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Motus GI Up 35% Premarket – Is The Covid Wait Over?

Tim Worstall
Tim Worstall trader
Updated 14 Feb 2022

Trade Motus GI Shares Your Capital Is At Risk

Key points:

  • Motus GI has been developing colonoscopy tools
  • The use and rollout has been delayed by the covid pandemic
  • Now that the pandemic is over will Motus GI be able to market?
  • Best Healthcare Stocks to Buy Right Now

Motus GI Holdings Inc (NASDAQ: MOTS) stock has been having a bad time of it recently, not really for any fault of the company’s. Motus develops a colonoscopy tool and the pandemic has put paid to the ability to launch that developed tool. Partly because of the difficulties in launching something when everyone’s cowering at home, partly because colonoscopies aren’t things at the forefront of peoples’ minds during a pandemic. Fairly fundamental problems they’ve got there.

Motus GI has made this clear in its own releases to the stock markets “The Company has begun commercialization of its second-generation Pure Vu System but does not expect to generate significant revenue from product sales until the COVID-19 pandemic has fully subsided and it further expands its commercialization efforts, which is subject to significant uncertainty.”

Junior medical companies, of which Motus GI is one, obviously, have a series of problems, hurdles to overcome. The first one is of course which problem to try to solve? Design some medical equipment, or try to find a drug, what actually to do? Then there are the varied stages of working out whether something does actually work. Then we get to things like patents, FDA licences, and so on.

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Any company can fail at any of these points. Motus GI seems to have managed to get past all of them. But is now left with the big question. Well, does anyone actually want to buy this whatever it is that has been designed, licenced, patented, and so on?

That’s where Motus GI has been stopped in its tracks. The covid pandemic has both reduced the amount of preventative and diagnostic medicine being practised and also made it vastly more difficult to actually do the marketing. The marketing of medical equipment does still largely rely upon visits to doctors offices and demonstration of the equipment after all.

So, a useful thought is that now the covid pandemic is – largely enough – over then Motus can get on with the business is seeing whether there are any customers for what it has developed. We can imagine that this might produce a bounce in the share price of course.

The question then becomes, well, will there actually be any customers? This might come as something of a surprise to Brits, possibly to other Europeans, but a colonoscopy is a standard procedure in the US. It’s not just used to follow up on known problems. It’s something that is recommended – well, possibly advised to recommended – once every decade for those over 50 with no more than just average risk of colon cancer. This does make it a fairly large market for colonoscopy equipment. Also, something where more efficient equipment might well find a welcoming home.

The next test for Motus GI is going to be that pure market one. How many people actually want to buy what it has designed and produced? The current bounce in the share price might well be because it is now able to find out. Any long-term revaluation is going to depend upon the answer.

Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.