In a few years we will all go to the doctor through our iPad. This was one of the most repeated claims in 2020, when the covid pandemic triggered the ‘telemedicine’ business. In the heat of the restrictions and with the fear of infection in hospitals, thousands of companies were born in charge of supplying technological resources for medical centers. Those that already existed lived an unprecedented stock market explosion. Even Amazon and Apple probed an eventual entry into this market.
In that environment, many analysts and experts spoke that the covid had been only the first step of a paradigm shift and it would be normal from now on to turn to your GP for ‘zoom’. Consultants such as those of Markets & Markets spoke that in just 3 and a half years the telemedicine sector would go from generating $ 38 billion to $ 150 billion. From Global X they speak of 300,000 million by 2028. That euphoria has encountered its first major stumbling block: just a year later the sector not only does not grow on the stock market, but some of its main firms are experiencing setbacks of more than 30% and 60%.
The advance of vaccination and the remission of the covid are causing the population to return to hospitals normally, lowering the demand for these services. On the other hand, the supply crisis and, particularly, the semiconductor crisis, are hitting development hard of these companies. Many of these companies perform hospital transformation services in virtual care environments, installing displays and hardware from companies like Intel. Now with the damaged logistics system they have trouble putting this business into practice.
Pre-covid levels
Teleadoc Health, the leading virtual healthcare company, is listed on the Nasdaq with a value of more than $ 22 billion. This means that 30% is already left in so far in 2021 and since February it has lost more than 53% of its value. Currently, it is less than 11% of its pre-pandemic contribution levels, when this company reached increases of 250%, boosted by the crisis.
American Well, a Boston-based firm also specializing in online healthcare and trading over $ 2 billion, has lost about 65% of its value this year. The company, which jumped onto the market in September 2020, experienced a very strong and sustained decline in February of this year until today. It reached its highs in February and has since lost 75%.
The sector index marks drops of 20% since February
The Global X Telemedicine and Digital Health ETF, Mirae Asset’s exchange-traded fund specialized in telemedicine securities, has seen a decline of 6.5% this 2020 and 20% since February. It should be noted that this ETF has 40 companies selected as the most notable in the area of healthcare digitization. 86% of these companies are of American origin.
Other apps like Doctor on Demand, IClinic o MDlive they were preparing their IPOs to take advantage of the pull of a booming sector. However, it seems that interest is paralyzing seeing how the market is punishing companies that, until not so long ago, were the main protagonists and a great option for the future. At the moment there are no dates on his jump to the park when in the middle of the pandemic they openly spoke of 2021 as the ideal period to do so.
Spanish women entrust to Latin America
This phenomenon of new companies dedicated to telemedicine has had its maximum expression in the United States, but in Spain there has also been a strong investment interest and dozens of projects have appeared. Atrys Health, for example, it doubled its price in 2020 to 600 million euros in a year in which it expanded its telemedicine services, one of its three areas of activity.
Unlike the North American companies, this firm does get a hike in 2021, specifically 6%. However, Atrys does not dedicate its activity entirely to telemedicine, but also has laboratory services. He specializes in advanced diagnosis and prognosis in solid and hematological tumors. In addition, it also offers radiotherapy services. This diversification would have differentiated it from the general trend of the sector. But, in addition, he has opted for a different strategy for his telemedicine.
Latin America presents opportunities due to its lower vaccination and its high population density
With the pandemic and the disease subsiding in Europe, the Spanish company has launched itself into the Latin American market. Your president, Santiago Angel Torres, He has traveled to Colombia this week to meet with his entire team and plan the expansion of the firm in the region. Among other movements, strategic purchases such as ITMS in Colombia (a leading company in this field) or Axismed in Brazil stand out.
The South American region has a vaccination rate (39%) lower than that of Europe, than in countries such as Spain touches 80% and the containment of the disease is being more complicated than in other continents. For this reason, it is expected that telemedicine services will have an even greater presence there and, in addition, it is a commitment to the future due to its high population but with a lower degree of competition.
However, it is not the only Spanish firm to make this decision. Top Doctors, Founded in 2013, this week it carried out a capital increase of 11 million euros to boost its platform and, especially, expand in the Latin American region and the Middle East.
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