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Technological advancements can at times be a bane. Medical devices linked to the cloud and the Internet of Things (IoT) are now quite a double-edged sword. While they effectively enhance the treatment procedure, these devices are exposed to cyber risks.
Any wearable and implantable patient monitoring or therapy device with features like wireless connectivity to alter device functionality and extract patient information can now be hacked.
For instance, in April, the FDA had to issue a Safety Communication to inform the patients about the availability of an additional firmware update to combat with the confirmed cybersecurity risks discovered in Abbott Laboratories’ (ABT - Free Report) implantable cardiac devices along with managing rapid battery depletion.
This is not the only mention of the need to ensure cyber security. A recent survey report by KPMG revealed that around 81% of health care organizations experienced data breach over a two-year period beginning 2015-end (per an article published on 24x7). Going by the same article, medical device threats are ranked as a top information security issue by around one-third of industry executives.
Furthermore, according to the 2018 Cost of a Data Breach Study released by the Ponemon Institute, the average cost of a successful cyberattack across all industries is $3.8 million (per an article from Health Care on Bloomberg Law).
This has developed apprehension in investors who had once considered investing in the MedTech space as relatively safe.
FDA’s Stance on Cyber Risk
A series of incidences like the 2017 WannaCry and Petya ransomware attacks which wreaked havoc on several health care systems worldwide have been continuously drawing attention of regulators. Furthermore, a report published by McAfee, a cyber security company, puts spotlight on the possibility to alter real-time patient heart monitor data by hacking into a hospital network and gaining control of medical devices.
However, the FDA has been working on combating cyber risks since 2013 with the creation of ‘cybersecurity working group’ and has been continuously evolving its device program alongside changes in medical technology and advancements in the systems.
Encouragingly, in April, the FDA announced its Medical Device Safety Action Plan involving changes to the pre- and post-market requirements. As part of the changes, manufacturers will be required to develop ‘Software Bills of Materials’ to be submitted to the FDA during premarket reviews and also handed over to customers and end-users to allow for improved management of networked devices and technologies.
At the same time, the FDA has proposed the formation of the CyberMed Safety (Expert) Analysis Board (CYMSAB). In this regard, we encouragingly note that the proposed federal budget for 2019 by the Trump Administration includes funding to create the CYMSAB (per an article published on Emergo by UL).
Combating Cyber Risk: A Tough Challenge for MedTech Players
There is a growing need for medical device manufacturers to prevent hacking in case of network-connected medical devices.
Most of the analysts are of the opinion that a major hurdle faced by medical device makers is that by the time a product hits the market post approval, which takes five to six years, the technology on which it is based becomes outdated.
Further, per an article published on The Wall Street Journal, several product engineers and architects lack the training necessary for designing safe and secure medical devices.
Going by the same article, manufacturers are believed to have comparatively weaker incident response processes which make it difficult to screen, respond or contain breaches at the time of occurrence. Furthermore, inadequate staff for addressing device security needs is a challenge.
3 Stocks to Escape the Cyber Risks
In the wake of rising threats to cybersecurity of medical devices, investors must be in continuous search for stocks who for the time being safe havens. In this regard, we have zeroed down on some medical information system stocks.
The medical information systems industry comprises a number of companies which develop and market healthcare information systems. These firms offer software and hardware solutions that provide healthcare providers with secure access to clinical, administrative and financial data in a time efficient manner.
The latest trend of electronic health records, electronic medical records, predictive analytics, real-time alerting and revenue cycle management services in the U.S. MedTech space has been gaining prominence.
Here we pick three stocks from the Medical Info Systems industry which make perfect investment choices for your portfolio.
athenahealth, Inc. : The stock of this Zacks Rank #1 (Strong Buy) and Watertown, MA-based cloud-based network provider of services that manage the administrative duties of medical providers has gained 13.5% over the past year. The company’s Bridges suite of solutions support cyber and compliance requirements for healthcare organizations. The Zacks Consensus Estimate for its current-year EPS has been revised 3.2% upward over the last 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
HMS Holdings Corp : Headquartered in Irving, TX, HMS Holdings provides cost-containment solutions in the U.S. healthcare space. The stock has a Zacks Rank #2 (Buy).
Last year, HMS Holdings announced the acquisition of patient engagement specialist Eliza Corporation for $170 million in cash. Eliza offers SaaS services to employers, providers, health plans, hospitals, pharmacies and clinics for medication adherence. In the second quarter of 2018, Eliza completed a special project, which generated revenues of approximately $1.5 million. Management expects Eliza growth to be relatively flat in the third quarter. However, revenues are expected to grow significantly in the fourth quarter.
HMS Holdings has rallied 77.3% in a year’s time.
Fulgent Genetics, Inc. (FLGT - Free Report) : Headquartered in Temple City, CA, Fulgent Genetics along with its subsidiaries, delivers genetic testing services to physicians with clinically actionable diagnostic information. Primarily serving hospitals and medical institutions, the company’s technology platform integrates data comparison and suppression algorithms, learning software, and genetic diagnostics tools and integrated laboratory processes.
This Zacks Rank #2 company has however, declined by 29.2% in a year’s time.
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
Image: Bigstock
Cyber Attack Fears Grip MedTech: 3 Safe Stocks
Technological advancements can at times be a bane. Medical devices linked to the cloud and the Internet of Things (IoT) are now quite a double-edged sword. While they effectively enhance the treatment procedure, these devices are exposed to cyber risks.
Any wearable and implantable patient monitoring or therapy device with features like wireless connectivity to alter device functionality and extract patient information can now be hacked.
For instance, in April, the FDA had to issue a Safety Communication to inform the patients about the availability of an additional firmware update to combat with the confirmed cybersecurity risks discovered in Abbott Laboratories’ (ABT - Free Report) implantable cardiac devices along with managing rapid battery depletion.
This is not the only mention of the need to ensure cyber security. A recent survey report by KPMG revealed that around 81% of health care organizations experienced data breach over a two-year period beginning 2015-end (per an article published on 24x7). Going by the same article, medical device threats are ranked as a top information security issue by around one-third of industry executives.
Furthermore, according to the 2018 Cost of a Data Breach Study released by the Ponemon Institute, the average cost of a successful cyberattack across all industries is $3.8 million (per an article from Health Care on Bloomberg Law).
This has developed apprehension in investors who had once considered investing in the MedTech space as relatively safe.
FDA’s Stance on Cyber Risk
A series of incidences like the 2017 WannaCry and Petya ransomware attacks which wreaked havoc on several health care systems worldwide have been continuously drawing attention of regulators. Furthermore, a report published by McAfee, a cyber security company, puts spotlight on the possibility to alter real-time patient heart monitor data by hacking into a hospital network and gaining control of medical devices.
However, the FDA has been working on combating cyber risks since 2013 with the creation of ‘cybersecurity working group’ and has been continuously evolving its device program alongside changes in medical technology and advancements in the systems.
Encouragingly, in April, the FDA announced its Medical Device Safety Action Plan involving changes to the pre- and post-market requirements. As part of the changes, manufacturers will be required to develop ‘Software Bills of Materials’ to be submitted to the FDA during premarket reviews and also handed over to customers and end-users to allow for improved management of networked devices and technologies.
At the same time, the FDA has proposed the formation of the CyberMed Safety (Expert) Analysis Board (CYMSAB). In this regard, we encouragingly note that the proposed federal budget for 2019 by the Trump Administration includes funding to create the CYMSAB (per an article published on Emergo by UL).
Combating Cyber Risk: A Tough Challenge for MedTech Players
There is a growing need for medical device manufacturers to prevent hacking in case of network-connected medical devices.
Most of the analysts are of the opinion that a major hurdle faced by medical device makers is that by the time a product hits the market post approval, which takes five to six years, the technology on which it is based becomes outdated.
Further, per an article published on The Wall Street Journal, several product engineers and architects lack the training necessary for designing safe and secure medical devices.
Going by the same article, manufacturers are believed to have comparatively weaker incident response processes which make it difficult to screen, respond or contain breaches at the time of occurrence. Furthermore, inadequate staff for addressing device security needs is a challenge.
3 Stocks to Escape the Cyber Risks
In the wake of rising threats to cybersecurity of medical devices, investors must be in continuous search for stocks who for the time being safe havens. In this regard, we have zeroed down on some medical information system stocks.
The medical information systems industry comprises a number of companies which develop and market healthcare information systems. These firms offer software and hardware solutions that provide healthcare providers with secure access to clinical, administrative and financial data in a time efficient manner.
The latest trend of electronic health records, electronic medical records, predictive analytics, real-time alerting and revenue cycle management services in the U.S. MedTech space has been gaining prominence.
Here we pick three stocks from the Medical Info Systems industry which make perfect investment choices for your portfolio.
athenahealth, Inc. : The stock of this Zacks Rank #1 (Strong Buy) and Watertown, MA-based cloud-based network provider of services that manage the administrative duties of medical providers has gained 13.5% over the past year. The company’s Bridges suite of solutions support cyber and compliance requirements for healthcare organizations. The Zacks Consensus Estimate for its current-year EPS has been revised 3.2% upward over the last 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
HMS Holdings Corp : Headquartered in Irving, TX, HMS Holdings provides cost-containment solutions in the U.S. healthcare space. The stock has a Zacks Rank #2 (Buy).
Last year, HMS Holdings announced the acquisition of patient engagement specialist Eliza Corporation for $170 million in cash. Eliza offers SaaS services to employers, providers, health plans, hospitals, pharmacies and clinics for medication adherence. In the second quarter of 2018, Eliza completed a special project, which generated revenues of approximately $1.5 million. Management expects Eliza growth to be relatively flat in the third quarter. However, revenues are expected to grow significantly in the fourth quarter.
HMS Holdings has rallied 77.3% in a year’s time.
Fulgent Genetics, Inc. (FLGT - Free Report) : Headquartered in Temple City, CA, Fulgent Genetics along with its subsidiaries, delivers genetic testing services to physicians with clinically actionable diagnostic information. Primarily serving hospitals and medical institutions, the company’s technology platform integrates data comparison and suppression algorithms, learning software, and genetic diagnostics tools and integrated laboratory processes.
This Zacks Rank #2 company has however, declined by 29.2% in a year’s time.
Best Electric Car Stock? You'll Never Guess It.
Zacks Research has released a report that may shock many investors. One stock stands out as the best way to invest in the surge to electric cars. And it's not the one you may think!
Much like petroleum 150 years ago, lithium battery power is set to shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge. With battery prices plummeting and charging stations set to multiply, revenues that were already at $31 billion in 2016 are expected to blast to over $67 billion by the end of 2022.
See Zacks Best EV Stock Free >>