The number one fact in play right now for investors is risk aversion.
According to Bank of America strategists, professional money managers are currently sitting on their highest cash allocation levels ever. According Sentimentrader.com, large investors are currently sitting on their largest put option holdings ever. And according to the CFTC, hedgers are currently sitting on their largest net short index futures position ever.
If you work in the idea that a major global investment bank (Credit Suisse, NYSE:CS) has seen its credit default swaps skyrocket over the past week (a sign of the market’s belief that a firm could fail) and that a tyrannical madman (Putin) has repeatedly threatened nuclear war over the same period, it’s frankly astonishing the market has been moving higher this week.
But, all of that said, investors are competing for a very limited number of obviously good options right now, with healthcare and technology as structurally advantaged sectors looking ahead at the next cycle.
Right at the heart of that equation, we see a number of interesting stocks with models predicated on disrupting the established status quo in the big pharma space. And it’s no wonder. Given the opioid drug epidemic, pain treatment alternatives have seen enormous growth in recent years, with some very interesting and innovative solutions starting to drive the market.
With that in mind, we take a look below at some of the most compelling stories in the space.
Zimmer Biomet Holdings Inc. (NYSE:ZBH) engages in the design, manufacture, and marketing of orthopedic reconstructive products. The firm also offers sports medicine, biologics, extremities, and trauma products, spine, craniomaxillofacial, and thoracic products, office-based technologies, dental implants, and related surgical products. The company operates through its Americas Orthopedics, EMEA, Asia Pacific, and Americas Spine and Global Dental segments.
The Americas Orthopedics segment consists of the U.S. market and includes other North, Central, and South American markets for the firm’s orthopedic product categories. The EMEA segment focuses on Europe and includes the Middle East and African markets for all product categories except Dental. The Asia Pacific segment consists of Japan, China, and Australia and includes other Asian and Pacific markets for all product categories except Dental. The Americas Spine and Global Dental segment focuses on the U.S. market and includes other North, Central, and South American markets for the firm’s spine business, and all geographic markets for its dental business. This segment is also involved in research, development engineering, medical education, and brand management.
Zimmer Biomet Holdings Inc. (NYSE:ZBH) recently announced U.S. Food and Drug Administration (FDA) 510(k) clearance of the Identity™ Shoulder System for anatomic, reverse and revision shoulder replacement. The Identity Shoulder System is a convertible system that uses proprietary technologies to align each surgeon’s approach to an individual patient’s anatomy, with the goal of alleviating pain and optimizing range of motion. The latest addition to Zimmer Biomet’s portfolio of shoulder replacement systems, the Identity Shoulder System is designed to allow surgeons to devise and execute a patient-specific surgical plan with precision.
“The FDA clearance of the Identity Shoulder System is exciting because it offers surgeons a highly adaptable solution for anatomic, reverse and revision procedures to help patients optimize natural shoulder movement,” said Ivan Tornos, Chief Operating Officer at Zimmer Biomet. “This significant milestone adds to progress in our growing Sports Medicine, Extremities and Trauma (S.E.T.) portfolio, a critical area of focus as we expand our position as a global leader in innovative medical technologies that maximize mobility.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. ZBH shares have been moving higher over the past week overall, pushing about 5% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 4% in that time on strong overall action.
Zimmer Biomet Holdings Inc. (NYSE:ZBH) managed to rope in revenues totaling $1.8B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -12.1%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($386.4M against $2.5B, respectively).
Electromedical Technologies Inc. (OTC US:EMED) is flying under the radar as a disruptive force in the pain-free drug-free marketplace. The company’s flagship product, the WellnessPro Plus, uses frequency and electro-modulation to combat pain effectively.
The company’s technology platform has started to ramp up, with management now focused on scaling it worldwide. While EMED is just now starting to scratch the surface of its big-picture sales equation, we are already starting to see strong growth and overall results.
Electromedical Technologies Inc. (OTC US:EMED) just hit the wires this morning with an update that lays out the company’s recent growth and strong prospects.
Electromedical Founder and CEO, Matthew Wolfson, remarked, “Overall we saw around 24% stronger topline performance on a sequential quarterly basis in Q3, with additional orders in the pipeline for Q4. It was our strongest quarter of the year and the second strongest quarter of sales since the pandemic started.”
In terms of key highlights, the company noted that Q3 saw strong overall sales totaling approximately $280,000, beating both Q1 and Q2 2022 sales, it recorded second highest quarterly revenue figure since Q1 2020, closed approximately $900K in financing to expedite development of the new unit, increased distributors and clinics to drive wider market footprint and bolster sales volume, finalized fixed cost investment to secure key components and avoid supply chain bottlenecks, settled negotiations, factory ready for expanded production and negotiated more favorable pricing and terms from suppliers, and participated in exhibiting its flagship product (WellnessPro Plus) at the world’s renowned pain conference in the US (PAINWeek).
The company is riding momentum to close out the year, pointing out that it is continuing to onboard new sales representatives and clinics to expand and expedite Wellness Pro market penetration, its trade shows are paying off in exposure and increased interest, it has achieved new and major product development milestones of Wellness Pro (to be announced in upcoming communication), and its Presale of Wellness Pro units to existing customers of the original legacy unit is expected to start next year in Q2 to expedite cash flow from existing customers.
Electromedical Technologies Inc. (OTC US:EMED) CEO Wolfson noted in conclusion, “Q3 was solid, but we are scaling the business right now, and we know the real meat of the process is still in front of us. The important part is that we have the ability to continue to invest in massively expanding our sales and distribution footprint and maintain our market leading position in proprietary tech and innovation in the drug-free, pain-free marketplace.”
Zynex Inc. (Nasdaq:ZYXI) engages in the design, manufacture, and marketing of medical devices. It sells electrotherapy medical devices used for pain management and rehabilitation.
The company also develops a new blood volume monitor for use in hospitals and surgery centers.
Zynex Inc. (Nasdaq:ZYXI) recently announced it has begun enrollments in a large-scale blood loss detection clinical trial with its second-generation monitoring system, the CM-1600. The multi-site trial, first initiated with ClinCept, LLC., in partnership with LifeSouth Community Blood Center, is designed to determine the specificity and sensitivity of the CM-1600 in detecting minor blood loss during a whole blood donation procedure. Zynex Monitoring Solutions expects to continue gaining evidence for the use and application of the CM-1600 throughout the study.
“Clinical trials are vital not only to optimizing the performance of our device but also to building the critical body of evidence clinicians need to gain trust in our patented Relative Index,” said Thomas Sandgaard, CEO, Chairman and Founder.
Even in light of this news, ZYXI hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 4% in that time on strong overall action.
Zynex Inc. (Nasdaq:ZYXI) has a significant war chest ($26.9M) of cash on the books, which must be weighed relative to about $18.8M in total current liabilities. ZYXI is pulling in trailing 12-month revenues of $143M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 18.5%.
Other key players in the medical and healthcare disruption business include Tivic Health Systems Inc. (Nasdaq:TIVC), Novocure Ltd. (Nasdaq:NVCR), Medtronic PLC (NYSE:MDT), electroCore Inc. (Nasdaq:ECOR), and Intuitive Surgical Inc. (Nasdaq:ISRG).
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