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Nemaura Medical (NMRD) Stock Soars On SugarBEAT Trial Data

|About: Nemaura Medical, Inc. (NMRD), Includes: ATTD
Summary

shares of NMRD soared by more than 30% on positive trial data for sugarBEAT.

Preparing for launch in Q4, sugarBEAT may offer a best in market solution for CGM.

stock has room to run in a multi billion dollar market.

Shares of Nemaura Medical Inc. (OTC:NMRD), a medical technology company developing sugarBEAT® as a non-invasive affordable and flexible Continuous Glucose Monitor (CGM) for use by persons with diabetes and pre-diabetics, surged on Wednesday after the company released interim analysis of the first of a number of planned studies in support of a submission to the U.S Food & Drug Administration ("FDA") for approval of its sugarBEAT® product. Shares traded as high as $3.98 each before zigzagging throughout the last part of the trading day to close up roughly 30% on the day. Volume was extremely high, eclipsing more than four million shares on the day, far higher than the 35K average daily trading levels.

Investors were delighted by the details in a company release that provided interim results from a trial population of 25 patients, whom were divided approximately equally between Type I and Type II diabetics. Nemaura conducted the study in a clinical setting and protocol called for taking blood samples via a catheter every 15 minutes over a 12 hour period for 3 non-consecutive days, for a total of 75 patient days. Blood samples were measured using an Architect c8000 Laboratory Instrument.

SugarBEAT Posts Strong Results

In the study, 9,371 data points were analyzed in total, consisting of 4,630 and 4,741 paired data points evaluated using 1-point and 2-point calibration respectively. NMRD utilized the MARD (Mean Absolute Relative Deviation, @ 30%/30mg/dL) for the 1-point calibration was 12.19% (80% of all data), and for the 2-point calibration the MARD was 10.65% (88% of all data)). The results are in line with the company's expectations and compare favorably with competitor products.

As noted by NMRD, sugarBEAT® is expected to launch in the UK in Q4 of this year, with expectations for the device to be marketed to all categories of diabetics, including Type 1, Type 2 and pre-diabetics. The news yesterday provides investors with additional confidence that SugarBEAT is finding investor enthusiasm in an active market where it can seize upon opportunities. The current Continuous Glucose Monitoring (CGM) is estimated to have a global total addressable market worth $82Bn. In the U.S., where the most significant number of CGM users reside and where an estimated five million insulin users monitor glucose levels on a daily basis, the market will be substantial. The addressable market is even more significant with an estimated 24.6 million people diagnosed with type 2 diabetes.

Prior Trial Data Further Supports SugarBEAT Success

In a prior data release, also positive, Nemaura reported data from the home-use portion of the same study, whereby 121 matched pair points between the Blood Glucose Meter and sugarBEAT® were evaluated. In that stage of the trial, data indicated that 84.3% of the data points had an overall MARD of 10.63%, and an overall nominal MARD of 16.3% (compared with 14.8%, 16.3% and 18% for Eversense, Dexcom G5, and Abbott Libre Pro respectively).

Nemaura Medical expects to complete the U.S. study in early 2019, with an expected FDA submission for device approval. Also planned in February, NMRD will be releasing additional poster presentations at the Advanced Technologies & Treatment for Diabetes (OTC:ATTD) conference in Berlin in February 2019 for the full in-clinic portion, which is designed to record approximately 16,000 matched data points.
However, the news yesterday only adds fuel to the fire of momentum at Nemaura Medical.

Nemaura Medical's SugarBEAT, Planning To Launch

SugarBEAT is a device that is going to allow diabetic patients that are required to monitor blood glucose levels multiple times per day the opportunity to use a novel device that is accurate, flexible and non-invasive. Seizing market opportunity, Nemaura Medical (NasdaqCM: NMRD), a biomedical company that is bringing disruption to the market by introducing a device that will allow both diabetic and pre-diabetic persons the ability to monitor glucose levels throughout the day in a repetitive, non-invasive manner, is planning its launch of SugarBEAT in Q4 of this year. Good news for the patient is that the device will not interfere with the patient's lifestyle or daily routine.

Exploiting what NMRD identifies as a niche opportunity, Nemaura Medical is focused on penetrating a multi-billion dollar market and has plans to take advantage of its disruptive BEAT® technology, inclusive of its sugarBEAT® glucose monitoring device, to generate near-term revenue streams. The product will launch in the UK market during Q4 of this year and expand to the US markets following its FDA submission later in 2019.

Nemaura's BEAT® Technology Targets Billion Dollar Opportunity

Nemaura's (OTC:NMRD) BEAT® technology is set to lead a path toward the demand for painless, needle-free glucose monitoring to a Continuous Glucose Monitoring (CGM) market estimated to become a four-billion-dollar opportunity by the year 2024. Moreover, that market is expected to increase an estimated 22.9% over the next six years which adds to the value proposition getting developed by NMRD.

As Nemaura states it, incorporating "better diagnostics for better life," NMRD is developing its BEAT® technology platform to foster consistent and materially useful information about an individual's health and well-being in a flexible needle-free and patient-friendly manner. That information is analyzed and provided back to the patient to provide tailored feedback on glucose, lactate, and other vital body performance metrics.

Nemaura's technology breaks away from traditional finger-stick monitoring methods by incorporating a convenient, needle-free, and painless monitoring patch that is applied directly to the skin of a users' body. The flexible patch design is unobtrusive and houses technology that facilitates the flow of data to both patients and healthcare professionals through a proprietary smartphone application that monitors specific conditions such as daily glucose trends and fluctuations. In turn, the BEAT® technology can empower patients and users by providing useful information to generate proper treatment and management of chronic illness and other conditions usually needing medical supervision. Moreover, because of its ease and flexibility of use, the BEAT® technology platform not only provides the user with meaningful and relevant real-time data, but it is also designed to provide substantial cost savings to each patient while at the same time serving up data that can reduce future health complications.

A future benefit to NMRD will stem from the company's plans to expand its BEAT® technology into other lucrative medical treatment applications such as lactate monitoring. Until then, however, NMRD's primary focus is to penetrate the diabetes market, which is a growing concern for healthcare providers on a global scale as the costs to treat the disease continuing to skyrocket. Filling a niche, for patients, insurers and health care providers, sugarBEAT® may be received as a timely and cost-effective solution to a global crisis. Beyond addressing global concerns on several levels, sugarBEAT® may also usher in a disruptive change to an industry needing better disease management tools.

SugarBEAT® Is A Different Kind Of CGM Device

The device is expected to launch in the UK by years end, with Nemaura Medical's sugarBEAT® getting positioned as a non-invasive, affordable and flexible glucose trending device designed that is intended to allow all persons with diabetes and pre-diabetic conditions to manage their glucose levels better. The potential addressable market is substantial with global estimates reaching a patient market of more than 420 million diabetics. Importantly, and of potentially high value to NMRD is that beyond the large known market for necessary diabetic treatment, the number of pre-diabetic cases is also growing significantly and is already estimated to include more than 1.2 billion additional patients that will require the need for continuous glucose trending. That places the combined market opportunity for Nemaura Medical's, sugarBEAT®, at significant levels and offers NMRD the ability to pounce on a robust market to generate revenue-producing momentum by offering patients a better monitoring solution.

Although the sugarBEAT® device may be a relatively simple approach to glucose monitoring from a patient's perspective, the technology is cutting edge. The patient-friendly device works through the use of a daily disposable adhesive skin-patch that is connected to a rechargeable transmitter. That transmitter is then synced to a smartphone application that displays the user glucose readings every five minutes for a period of up to 24-hours. The results from the transmitter and app provide a patient-specific solution that is designed to help both diabetic and pre-diabetic patients track how specific lifestyle factors can impact daily glucose level trends.

Not only can the patch provide specific glucose readings, but it also allows patients the ability to understand their Ambulatory Glucose Profile (AGP) through sugarBEAT®'s continuous 5-minute readings and implement lifestyle changes that can significantly and consistently improve their time spent in optimum glucose ranges. That additional information, provided directly by sugarBEAT® can, therefore, help delay or even prevent long-term health issues and functional damage caused by diabetes.

Although the device appears simplistic and sometimes gets compared to competitive CGM devices, the sugarBEAT ® technology is housed within a foundation of a unique and proprietary platform.

SugarBEAT® is Like Nothing Else On The Market

While both Dexcom and Abbott Libre have CGM products currently in the market targeting insulin users, neither hit the benchmark that Nemaura is setting. To illustrate, of the 25% of diabetic patients who inject insulin, a large portion of them are not adopting CGM and instead sticking to traditional finger stick technology because the current CGM are invasive, expensive and inflexible. But, not SugarBEAT, and therein lay a considerable advantage.

Moreover, while both Dexcom and Abbott Libre have blazed a path toward broader acceptance and strong patient adoption of CGM technology amongst insulin users, they have practically zero penetration in the much larger non-insulin using diabetic and pre-diabetic markets. Thus, the real benefit, which enures to the benefit of NMRD, comes from the fact that they have disrupted the market enough to allow for additional competitors, like Nemaura, that can better fill the voids initially opened by both Dexcom and Abbott.

What Dexcom and Abbott have been instrumental in starting, Nemaura and sugarBEAT can continue in two specific ways. Firstly, with expanding CGM adoption in the insulin using market, and given sugarBEAT can work as an adjunctive CGM by having the inherent capability to calibrate a patient's glucose profile through a finger-stick reading, sugarBEAT serves a dual purpose. Thus, when patients factor in the advantages of sugarBEAT over existing options, the choice becomes clear in sugarBEATs favor as a non-invasive, inexpensive, and flexible alternative compared to other marketed CGM products.

More sugarBEAT® Advantages Emerge

Secondly, Nemaura can grow market share strategically by exploiting the significant unmet medical need amongst non-insulin users given the typical CGM is predominantly targeting insulin users, and willingly ignoring non-insulin users who do not finger-stick for glucose readings. By targeting persons with diabetes who do not use insulin, alongside pre-diabetics, a substantial untapped market is waiting to be served by a product and device that is non-invasive, easy to use, and priced less expensively than most disease management alternatives. Thus, by taking the sum of the parts, sugarBEAT fills that need.

To better understand the market potential, figure in that non-insulin using diabetics account for roughly 75% of the diabetes market, and as noted, pre-diabetic patients' number almost three times that number. This broader market historically relies on HbA1c readings to manage their condition, typically with a blood test that is taken once every three months, and which gives a 90 day average of glucose levels. Thus, a patient's average glucose level is born. And, if the HbA1c system sounds imprecise, that's because it may very well miss the mark in providing patients with a reliable daily glucose trending level.

At its core, a three-monthly HbA1c test does not show the highs and lows of glucose level changes and only provides an average. It, therefore, fails the course for precise disease management by not tracking daily glucose intervals in a consistent fashion, which can provide far more profound insights into a patients response to glucose intake and insulin. Remember, sugarBEAT® delivers readings every five minutes that tracks glucose levels for up to a 24-hour period, making it unique compared to Dexcom and Abbott as a glucose monitor that can provide useful real-time data on a consistent basis while being non-invasive

.For those persons with diabetes and pre-diabetics who do not use insulin, by using sugarBEAT without the need to calibrate with a finger stick, they can achieve an Ambulatory Glucose Profile (an overview of multiple day glucose trends in a single graph). This AGP would be a more meaningful metric by which to better manage glucose levels, by showing more clearly the link between lifestyle factors such as diet and exercise and sleep and glucose changes, as compared to an HbA1c test. This makes sugarBEAT®'s market opportunity enormous since a three-monthly HbA1c blood test cannot adequately be described as a competitor at all compared to AGP.

Understanding what sugarBEAT® can do for disease management is crucial to patients adopting the device, but how it works to generate its unique patient data set is equally impressive.

SugarBEAT®'s Power Is In The Technology

The technology of how the device works sounds relatively simple, but the amount of time and study that went into bringing the device to market is nothing short of arduous. SugarBEAT® works by passing a mild, non-perceptible electric current across the user's skin that painlessly draws a minimal amount of glucose molecules out of the interstitial fluid that sits naturally below the top layer of the skin. Those molecules are then sent to a small chamber within the sugarBEAT® patch. From there, the technology takes center stage.

Using the sample from the sugarBEAT® patch chamber, the rechargeable transmitter then measures the current glucose levels present in the sample molecule and securely transmits the patient-specific data every five minutes through Bluetooth technology to a smartphone or device app downloaded by the user. Taking it a step further, sugarBEAT®'s proprietary algorithm then converts the data into specific glucose values that provide the user with timely data to show how lifestyle, exercise, mood, and medications, when added to the user profile, can affect their glucose levels.

As mentioned earlier, an additional value-adding feature for sugarBEAT® that can further monetize the device is that insulin-using patients can also use the tool as an adjunctive glucose monitoring device that can be calibrated using finger-stick readings. Thus, sugarBEAT® can provide an alternative non-invasive, affordable and flexible solution to existing CGM competitor products for the 25% of persons with diabetes who use insulin, as well as provide for the first time, a glucose trending product to the 75% of diabetics and pre-diabetics that do not use insulin. Nemaura's product may ultimately allow a much higher number of patients the opportunity to access breakthrough technology for their condition.

Getting sugarBEAT® To Market In 2018

Nemaura Medical is planning to launch sugarBEAT® in the UK market in the last quarter of 2018, with subsequent launches planned throughout additional European countries later in 2018 and into 2019. The planned launch comes after a 525 patient -day European clinical trial completed in Q4 of 2017. To gain access to the US market, Nemaura is expected to complete its 525 patient-day trial (75 patients x 7 days) during the first quarter of 2019 and submit those results to the FDA for subsequent approval under the medical device approval process. Nemaura has been awarded exclusive licensing rights to market sugarBEAT® in both the United Kingdom and Ireland through an agreement with Dallas Burston Ethitronix Limited. Importantly, and as a potential gauge for the likelihood of market success, DBE is a proven marketer of breakthrough medical products and has generated more than $200 million in prior medical product sales into European markets.

The appeal to both the market and to patients is expected to be substantial. With a daily use price comparable to the cost of traditional glucose monitoring strips, sugarBEAT®'s 24-hour patch advantage distinguishes itself from competitors by allowing for greater flexibility. For instance, users can utilize the benefits of sugarBEAT®'s technology on non-consecutive days, a welcomed benefit over competing products that are designed for continuous wear for between 10-14 days.

In addition to the flexibility of use, sugarBEAT® sits positioned as one of the only known non-invasive, painless and needle-free glucose trending devices on the market, an advantage that can drive adoption of sugarBEAT® quickly and produce a recurring revenue stream for Nemaura. And, it is positioned as the only device that can provide accurate readings in 5-minute intervals for a period of up to 24-hours, intended to allow users to recognize lifestyle behaviors that influence daily glucose levels.

Once in the market, Nemaura believes that they can substantially grow the CGM markets which typically targets insulin-using patients, where Dexcom is projected by the end of 2018 to have sales of roughly $950M across 300,000 device users and Abbott Libre sales of approximately $500M in second quarter alone with its 950,000 users estimated by the end of 2018. The market growth is projected to continue at 25% in 2019 and beyond. Taking into account that there are 400M persons with diabetes globally, of which as estimated 25% or 100M require insulin, the opportunity for market growth of CGM is tremendous.

With that said, not only is Nemaura capable of winning a substantial market share of the fast-growing CGM market, sugarBEAT® can also bring glucose trending to the 300M non-insulin using persons with diabetes and to the more than one billion, grossly underserved pre-diabetic market. And for investors, that is where a substantial portion of the value opportunity lies.

Nemaura Medical Is Taking Advantage Of A Real-Time Need

Taking a page from other successful emerging biomedical companies, Nemaura Medical is seizing the opportunity given from a real-time medical need. And, by serving the pre-diabetic market, NMRD is also capturing a massive global opportunity in the process.

By providing vital data throughout the day without the need to adjust lifestyle or diet, sugarBEAT® allows patients an opportunity to benefit tremendously from its unique and proprietary platform that is intended to transform the landscape of how patients receive and utilize data. Right, other devices and monitors provide a snapshot of a given moment; however, they can't offer the continuous flow of information that sugarBEAT® can provide. And, at the end of the day, having that data is an essential aspect of actually understanding how to live with diabetes in a manner that can help to minimize the fluctuations of abnormal glucose levels.
Seizing The sugarBEAT® Opportunity

For Nemaura Medical, the opportunity is not only marketable but is a practical solution to glucose trending for a current market of more than one billion people. Understanding the lucrative potential for not only sugarBEAT® but for the entire BEAT® platform, NMRD appears to be significantly undervalued at current share price levels and has significant opportunity to grow into a much higher valuation. Even after the rise in market cap on Wednesday, NMRD still deserves a much higher valuation. Now, with two stages of its clinical trial complete and filled with positive data, the near completion of the study should bring approval from the FDA in early to mid-2019. But, by then, SugarBEAT will be penetrating the UK markets and building its reputation as a better way to manage diabetes.

As good news continues to make its way to the market, investors should pay close attention to Nemaura Medical as it continues to develop innovative opportunities that may quickly seize a significant portion of the global glucose and lactate monitoring markets. As an investor that looks for emerging opportunities that target unmet or underserved medical needs, Nemaura Medical checks off the boxes as a candidate for considerable investment attention and consideration. As investors witnessed on Wednesday, it only takes one headline to send the stock soaring, and based on guidance from the company, investors should expect some more good news soon.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.