Independent financial analyst Matt Badiali profiles a digital therapeutics company that is changing diabetes treatment.
I reread the study twice. The numbers blew me away.
According to the American Diabetes Association, the annual cost of diagnosed diabetes in the U.S. is over $327 billion.
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That’s almost $1,000 per U.S. citizenůevery year.
The average person with diabetes costs 2.3 times more in healthcare costs than someone without diabetes. That’s a staggering number.
That’s why I get excited when I come across a company offering something new and useful in the diabetes space.
Here’s my caveatůI’m a scientist. A geologist by education, but I took enough math and science courses to get my head around statistics. I know good data from bad. And I’ve seen almost as many B.S. claims in the health sector as I have in mining.
So, when I read the claims from this tiny digital health company, I was skeptical.
However, the data is compellingŚboth from studies and from the commitment of its users. DarioHealth Corp. (DRIO:NASDAQ) is a global digital therapeutics company. It is revolutionizing the way we treat diabetes.
The company’s app has over 60,000 users today. These are individuals who bought the product and pay for it themselves (rather than getting it through their employers or insurance).
Dario makes a blood glucose monitoring system that works with your smartphone. The app collects the data and helps users manage their blood glucose. It’s so easy that the company had a massive buy-in when it began to study the actual effectiveness of its methodology.
It’s like Fitbit for diabeticsůand people love it. It has a 4.6-star rating on Google Play Store. And when you read the reviews, you see that the company immediately contacts folks with problems.
From 2017 to 2019, Dario’s clients participated in eight scientific studies presented at three leading diabetes conferences.
Here’s what they foundůAn average reduction of 1.4% in blood glucose (A1c) after one year. That represents a gross savings estimate of about $2,380 per person per year in health care costs.
That’s a huge savings. And while the company sells primarily to individuals today, management believes they will close a deal with a large business or insurance company by the end of 2020.
That’s the catalyst that will propel DarioHealth to its next level. And these digital health stocks move quickly. Take Livongo Health, for example.
Dario’s closest peer, Livongo Health, was a $1.5 billion market cap company in October 2019. On November 2, giant digital health company Teledoc Health (NYSE: TDOC) acquired it for $14.4 billion. That’s an 860% gain in a year.
DarioHealth is still in the growth stage. But this next transition, going from selling its services to individuals to insurers will be a huge turning point in the stock.
This is a great play in the digital health space, but don’t take my word for it. The company will host a conference call on Thursday, November 12, 2020, to review its second quarter results. You can sign up for their call or watch it afterwards.
Matt Badiali is a geologist and independent financial analyst. He spent fifteen years researching and writing about great investments inside the natural resources sectors. He can be reached at www.mattbadiali.net.
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