Investing in Disruptive Technology: The Healthcare Opportunity (USAQ, PLTR, EXAS, MDT, VEEV, CERN)

No industry is safe from the disruptive encroachment of technological advances. None.

And those advances are happening at a faster and faster rate because the major lanes of the highway of technology are merging in complex combinatorial ways.

Advances in machine learning are merging with advances in processing power, and those are together merging with advances in artificial intelligence, and then the whole superstorm of that complex is merging with advances in robotics.

The intersection of all of these accelerating curves is also linking up with cloud computing and edge computing to form an unstoppable force set to reinvent whatever it touches next because it’s a capacity coefficient – whatever you place within reach of this complex of disruptive potential will be redefined by efficiency, which then redefines the frontier of what is possible in an applied sense, opening up new possibilities.

Naturally, the most important industries to place within that reach are the things we all partake in and need. And healthcare is right at the top of that list.

This has enormous implications for investors seeking to align their capital exposure with these trends, as well as a number of stocks that sit at the intersection of technology and healthcare, including EXACT Sciences Corporation (NASDAQ:EXAS), Palantir Technologies Inc (NYSE:PLTR), Veeva Systems Inc (NYSE:VEEV), USA Equities Corp (OTCMKTS:USAQ), Medtronic PLC (NYSE:MDT), and Cerner Corporation (NASDAQ:CERN).

We take a closer look at a few of these names with recent catalysts below.

 

EXACT Sciences Corporation (NASDAQ:EXAS) bills itself as a leading provider of cancer screening and diagnostic tests that relentlessly pursues smarter answers to give people the clarity to take life-changing action, earlier.

Building on the success of Cologuard and Oncotype® tests, Exact Sciences is investing in its product pipeline to support patients throughout their cancer diagnosis and treatment. Exact Sciences unites visionary collaborators to help advance the fight against cancer.

EXACT Sciences Corporation (NASDAQ:EXAS) recently highlighted data from one oral and one poster presentation being featured at the 2021 Digestive Disease Week® (DDW®) virtual annual meeting, taking place May 21-23.

Notably, according to its release, the poster shared data that incorporate real-world patient adherence rates into a colorectal cancer (CRC) microsimulation model. The data showed that Cologuard® (mt-sDNA) was cost effective and provided the greatest reduction in CRC incidence and mortality versus annual fecal immunochemical test (FIT) and annual fecal occult blood test (FOBT) in a representative Medicare population.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe.

EXACT Sciences Corporation (NASDAQ:EXAS) generated sales of $402.1M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -13.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.4B against $628.9M).

 

USA Equities Corp (OTCMKTS:USAQ) is one of the most interesting names on this list because the company is earlier stage, but making up ground quickly with a unique model.

The company engages in the provision of medical device technology and software as a services. It focuses on enabling primary care physicians to increase their revenues by providing them with relevant, value-based tools to evaluate, and treat chronic disease through reimbursable procedures. Its products will enable physicians to diagnose and treat patients with chronic diseases which they historically have referred to specialists.

The company’s near-term objective is to acquire five thousand physicians by 2023, which would generate $17.9 million on the topline. According to its materials, all current and future products and services will be sold through the same distribution channel and customer base allowing it to generate additional revenue without the customer acquisition cost.

USA Equities Corp (OTCMKTS:USAQ) recently announced its first-quarter financial results for the period ended March 31, 2021, reporting strong sequential growth and setting expectations for the second quarter.

“We made excellent progress executing on our financial and strategic priorities in the first quarter of 2021,” stated USAQ Chief Executive Officer Troy Grogan. “On a sequential basis, our revenue more than doubled to approximately $304,000, while gross margin improved 370 basis points to 43.9%. This growth is due to increased sales of allergy diagnostic kits and immunotherapy treatments as well as expansion of our customer base We also saw continued momentum in April, and currently expect an increase in revenue and gross margin in the second quarter of 2021.”

USA Equities Corp (OTCMKTS:USAQ) is projecting entry level monthly subscriptions will be $299/month or $3,588 per year. Its near-term projection is to acquire 5,000 physician clients by the end of 2023 and over 20,000 physicians in the medium to longer term, which is still less than five percent of the total target physician audience in the US today.

According to the Journal of Pharma and Healthcare: “There are over 450,000 primary care physicians, including licensed nurse practitioners, in the United States.” With a range between $3,588 – $10,000 per physician per year, USAQ is targeting an addressable annual market of roughly $1.6 billion. Capturing just 5% of this market would generate revenue of at least $87 million.

 

Veeva Systems Inc (NYSE:VEEV) frames itself as a company that provides cloud-based software for the life sciences industry in North America, Europe, the Asia Pacific, and internationally.

The company offers Veeva Commercial Cloud, a suite of multichannel customer relationship management applications, data solutions, and master data management solutions; and Veeva Vault, a cloud-based enterprise content management applications for managing commercial functions, including medical, sales, and marketing, as well as research and development functions, such as clinical, regulatory, quality, and safety.

Veeva Systems Inc (NYSE:VEEV) most recently announced the availability of 11 new therapeutic areas in the Veeva Link customer intelligence platform. Initially started in oncology, Veeva Link delivers deep, curated expert profiles with real-time insights that help life sciences teams find and engage with global experts across twelve therapeutic areas.

“Veeva Link allows us to transform customer engagement by better connecting with key people, understanding the ecosystem around them, and making every interaction more relevant,” said Gandolf Finke, CEO at Fosanis. “Partnering with Veeva will help us bring our life-changing digital solutions to patients.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe.

Veeva Systems Inc (NYSE:VEEV) pulled in sales of $433.6M in its last reported quarterly financials, representing top line growth of 28.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($2.2B against $709.5M).

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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