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2020-06-25

Analys Brighter: Telemedicine – an Obvious Choice for Diabetics

Detta är en betald analys på uppdrag av Brighter utförd av Analysguiden
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A Growing Number of Diabetics Provide Great Market Potential

Diabetes is the world's fastest growing chronic disease affecting 425 million people in the world (one in 11 adults), which is expected to increase to 629 million in 2045 (one in 10 adults). Many children also suffer from diabetes. This creates a great need for new services and tools that facilitate and streamline diabetes care. Brighter has created Actiste to give diabetic patients a better way to manage their diabetes, thereby reducing the burden on the healthcare systems. By combining blood glucose meters, lancets and insulin pens into one device connected to a cloud service with mobile data, Actiste simplifies the daily routine. At the same time, it is easy to share data with relatives and caregivers. In the United States alone, there are 31.4 million diabetics, and 500,000 new patients are diagnosed with diabetes each year.

Benefits of Actiste

Brighter's product Actiste received EU approval in 2019. Actiste is part of a platform that, together with the company's cloud solution, the Benefit Loop, can expand to other therapy areas in the future. For example, patients with high blood pressure or other chronic diseases where medication is injected. The most important advantages for the users are the unique technical integration in a device, the ability to follow injection data, automatic logging of vital data, secure communication, and follow-up and tracking of consumables that need to be ordered.

Valuation Upside When Compared to Peers

The fact that the market for this type of service is large will of course create competition. The success of American Livongo (Nasdaq: LGVO, USD 60.91) confirms the business model for this type of subscription service. Livongo grew its subscriber base by 100% in Q1 2020, compared to the same period last year and now has 328,000 subscribers. Their service is priced at a similar level and since the market value of this company is now about USD 6.5 billion, it indicates significant upside potential for Brighter's share price given a successful launch of Actiste.

The Diabetes Market

Diabetes is a chronic disease that occurs when the pancreas can no longer produce insulin, or when the body cannot absorb the insulin it produces. Insulin is a hormone produced in the pancreas, which enables glucose from the food we eat pass through the bloodstream to the cells of the body to produce energy. All carbohydrates in the food break down into glucose in the blood, and insulin helps glucose enter the cells. Failure to produce insulin or use it effectively leads to elevated blood sugar levels. Over time, this is linked to damage to organs and tissue in the body.

In 2016, WHO estimated that there were 422 million adult diabetics in the world, and that this is expected to grow to 642 million in 2040. Globally, the International Diabetes Federation estimates that just over 150 million diabetic patients are treated with insulin injections, and initially, Brighter targets these 40% of diabetics treated with insulin. This also includes type 1 diabetics, those diabetics who cannot produce their own insulin, which is, however, a very small part of the total number. Today, there are sophisticated insulin pumps that are often used in the treatment of type 1 diabetes. In the US, about 13% of all type 1 diabetics have insulin pumps1 and the corresponding figure in Sweden is 14%. Thus, it is mainly type 2 diabetics who are treated with insulin that constitute Brighter's initial target market.

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