing market and innovative solution, Inari shareholders can end up with similar returns.
3. Follow genetics
Fulgent helps usher in the era of personalized medicine. The company offers more than 19,000 genetic tests, as well as diagnostic activities for active COVID-19 infections, neutralizing antibodies and a combination test for COVID-19 and flu. The company’s genetic testing industry was already booming before the pandemic, rising 52% from 2018 to 2019. After the core business stalled early in the beginning of last year, it rose 43% in the fourth quarter. Management predicts 92% growth in genetic testing by 2021. The market is growing rapidly and is expected to reach $ 21 billion by 2027.
COVID-19 tests dominated in 2020 and the company expects this year to be nothing different. Fulgent performed 230 times more billable tests last year than the previous year, resulting in revenue growth of 3,400%. Sales are expected to increase by 90% this year to $ 295 million. All of these tests create meaningful relationships that will benefit shareholders long after the pandemic has ended.
Apart from the notable contracts with the Department of Homeland Security, the public school system in New York, and JetBlue Airways, Fulgent gets exposure to all-important insurers. It has become a laboratory for some local payers and hopes to soon reach the status of several national insurance companies. These commitments, coupled with the continued presence of COVID-19, promise to strengthen the topline for at least the next year or two. With the company’s ability to translate sales into profits – Fulgent believes it will earn $ 12.50 a share this year – shareholders should be rewarded in the coming decade.
This article represents the opinion of the author, who may not be in agreement with the ‘official’ recommendation position of a Motley Fool premium advisory service. We are furry! Questioning an investment thesis – even one of our own – helps us all to think critically about investments and to make decisions that help us become smarter, happier and richer.