A Deadly Trend in Biotech

Written By Jason Stutman

Posted November 11, 2013

It was a beautiful spring morning. Julia tossed her suitcase into the trunk of her two-door coupe and started up the engine…

It had been a long semester so far, and she was excited to take a break to see her family back in Petersburg, Virginia.

Unfortunately, Julia only made it four intersections that day and was hit on the passenger side by a driver who fell asleep at the wheel. The crash put Julia into critical condition and eventually claimed her life.

As you can imagine, Julia’s family was devastated.

Over time, they were able move forward, taking solace in the fact that Julia’s death was not in vain.

You see, Julia was young, healthy, and a registered organ donor. She saved several lives through her donation.

Each year, there are less and less people like Julia, a trend that is both bitter and sweet.

The good news is that thanks to rapid advancements in vehicle safety, the number of automobile deaths relative to the population has decreased drastically since the mid 1970s.


The bad news is that the overall quality of organ donors is decreasing as a result.

Automobile accidents are the leading cause of death among teens and young adults, and as these deaths continue to diminish, so does our supply of young and healthy organs.

Of course, the solution to this problem doesn’t lie in reversing the above trend. Less automobile deaths will always be a good thing. Instead, the solution will stem from advances in both health care and biotechnology.

Wealth from Health

At any given moment, there are approximately 120,000 people in the United States alone waiting on an organ transplant.

Every 10 minutes, a new name is added to that list. Each day, 18 people pass away before they reach the top of that list.

Add an aging population into the mix, and the situation becomes somewhat frightening…

Each and every year, the gap between donors and potential recipients widens.


To make matters worse, the infrastructure for organ donation in the U.S. is incredibly convoluted. There are 52 different state-based registries serviced by 58 different organ procurement organizations (OPOs), which often makes it difficult to match up donors and recipients.

Organ donation is incredibly time sensitive, and the system’s efficiency is often a matter of life and death. With organ registry having historically been in the hands of the DMV, it’s no surprise that the matching process is slower than we want it to be.

Fortunately, technology and big data are beginning to offer us some relief to this problem…

Microsoft (NASDAQ: MSFT) and The Knight Foundation, for example, are working to build a technology platform called ORGANIZE that will streamline communication between all 52 state registries. The system will allow for easier donor registration and efficient data analysis to find higher-quality matches at a faster rate.

With just 42% of Americans registered as organ donors, the potential for improvement is massive. However, even if everyone were registered, it still wouldn’t be enough to cover the entire waiting list.

In fact, there would still be more than four times as many potential recipients as there would be donors.

So while big data can increase efficiency and decrease waste, it certainly can’t make organs out of thin air.

That’s a task left for companies like St. Jude Medical (NYSE: STJ).

In 1994, St. Jude acquired Pacesetter, which introduced the world’s first fully implantable pacemaker.

Since then, St. Jude has become the international leader in cardiac and neurological device technology, and its shareholders have reaped the benefits…


Anyone who realized the value of these medical devices in 1994 would have made gains well over 1,000% (and that’s ignoring any reinvested dividends).

Today, we’re witnessing a similar situation unfold with several small-cap medical device and biotechnology companies across the U.S. These companies are revolutionizing health care and building products and services set to be far more expansive and profitable than even St. Jude’s pacemaker.

The opportunity here is simply massive — which is why we’ve been keeping a close eye on this space.

In the last three months alone, we’ve witnessed multiple acquisitions and several advancements in FDA trials across our picks.

There’s no telling how high these companies will go, but one thing is for certain: The earlier you get in, the better.

Turning progress to profits,

  JS Sig

Jason Stutman

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