Not sure if anyone heard about digital medicine (DM), a new trend which is quickly shaping up that is not only strongly supported by the new wearable technologies but also becomes important for pharma and biotech companies to cope with the increasing challenge of exploding health care costs and budget cut from the governments and insurance companies around the world. Since it is super new, it is obviously premature to clearly define what it is and what it entails. But we are seeing some companies are starting to think about this and have plans to move into this burgeoning field. I bet those companies with such foresight will greatly benefit financially in the future as they will be the leading force and may likely the ones to define the future of this trend. IBM may be one of them, which is taking its Watson artificial-intelligence technology into health care in a big way with industry partners. The initial three industry partners are Apple, Johnson & Johnson and Medtronic. You can see the report in New York Times here. Apple is also a critical player for it. As described, “Apple is increasingly a major supplier of health sensors, from iPhone apps to the Apple Watch. Its recently introduced HealthKit and ResearchKit software make it easier for applications and researchers to harvest health information from millions of owners of Apple products, with their permission. That data can now be plugged into Watson. `We want to be the analytics brains behind HealthKit and ResearchKit,’ Mr. Kelly(from IBM) said.” Both IBM and Apple are very cheap valuation-wise and this is one of the main reasons that I’m very bullish for both companies for long-term.
Another company which is very active and has actively exploring this new field is the top pharma company, Novartis (NVS). Projects and products that Novartis are working on include pills and inhalers with sensors that tell on patients who miss a dose; clinical tests that rely on Microsoft’s Kinect, the motion-sensing technology used with Xboxes, to measure walking speed and balance in people with multiple sclerosis; and Google contact lenses that focus automatically and can deduce diabetics’ blood-sugar levels from their tears. Novartis is not really cheap at the current price around $100 but I’m not sure it will become really cheap again, barring any unexpected big problems, given its very healthy product portfolio, a strong business model focusing on pharma, eye-care and generic, as well as its futuristic foresight in actively pioneering and exploring this new megatrend for digital medicine. If it drops below $95, Novartis will be a great buy for me.
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