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TICKERS: DRIO

This Tiny Digital Healthcare Company's Sales Should Rocket Higher
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Matt Badiali Independent financial analyst Matt Badiali profiles a small cap whose blood glucose monitoring system works with any smartphone.

"We're just waiting for the Logo…that's when the transformation happens."

The analyst on the phone confused me for a second…

"Logo?" I asked.

"You know, a big-name company that adopts their tech…a logo."

That was a couple of months ago. The company in question was DarioHealth Corp. (DRIO:NASDAQ), a $133 million digital therapeutics company. Up to that point, Dario had an impressive user base of 60,000 individuals that signed up for its smart app on Google and Apple.

What it lacked was a "Logo." For the company to really turn the corner on growth, some big companies needed to adopt its technology. It needed access to a large pool of customers. That's what a Logo would do for them.

It seems like an easy sell. Dario makes a blood glucose monitoring system that works with any smartphone. The app collects the data and helps users manage their blood glucose. It's like Fitbit for diabetics…and its users love it. It has a 4.6-star rating on Google Play Store.

The goal of Dario's app is to improve health. Its initial focus is on diabetics and pre-diabetics, helping them reduce their A1c blood glucose measures. A1c is the "gold standard" measure of blood sugar control. Uncontrolled A1c has a huge impact on healthcare cost.

Reducing A1c demonstrably decreases healthcare costs. A 2018 paper published in Applied Health Economics and Health Policyexamined data from 3,197 patients over five years. Patients that decreased A1c over that period cut healthcare costs by 24% in the first year and 17% the second year. That reflects a two-year savings of more than $3,000 per patient.

The conclusion of that paper was that reducing A1c over a short timeframe may lead to substantial reduction in healthcare costs. They concluded that health plans and other payers should pursue that outcome.

Dario's users are so happy that the company had a massive buy-in when it began to study the effectiveness of its methodology. From 2017 to 2019, over 20,000 users participated in eight scientific studies presented at three leading diabetes conferences. That's enormous trust from its clients.

And the results of the studies demonstrate just why Dario's clients are happy. On average, users reduced blood glucose (A1c) by 1.4% after one year. That's a huge improvement.

To put that in perspective, comparable studies on oral antidiabetic prescription drugs only reduced A1c by 0.5% to 1.25%. However, these drugs can cost up to $720 per month. In contrast, Dario's app costs around $25 per month.

Dario's success represents a gross savings estimate of about $2,380 per person per year in healthcare costs.

That's why its recent announcement of its selection as an employee health benefit by a self-insured, Fortune 500 subsidiary is a big deal. It marks the first move for Dario into this market. Access to large lists of companies should dramatically increase Dario's subscriber base. And while it isn't a Logo yet, that's the logical next step.

If you are interested in the massive growth of digital therapeutics companies, look at DarioHealth (Nasdaq: DRIO). It's a company on the move.

--Matt Badiali

Reach Matt Badiali at www.mattbadiali.net.

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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Streetwise Reports Disclosure:
1) Matt Badiali: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: DarioHealth. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: I am a consultant to DarioHealth. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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