Who Will Profit In The Global War Against Kidney Disease?

As the emerging market nations of the world become more affluent, trillions more will be spent on health care in these lands, especially China and India. Ironically, the greater level of riches in these countries will lead to more cases of lifestyle ailments, especially the various types of kidney diseases. As such, companies ranging in size from Becton, Dickinson & Co. (BDX) to Amgen (AMGN) to PLC Systems (OTC: PLCSF) are well positioned to profit from this trend in health care.

According to studies, the global consumer class should reach one billion. India already has the largest middle class in the world. Economic development is also increasing across the continent of Africa. With the larger middles class will be more health care expenditures.

China, as the second largest economy in the world and biggest consumer so many commodities, presents a very compelling case for investing in the global crusade against kidney disease. The People’s Republic of China is seeking to develop more of a consumer economy in China. At present, about 40% of the gross domestic product of China is dependent upon exports to the United States and Great Britain. By contrast, about 70% of the gross domestic product of the United States is based on domestic consumer spending.

Beijing wants to see health care spending increase in the world’s most populous country. Looming large in China, and other emerging market nations, is kidney disease. According to the World Health Organization, “kidney disease is increasing dramatically and the cost of treating this enormous epidemic represents an enormous burden on healthcare systems worldwide.”

There are many factors contributing to the worldwide expansion of kidney disease. The rising affluence around the world leads to richer diets. The more disposable income that a consumer has, the more is spent on restaurant fare and processed foods. Too much of that leads to diabetes and other kidney diseases. According to “The Rise in Chronic Kidney Disease,” a report by the World Health Organization, 240 million people in the world have diabetes today. The report furthers that:

This figure is projected to rise to 380 million by 2025, largely due to population growth, aging, urbanization, unhealthy eating habits, increased body fat and a sedentary lifestyle. By 2025, the number of people with diabetes is expected to more than double in South-East Asia, the Eastern Mediterranean and Middle East, and Africa. It is projected to rise by nearly 20% in Europe, 50% in North America, 85% in South and Central America and 75% in the Western Pacific region. The top five countries with the highest prevalence of diabetes in order include India, China, the United States, Russia and Japan. Worldwide more than 50% of people with diabetes are unaware of their condition and are not treated.

What investors should be aware of is what Becton Dickinson, Amgen, and PLC Systems have to offer in upside potential in combating kidney disease
As a Dividend Aristocrat, Becton, Dickson & Co. presents a blue chip way to invest for international sales in medical technology. With almost 40,000 employees, about two-thirds of Becton, Dickinson’s sales are to overseas customers. Many of its products are used in the various facets of detecting and treating kidney disease.

Amgen is one of the biggest biotechnology firms with sales of $17.5 billion in 2012 from a broad array of products that fight kidney disease and other ailments. As examples, its protein-based therapeutic products such as Aranesp and Epogen fight anemia in chronic kidney disease. Pretty much a pure kidney play, PLC Systems is a small cap focused on the cardiac and vascular market. Its top product is RenalGuard, which expeditiously removes contrast dyes that are toxic for kidneys. Studies have proven that RenalGuard is effective in preventing Contrast-Induced Nephropathy. There is a RenalGuard study underway to support a planned Premarket Approval filing with the United States Food & Drug Administration.

Depending on the risk tolerance level of the investor, these three companies offer an array of methods for profiting in gains against kidney disease. Due to its small cap status, PLC Systems offers the most upside. As a Dividend Aristocrat, Becton, Dickson & Co. offer more modest gains, although it is up almost 30% for 2013. It is much the same story with Amgen, up more than 16% for the year.