Take a moment and think about what’s around you right now –Â a computer, a magazine perhaps and almost always, your cell phone or mobile device. The world is quickly evolving into a digitally driven one and for investors the opportunities could be presenting themselves in a multitude of ways. But one industry segment that has been fueled by innovation in technology has been the medical industry.
From 3D-printed skin grafts to the latest hand-held medical devices, health care has seen a surge in technological advances, and it is starting to see yet another transformation; mHealth or mobile health care is something that has begun to take hold within the industry via a myriad of applications. It has simplified the way medical professionals and their patients engage with and provide health care information.
With health care costs on the rise and even deteriorating health outcomes due to complications after patients leave a health care facility, there has been a major opportunity carved out in the space and one company has begun leading a charge to take as much market share as possible ahead of this billion-dollar growth. Some 52% of smartphone users gather health-related information on their phones. In fact according to data from GreatCall, the total mobile health market revenue will reach $26 billion not in 10 years but by 2017.
Physicians have become large proponents of this segment as well with 40% believing that mHealth technology can reduce the number of visits to doctors’ offices. It facilitates a new way of interacting and providing health care. Innovation and platform leadership are widely seen as the two most important capabilities in mobile and any platform adopted needs to be applicable or interoperable across the entire health care industry.
Take for instance, Medidata Solutions Inc. (MDSO, Financial). Its cloud-based solutions have helped drive research and development for clinical research for more than 700 pharmaceutical companies worldwide. In fact just recently a French biopharma company, Erytech Pharma (ERYP, Financial), invested in the Medidata Clinical Cloud® platform to include Medidata’s system for data capture during Erytech’s Phase I-II clinical trials.
The mHealth platform has been picked by Erytech to assist the company in simplifying the complexity of data created and turn that into actionable insight in the key targets of the trials themselves. Medidata has also solidified strong relationships with clinical research outlets like the Univeristy of North Carolina-Wilmington. Through the use of the cloud-based technology, UNCW research scholars can be directly introduced to the platform and the company’s overall business model.
This is where many organizations in the mHealth industry are finding stronger opportunities. When it comes to cloud computing in any industry, there are basically two directions a company can take:
- Target a single end user.
- Target enterprise level organizations/companies with multiple end users.
By targeting outlets like research schools and even other biotech companies, the opportunity for companies in the mHealth space increases by targeting the enterprise level.
Similarly, Reliq Health Technologies Inc. (RQHTF, Financial) has also found a similar positive outcome. The company focuses specifically on mHealth and telemedicine solutions for community-based health care. In comparison to a company like Medidata that utilizes mHealth for data analytics, Reliq has a hardware system that actually turns a patient’s home into a “virtual hospital ward” via a voice technology hub, proximity sensors and wearable biometric monitoring devices.
However, like Medidata, Reliq targets large accounts, actual health care systems and is on pace to reach profitability by 2017. These accounts include Sacred Heart Health System (part of the largest not-for-profit health system in the U.S., Ascension Health), National Health Service in the U.K. and pilot programs set to begin in 2017 with Hamilton Health Science and McMaster University. The company was also recently awarded a $1.22 million contract with NexGen Partners to provide a white label version of its platform to the 1.4 million residents of San Antonio.
Realistically, with only 12 accounts and a consumer product launch anticipated for 2017’s benchmark, Reliq, though small by market cap size, is already looking at profitability following its pilot programs. According to its presentations, the company is expecting rapid growth to propel the current program to help it reach 24 accounts by 2018, 48 by 2019, increase the global footprint via outlets like NHS-UK and expand margins to over 85% through 2020.
But mHealth isn’t just about dealing with clinical research companies or health care facilities either. Take for instance the growing trend in overall daily health. The wearables market has actually been training us in the ways of “mHealth” since the first pedometer hit store shelves and today it has evolved into things like FitBit (FIT, Financial).
Not only hasFitBit’s brand been growing in the wearables arena, but it has also been widely expanding in the mHealth sector as well. Many are also identifying mHealth as a potential driver for growth “for the foreseeable future” as one commentator put it. Preventative health care is becoming even more popular as health care costs rise and our connected devices are quickly “plugging into” the mHealth ecosystem. In fact, on the newest iOS version, there is a way to use your Apple (AAPL, Financial) iPhone to track many facets of your waking and even sleeping life. Who knew that a computer manufacturer could be on the cutting edge of medical technology?
And things like the PHIT Act can only add to the awareness that could and quite possibly will become the future for mHealth. If this is your first time hearing about this proposed act, it basically could allow Americans to use pretax medical accounts to pay for physical activity expenses; obviously tracking these activities, updating data and all things related will be critical pieces to this.
Based on these trends, don’t be shocked to see growing exposure by other large-scale tech firms either.
Apple is only one of a handful of other tech giants looking to learn and grow in this emerging space. Consider that companies like AT&T (T, Financial) are Cisco Systems (CSCO, Financial) are targeting mHealth as large opportunities for gaining early market share. Other more sports related companies like Nike (NKE, Financial) or even GPS companies like Garmin (GRMN, Financial) through its newest line of wearbles, to be targeting this mHealth segment. All in all, the industry is far from limited to just health care, yet the companies that are first to the space may be able to uphold a much stronger advantage before larger companies begin to fully immerse themselves in the space.
Disclosure:Â The author owns no shares in any stock mentioned.
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