If you want to invest in Novo Nordisk, you should look at Lifecare
Most investors – especially Novo Nordisk shareholders – know that diabetes is a global and rapidly growing disease that is a golden opportunity for companies like Novo and their shareholders. About 1/3 of patients with diabetes need to continuously measure their blood glucose, and this is typically done by taking a blood sample from the finger several times a day. But this low-tech technology is rapidly changing to high-tech and continuous glucose monitoring (CGM) – and this is where Lifecare becomes interesting.
From low-tech to high-tech
Lifecare is a medtech company listed on the Oslo Stock Exchange with the ticker LIFEA, which has developed a revolutionary CGM miniature biosensor, Sencell. The sensor, the size of a grain of rice, will be inserted into the wrist and then glucose levels can be read by, for example, a smart watch. It is “inject and forget”, as Lifecare puts it, and a significant advance on blood sampling and other CGM products on the market, which include sensors and monitors stuck to the skin.
After 160-180% price rise – but the main price triggers only coming now
Lifecare has had a bumpy road, where it has had to acquire development partners. It is now in its first clinical trial (in humans), with results expected in September/October this year. This has lifted the share price this year by 170% to the NOK 4.5- 5 level, which is still somewhat below the price peak in the NOK 8.5-9.0 level.
Price development Lifecare AS vs. Kapital Partner’s Healthcare Index over the past year
Publication of the results of the clinical trial within the next 1-2 months and the results of the other studies towards a market launch in 2024 are obvious triggers. The launch should be done through a partner. Sanofi has an option/right of first refusal on Sencell globally in CGM to be executed in conjunction with the results from the first clinical trial.
Revolutionising nanotechnology
Compared to existing CGM products, Lifecare’s Sencell is revolutionary on several and crucial parameters, including:
- Very small sensor under the skin
- Sensor wirelessly transmits directly to smart watch (no receiver on skin)
- The sensor therefore has a very long lifetime – in principle infinite – compared to 1 – 12 weeks for existing products
- The sensor can be used for many other biomarkers than glucose
Lifecare and example of one of the most advanced existing CGM products
A large and growing market
Similar to diabetes and its related product markets, the market for CGM is growing. Sales in 2021 are estimated at over USD 5 billion and are expected to reach USD 13 billion in 2028. Lifecare considers its target market to consist of over 26 million diabetics in high-income countries.
Risks
As with other medtech companies, there is an inherent risk that the product will not work as intended or that development will be delayed, which could cause the share price to fall. However, the risks here are significantly lower than in biotech. In addition, Lifecare will need to raise capital, which could dilute existing shareholders – especially if the capital injection is made before positive results from the clinical trial, expected in September/October 2022.
