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Report on BioElectronics, Corp. – Sizing the
Market Opportunity and Assessing Possible
Quality
Independent
Outcomes for the Company
Research
6-Month Share BioElectronics Corp., which trades under the ticker symbol BIEL is the
Target Price: maker of disposable, inexpensive, drug-free, anti-inflammatory medical
devices and patches. Our six-month target price for these shares is $0.30
$0.30 to $0.50
to $0.50, assuming FDA actions take place as we expect.
Our Analyst
Certification: The Company was recently awarded a U.S. patent that protects its
I, Carrie Snyder,
intellectual property and revolutionary product design for a portable PEMF
independent analyst, device that is worn against the skin.
hereby certify (1) that
the views expressed Consumers now have the choice of an effective drug-free therapy-aid in
in this research
Company report BioElectronics Corporation’s PEMF patches for managing pain, promoting
accurately reflect my healing and speeding surgical recovery. The recent FDA panel
personal views about
any or all of the recommendations regarding the potential dangers of acetaminophen, and
subject securities or their corresponding recommendation to remove Extra Strength Tylenol®
issues reflected in this
Company from store shelves, has damaged Tylenol’s brand equity and is beginning
report, and (2) no to focus a meaningful amount of attention on BioElectronics.
part of my
compensation was, is,
We believe the market opportunity for the Company's products is
or will be directly or
indirectly related to significant, especially as related to the treatment of back pain, menstrual
specific pain and general musculoskeletal complaints.
recommendations or
views expressed in
this Company report. The review of multiple FDA clearances is highly probable. Data from a
recently announced heel and foot pain study shows a high degree of
Please see important efficacy and was produced by a very prominent surgeon. We expect this
disclosures and to lead to rapid FDA clearance. We also believe the AllayTM product will
Analyst Bio at the end
of this report receive FDA clearance.
August 3, 2009
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BioElectronics Corp. – Sizing the Market Opportunity
I
a clinically proven and widely accepted anti- We believe the market opportunity for the
inflammatory and pain relief therapy that Company's products is significant and have
V traditionally has only been obtainable from examined several scenarios for market size within
very large machines located in clinical various key segments, as outlined in this report.
E settings or hospitals. BioElectronics was
recently awarded a U.S. patent that protects Given that this report analyzes only a few of the
the Company’s intellectual property and main market opportunities the Company currently
revolutionary product design for a portable faces, we would consider this forecast to be
S PEMF device worn against the skin. moderately conservative.
U Over the past few decades, the medical Overall, however, we believe the largest market
industry has made only limited strides in opportunity for the Company is the treatment of
M developing effective drugs and back pain, followed by the market for treating
dysmenorrhea (menstrual pain) which is also
M
methodologies for the management of pain.
Several years ago, the U.S. government’s significantly sized albeit somewhat smaller.
A Food and Drug Administration (FDA) Another substantial market opportunity is that for
removed many non-steroidal anti- treating other musculoskeletal complaints as well
R inflammatory drugs (NSAIDs) from the as the market for pet and animal therapy
marketplace and an FDA panel recently made treatments.
Y a similar recommendation relative to Extra
We would also note that BioElectronics is
Strength Tylenol®, citing that acetaminophen
somewhat of a “restart” Company in that it
is the leading cause of liver failure in the
experienced product quality problems several
United States. Throughout most of the
years ago, which have now been solved. New
western world, many consumers have been
international distribution has also been
conditioned to “reach for a pill” when
established, clinical studies are quickly coming to
seeking to alleviate pain.
a close, and the Company recently filed an FDA
Through the use of BioElectronics remarketing application and has commented that
Corporation’s PEMF patches, however several more will be forthcoming.
consumers now have an effective non-drug
We believe its very possible the Company could
choice for managing pain, promoting healing
gain multiple FDA clearances, especially given
and speeding surgical recovery.
the recently completed heel/foot pain study which
could likely lead to indications for heel/foot pain,
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BioElectronics Corp. – Sizing the Market Opportunity
plantar fasciitis and, quite possibly, a wide scale While it is difficult to ascertain the precise value
indication for general musculoskeletal complaints. This of multiple FDA indications in two of the key
would enable the Company to market its entire markets that we believe could be worth perhaps as
ActiPatchTM product line over the counter (OTC) in the much as hundreds of millions of dollars per year
lucrative grocery and drug store chain markets. We also to the Company, we believe it would not be
believe clearance for the AllayTM Period Relief Patch is unreasonable to see the total market capitalization
highly likely, as the related data has shown strong of BioElectronics rise to between $300 million
advocacy and 100% user safety. and $500 million, if certain key events take place
as outlined above.
We also believe it is very important that the Company's
balance sheet has recently been improved through the We also believe the Company could be a highly
elimination of nearly all convertible debentures. One attractive future partner or acquisition candidate
year ago, convertible debenture balances exceeded for one of the major consumer products or
$900,000. Today, balances are likely less than $50,000 pharmaceutical corporations.
and could even go to zero over the next few weeks.
Within our targeted potential market capitalization
While paying off this convertible debt was expensive
range, BioElectronics’ shares could be valued
from a shareholder dilution standpoint, we believe the
between $0.30 and $0.50, again assuming these
vast majority of this delusion is now behind the
multiple FDA indications are granted.
Company.
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BioElectronics Corp. – Sizing the Market Opportunity
Over the past few years, considerable corporate resources have been
expended on domestic and international certifications and clearances.
BioElectronics now has ISO and European Common Market
certification as well as Health Canada approval for the relief of pain in
musculoskeletal complaints.
Over the past year, the management team has taken some important
steps that have enabled the Company to remain viable. Specifically,
products lines have been organized into several categories in order to
target specific applications in the areas of surgical recovery, treatment
of musculoskeletal complaints, menstrual pain, and animal related pain
and surgical recovery. BioElectronics has also significantly reduced
staff and expenses while moving core manufacturing offshore, with
final assembly, testing and packaging remaining at the Company’s
Frederick, Maryland headquarters.
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BioElectronics Corp. – Sizing the Market Opportunity
The elimination of these notes is a major event for the Company and its
shareholders, enabling BioElectronics to significantly reduce its cost of
capital and thereby attract new investors. Another major development
was the recent guarantee by the U.S. Export-Import Bank, which will
allow the Company to greatly improve its working capital position and
augment its ability to service its growing international distribution
network.
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BioElectronics Corp. – Sizing the Market Opportunity
marketing programs.
In our view, an FDA clearance for either the AllayTM product or for
general musculoskeletal complaints opens a world of possibilities for
distribution, strategic alliances or even an acquisition of the Company.
We believe it is possible, for example, that a scenario could develop
where one of the major consumer goods manufacturers seeks to acquire
either the AllayTM or ActiPatchTM products for mass consumer
distribution, with a full acquisition of BioElectronics and its
technologies also a distinct possibility, again assuming all FDA
clearances are granted.
We are also expecting the Company to move off of the pink sheets and
onto the OTC market by the end of the year. We expect this could
happen either via a direct application for trading on the OTC market
following completion of a financial audit, or via an acquisition by a
publicly traded OTC company.
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BioElectronics Corp. – Sizing the Market Opportunity
$0.40.
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BioElectronics Corp. – Sizing the Market Opportunity
Tesla published a paper that he read at the eighth annual meeting of the
American Electro-Therapeutic Association in New York in which he
stated that one of the early observed and remarkable features of pulsed
magnetism was its apparent harmlessness, which made it possible to
pass relatively great amounts of electrical energy through the body of a
person. In those early days of PEMF therapy, coils up to three feet in
diameter were used for magnetically treating the body without contact.
In his 1898 paper, Tesla concluded that bodily "tissues are condensers,"
which are the basic component (dielectric, or a non-conducting
substance) for an equivalent circuit only recently developed for the
human body. This unique property of the human body indicates an
inherent adaptation and perhaps innate compatibility toward the
presence of high-voltage electric fields, possibly due to the high trans-
membrane potential already present in cellular tissue. Tesla also
indicated that the after-effects to patients from his coil treatment were
certainly beneficial. Tesla is best known for his plasma energy work
starting around the turn of the century. The original Tesla therapy
devices, called pulsed diathermy devices, were in common use in
hospitals until the 1950s. These devices were dramatically successful,
as are their modern day successors, in treating a wide range of
conditions.
A later theory by Georges Lakhovsky (1869-1942) held that each cell
in the body of an organism, whether plant, animal or a human being, is
in itself a little radio receiver and works on its own unique little
frequency. He considered that each cell, in addition to being tissue as
well as biology, was also electricity. Within this theory, Lakhovsky
held that pathology was a not matter of biological concern or
intervention, but one of electrical concern and intervention.
His philosophy was that "the amplitude of cell oscillations must reach a
certain value, in order that for the organism to be strong enough to
repulse the destructive vibrations from certain microbes." He went on
to say, "the remedy in my opinion, is not to kill the microbes in contact
with the healthy cells but to reinforce the oscillations of the cell either
directly by reinforcing the activity of the blood or in producing on the
cells a direct action by means of the proper rays." The record of his
treatment of degenerative disease with what amounts to an early
"energy-medicine" device, Lakhovsky’s Radio-Cellulo-Oscillator, was
deemed remarkable.
While electrical devices had been in widespread use to manage pain
and “cure” everything from cancer to impotency, in the early part of the
20th century electromedical current therapy fell into a period of
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Inflammation Phase
The healing process actually begins at the moment of injury, as the
body’s repair response is initiated immediately. Under a biological
phenomenon known as the inflammatory cascade, the presence of tissue
injury or pathogens in the bloodstream elicits an inflammatory response
and results in edema in the area of injury which is responsible for the
onset of pain and swelling.
The main function of the inflammatory phase is phagocytosis of
bacteria, which is the process used by the human body to destroy dead
or foreign cells. It is important to note that phagocytosis is not
essential for aseptic, non-invasive or normal wound healing.
Proliferation Phase
The proliferation phase is characterized by the migration of new cells
and the formation of granulation tissue, or the perfused, fibrous
connective tissue that replaces a fibrin clot in healing wounds. It is
during the proliferation phase, around the third day following an injury,
that collagen is first detected in the wound. Large quantities of
collagen serve to form the extra-cellular matrix (ECM) that is
responsible for imparting tensile strength to the wound’s or injured
area’s scar tissue.
As a side note, most of the cells in multi-cellular organisms are
surrounded by a complex mixture of nonliving material that makes up
the extra-cellular matrix. This matrix is secreted by the cells and
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Maturation Phase
Almost as soon as the extra-cellular matrix is established, its
reorganization begins. In a process known as remodeling, there is a
gradual change in the cellular composition and vascularity of the
reparative tissue. Wound contraction, or inward movement, is another
important step in the healing process. Early inflammatory reduction,
such as that delivered via PEMF therapy, and wound closure can help
reduce scarring and increase the healed area’s tensile strength.
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agents such as nitrous oxide and histamine, among others, released into
tissue following an injury. These mechanisms provide an environment
in which cell-to-cell communication in the involved tissue area is re-
established. By helping to re-establish coordinated cell activity in
injured tissue, PEMF therapy can induce an immediate reduction in
swelling and inflammation of the damaged tissue, and decrease the
associated pain of tissue injury, and contribute to a beneficial
acceleration in the body’s normal the healing process.
Effective PEMF
Therapy Restores
Cell Membrane
Electrical Potential
to Normal Levels
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Market Opportunity
The market potential for PEMF therapy products is significant and
growing substantially, likely representing a possible market opportunity
of hundreds of millions of dollars per year on a worldwide basis.
For decades, physicians and therapists around the world have used
pulsed electromagnetic field therapy to relieve a host of ailments and
accelerate healing, including use for reducing swelling (edema) and
inflammation, muscle pulls and strains, relieving pain, accelerating
bone fracture repair, facilitating surgical injury recovery, osteoarthritis,
sprains, cuts and bruises and to help heal chronic wounds, among other
applications. Over the past few years, it is now becoming more
generally accepted within plastic surgery, orthopedics, sports and
physical medicine and chronic wound care areas that using electrical
energy to direct a series of magnetic pulses through injured tissue
exerts a range of beneficial effects, as each magnetic pulse induces a
tiny electrical signal to stimulate cellular repair and accelerate patient
healing. Nonetheless, despite the technology’s long-time existence and
more modern day introduction into the field of healing, the actual
addressable markets that could benefit from PEMF therapy remain both
under-informed and underserved.
While many people suffering from injury, recovering from surgery and
even enduring general physical discomforts could likely benefit from
PEMF treatment, much of the consumer/patient population as well as
the medical community at large are either unaware or do not often
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C-Section Market
In 2006, the last year for which data is available, the rate of U.S. births
by C-section hit an all-time high of 31.1%, or 1.34 million births via c-
section out of a total 4.3 million births that year. America leads the
world with one of the highest percentage rates of C-sections performed
per births, in addition to Italy and Australia.
To target this market, BioElectronics has developed a Caesarian
Section Recovery Kit for drug free pain relief and accelerated healing.
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treatment for the pain and discomfort associated with menstruation, for
which we believe there is a significant market opportunity. Various
researchers estimate between 60% and 70% of women suffer from pain
during menstruation, with millions of women experiencing pain severe
enough to restrict their daily activities.
There are currently approximately 300 million people in the United
States with roughly half or about 150 million representing women.
Assuming approximately one third are of childbearing age, the total
potential addressable market for the Company's AllayTM product
becomes around 50 million women in the United States. Gaining only
a 5.0% market share of this segment would represent a significant
market opportunity for the Company of approximately 500,000 women.
Considering each AllayTM product lasts for approximately three periods
(over three months time), many women would likely purchase up to
four units per year. At $40.00 per unit and a 5% market share,
BioElectronics could easily experience revenues of $80 million per
year in the United States, with the European market likely being
equivalently sized.
Below, we have speculated some possible market sizing scenarios
relative to the Company's Allay Period Relief Patch Product.
Menstrual Pain Market Opportunity
Total women in the U.S.A. (approx. half the 300MM population): 150,000,000
* 1/3rd are of childbearing age: 50,000,000
* Approx. 20.0% experience severe to moderate mentral pain: 10,000,000
Allay™ brand for menstrual pain (one patch good for 3 month duration) product price : $40.00
* Product sales per year (12 months): $160.00
Market Market
PEMF Market Share Analysis: Share Stake Share Value
1.0% market share stake 100,000 $16,000,000
2.5% market share stake 250,000 $40,000,000
5.0% market share stake 500,000 $80,000,000
7.5% market share stake 750,000 $120,000,000
10.0% market share stake 1,000,000 $160,000,000
12.5% market share stake 1,250,000 $200,000,000
15.0% market share stake 1,500,000 $240,000,000
17.5% market share stake 1,750,000 $280,000,000
20.0% market share stake 2,000,000 $320,000,000
Veterinary Market
BioElectronics recently entered the veterinary care market in early
2009 when the Company launched its HealFast™ Therapy electro-
treatment line for dogs, cats and horses (equine). Based on the
Company’s same ActiPatch™ technology, HealFast™ Therapy is a
drug-free line of wearable patches sized for pets to fit the wound or
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BioElectronics Corp. – Sizing the Market Opportunity
sore joint of the animal. HealFast™ helps rapidly restore normal cell
function and accelerate healing, speeding the healing of muscle and
tendon injuries in animals.
BioElectronics offers three separate product lines for dogs, cats and
horses (equine), with each product line comprised of three distinct
offerings:
HealFast™ Therapy Kit for chronic pain conditions, including
sore muscles, tendons or joint pain in which the patch can be
directly positioned over the swollen location or joint without
putting adhesive on the pet's fur;
HealFast™ Flex Loop Pet Patches for boosting the speed and
strength of healing following surgery where the patch can be
applied by veterinarians over surgical wounds using the
medical tape of their choice and;
The HealFast™ Crescent Patch for sores or abrasions.
In the United States, the veterinary services market is estimated to be
an approximate $28 billion per year industry. While animal hospitals
and clinics treat injuries and diseases, they derive most of their revenue
from animal health procedures like neutering and spaying, vaccinations
and regular checkups.
As further evidence of the importance of the U.S. market for veterinary
services and products, the United States has more dogs per capita than
any other country in the world. According to the American Pet
Products Manufacturers Association 2007-2008 National Pet Owners
Survey, there are approximately 74.8 million owned dogs in the United
States, 75% of which are spayed or neutered, with dog owners spending
an average of about $219 on veterinary visits (vaccine, well visits)
annually.
Furthermore, there are approximately 88.3 million owned cats in the
United States, 87% of which are spayed or neutered, with cat owners
spending an average of about $175 on routine vet visits per year.
Additionally, there are approximately seven million “prized animal
status” horses owned in the United States. Owners and trainers of these
important animals spend a significant sum of money each year for their
care and treatment, likely in the range of several thousands of dollars or
more per year. We believe the equine market alone is very significant
and will likely be the sector in which the Company places the majority
of its emphasis.
We also believe there is a substantial market in the greyhound racing
industry. Within the greyhound racing industry, there is a strong
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they can cause ulcers and bleeding, high blood pressure and kidney
disease.
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Source: Brandweek
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ActiPatch™ Therapy
Each of the Company’s retail kits are unique to the market as drug free,
anti-inflammatory therapeutic agents that rapidly and safely reduce
pain, swelling and required healing time. Each retail kit is designed for
720 hours of use, with an on/off mechanism, and includes a free
extremity wrap and an unconditional money back guarantee.
ActiPatch™ Therapy devices are wafer thin, easily concealed,
comfortable and easy to use. There are no “messy” odorous topical
ointments or creams and, because they do not use heat or ice, they are
safe to use for diabetics and the bedridden.
The key benefit of the ActiPatch™ Therapy product is portability,
namely the complete mobility of the user while wearing the PEMF
patch. This portability feature of the product and mobility of the patch-
user enables a quicker functional return to the patient’s regular
activities resulting in less lost time from work, sports and other
activities. Specific markets addressed by the Company’s PEMF based
ActiPatch™ solutions are discussed below.
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BioElectronics Corp. – Sizing the Market Opportunity
Back Pain – More than 25% of adults in the United States suffer from
back pain at some point during their lives. While the number of
medically untreated patients is unknown, Proctor & Gamble spent $35
million to launch its ThermaCare product, effectively a disposable
heating pad. The ThermaCare system for back pain consists of two
extra large pads at a cost of either $7.59 or $3.79 for an eight hour heat
treatment. Neither ThermaCare nor competitive products make a
specific medical claim as to any therapeutic benefits. Nonetheless, U.S.
sales of ThermaCare exceed six million units. Given the current
acceptance and application of such products by the patient, it is likely
consumers will pay a premium for the convenience and mobility of not
having to use a heating pad to treat their pain. Bioelectronics’ products
are priced very competitively relative to the ThermaCare back pain
product. The product retails for approximately $39.95 and last for
approximately 720 hours, which equates to less than six cents per hour
of treatment.
Knee Pain - Knee pain is one of the most common musculoskeletal
issues that causes people to see their doctor, and with today's
increasingly active and aging society, the number of knee problems
people are experiencing is increasing. Knee pain is generally treated
with ice or heat, rest and drug therapy. ActiPatch™ is an inexpensive,
effective therapy that provides convenient pain relief and accelerated
recovery.
Foot & Ankle – The Company’s ankle and foot kit is a unique
therapeutic agent for a multitude of foot ailments including ankle
sprains, heel pain, arch pain, achilles tendonitits and tarsal tunnel
syndrome. The ActiPatch™ provides overnight relief and restoration
of functionality for acute injuries of the foot and ankle. One of the most
important markets relative to foot and ankle pain is plantar fasciitis,
which is the most common cause of heel pain. This condition causes
pain and inflammation of a thick band of tissue called the plantar
fascia, which runs across the bottom of the foot connecting the heel
bone to the toes. Plantar fasciitis often causes a stabbing pain that
occurs with the first steps taken in the morning. While this pain often
diminishes as the ligament limbers up, the pain often returns later in the
day after periods of standing or after getting up from a seated position.
Rates of plantar fasciitis are rising rapidly in the United States and
Western Europe as the condition is often related to obesity.
With the recent study completed by Dr. David G. Genecov who used
the ActiPatchTM product to treat this condition with what appears to be
statistically significant efficacy, we believe this product could be a
winner for BioElectronics.
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BioElectronics Corp. – Sizing the Market Opportunity
AllayTM Menstrual Pain Therapy, often called the AllayTM Period Relief
Patch, is a new, drug-free treatment for pain and discomfort associated
with menstruation. The Company filed for U.S. FDA pre-marketing
clearance to market the product in the United States on June 15, 2009.
We believe this is a revolutionary new product for this market sector.
Most women typically use acetaminophen or ibuprofen to treat pain
associated with dysmenorrhea (period pain), with many women taking
maximum dosages of these medications.
The drug-free AllayTM product, on the other hand, is usually worn
tucked into a woman's undergarments with the product’s flexible loop
covering the site of pain. The product will last an average woman for
about three or four periods (ie: three or four months).
The AllayTM product retails for $39.95 and is currently being marketed
over the Internet within the United States, although women must
successfully complete a health related questionnaire designed by
medical professionals to qualify for the product.
Placement of the Allay AllayTM Period Relief Patch on Woman
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BioElectronics Corp. – Sizing the Market Opportunity
Below, is a photo of the AllayTM Period Relief Patch and its hypo-
allergenic product sleeve.
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respectively.
On June 6, 2009 the Company released the results of a larger study.
The randomized, double-blind and positive controlled clinical trial was
conducted in two different cities, Indianapolis and San Francisco, on
randomly selected women between the ages of 18 years and 35 years
who experienced moderate to severe menstrual pain. AllayTM patches
were worn at the onset of the menstrual cycle for five consecutive days.
Prior to wearing a patch, each woman reported her level of pain during
a traditional menstrual cycle. 91 total women were enrolled in the
study; 48 patients had active patches while the remaining 43 used
placebos.
The results of the study were impressive. Of the AllayTM patch group,
77% reported either complete elimination or reduction in their typical
menstrual pain symptoms. Four patients in the active group actually
reported no pain at all while the average amount of pain reduction for
the remainder was 55%. Approximately half of these women showed
at least a 50% reduction in pain. Within the placebo group, however,
no patients reported complete elimination of pain while the reduction in
pain averaged only 20%. The difference in results between these two
groups was determined to be statistically significant.
From these results, the principal investigator, Dr. Barry Eppley,
concluded that the AllayTM patch is an effective and safe non-drug
method for use in the treatment of primary dysmenorrhea.
Furthermore, the conclusion that the patch was effective in additional
finding is also of significance, in our opinion. Dr. Eppley also
concluded that while the patch can be used as a primary treatment
method for those women with moderate dysmenorrhea, and certainly
for more severe cases of dysmenorrhea, it can also be used as an
adjuvant treatment to reduce the amount of total treatment duration or
use of other oral medications, such as acetaminophen.
As we indicated above, BioElectronics applied for FDA pre-marketing
clearance for the AllayTM product on June 15, 2009. We believe this
data presents a compelling case for its clearance and find it important
that, considering the FDA's assessment of acetaminophen and its
potential dangers, rejection seems unlikely.
We also believe that FDA clearance is likely because the basic
technology on which the AllayTM product is based has already been
approved as safe by the FDA for the plastic surgery procedure called
blepharoplasty (eyelid surgery). Therefore, it appears that
BioElectronics must only prove efficacy, which appears to be supported
by the clinical study data.
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RecoveryRx™ Therapy
BioElectronics has developed five distinct Surgical Recovery Kits for
the medical market segment under the trade name RecoveryRx.™
Products currently available for this market are primarily designed for
the cosmetic and oral maxillofacial markets for plastic and
reconstructive surgery.
Marketing into the surgery market has been difficult for BioElectronics
for two main reasons. The first is a lack of FDA clearance for surgeries
other than blepharoplasty. The second is resistance among most
surgeons to implement innovative technologies and techniques.
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BioElectronics Corp. – Sizing the Market Opportunity
data is available for their review. A lack of clinical data thus far has
hence slowed market acceptance of the Company’s RecoveryRxTM
product line.
While the lack both of clinical data and additional FDA indications of
use beyond blepharoplasty have clearly been a major factor in the
limited acceptance of the RecoveryRxTM product line, in our opinion,
surgeon resistance is probably a more significant reason for explaining
the Company’s low penetration rate. In our view, many surgeons seem
to project an attitude that surgical recovery is inherently painful and
that patients will recover through the natural healing process. For this
reason, it appears use of a portable PEMF device to reduce pain and
speed healing is simply not compatible with the thought process
invoked by many surgeons.
HealFastTM Therapy
HealFastTM Therapy is a drug-free therapy for horses, cats and dogs that
reduces swelling and pain while speeding the healing time of muscle
and tendon injuries, sores and incisions. BioElectronics launched this
product line early in 2009, with the primary target markets being
equines and companion animals. To date, the Company has seen some
success with veterinarian endorsements and horse trainers and we
expect to hear about distribution agreements for the product over the
coming months.
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back pain. We also believe the AllayTM Period Relief Patch represents
an additional, meaningful market opportunity for the Company. As
also indicated above, however, we are less positive about the market for
general surgical related products since the process of revising current
attitudes among surgeons can be both very expensive and time-
consuming. The pet market on the other hand, which is being targeted
with BioElectronics’ HealFastTM Therapy line, could very well develop
into an additional large market sector for the Company, although we
believe it is simply too early to make this determination considering the
Company’s limited history with this product line to date.
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BioElectronics Corp. – Sizing the Market Opportunity
Competition
We have seen little real competition for BioElectronics from other
corporate entities that manufacture PEMF systems. Rather, we believe
the Company's biggest “competitor” is over-the-counter pain remedies
such as Tylenol and Motrin, marketed by large multinational
corporations, in addition to traditional pain relief treatments such as
hot/cold compresses, medicated ointments and other over-the-counter
remedies.
Additionally, nutrition, acupuncture/acupressure and homeopathy-
based treatments can also be considered treatment alternatives to the
Company's product offerings, although the efficacy of these treatments
is widely disputed and often doubted by many.
While some form of electromagnetic technology has been used to treat
all types of conditions with varying success for over 50 years, this
technology has mainly been unavailable to the general public. There
have even been remarkable advances in electronics, engineering and
consolidated groundbreaking research and clinical applications of the
most renowned scientists in the emerging field of electrotherapeutics to
support the increasing use and awareness of the benefits of PEMF
therapies in treating a variety of pains, ailments and tissue injuries.
Despite these advances, however, delivery of PEMF treatment remains
mostly limited to large-scale devices and/or high-powered machines
where expensive therapies are often administered in clinical settings
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BioElectronics Corp. – Sizing the Market Opportunity
Nutrition
There are many theories within the medical community relating to the
effectiveness of nutrition modification in order to treat any number
pains and ailments. Certain research has centered on the increased
intake of essential fatty acids, found in cold-water fish, nuts and seeds.
Research has also looked into the reduced intake of saturated fats (meat
and dairy products), elimination of refined foods, sugar, dairy products,
and methylxanthines (coffee and chocolate) and on the increased intake
of fresh fruits and vegetables, proteins and whole grains. There are also
many theories about the use of vitamin supplementation and herb-based
remedies to treat and prevent certain pains. While nutritional intake
and appropriate exercise are unequivocally related to health, the vast
majority of physicians and patients often seek more immediate relief to
pain suffering and injury healing and, therefore, do not consider
nutrition and vitamin supplementation as immediately effective
solutions.
Homeopathy
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BioElectronics Corp. – Sizing the Market Opportunity
Other
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BioElectronics Corp. – Sizing the Market Opportunity
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BioElectronics Corp. – Sizing the Market Opportunity
Alquemie Partners
Analyst and Other Important Disclosures
Carrie Snyder is a co-founder and partner of Alquemie Partners, a strategic financial advisory, business and
research consultancy firm. Prior to founding Alquemie Partners in 2008, Ms. Snyder spent over ten years in
the investment banking industry. During her time in investment banking, Ms. Snyder played a leading role in
multiple M&A transactions as well as private and public debt and equity financing deals.
She has experience working with clients across a wide range industry sectors and has managed all aspects of
the transaction execution process including deal origination, valuation and financial modeling, creation of
offering memorandums, management presentations and related deal documentation, identification of potential
buyers/investors, management road shows, due diligence and internal committee approval processes. She has
advised on multiple M&A transactions totaling over $5.0 billion and on more than $8.0 billion in public and
private debt and equity financings.
Ms. Snyder also worked in equity research where she helped maintain research coverage of 19
communications equipment, telecom and technology companies and initiated coverage of nine new companies.
Her experience in equity research includes analyzing the coverage universe according to corporate strategy and
business plan execution, financial performance and operating metrics, valuation and investment returns,
trading statistics, industry competitiveness and strategic positioning. She was also responsible for making
investment recommendations to institutional investors, including daily briefings to the sales and trading force.
Ms. Snyder began her investment banking career in 1997 at JP Morgan Chase in New York City, and later
moved to Salomon Smith Barney in 2000. In July 2003, she joined Pacific Growth Equities in San Francisco
as part of the equity research team.
She returned to investment banking in 2005 with Wells Fargo Securities and later joined Nollenberger Capital
Partners. Ms. Snyder holds an MBA from Georgetown University, where she served as the President of the
Graduate Student Consulting Group, and a Master of Arts from the George Washington University's Elliott
School of International Affairs. She also served as a Graduate Intern in the U.S. Department of Commerce
and the U.S. Senate. Ms. Snyder conducted her undergraduate studies at the University of California, Davis
and Los Angeles, receiving BA degrees in both Economics and Psychology in addition to a minor in German.
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BioElectronics Corp. – Sizing the Market Opportunity
Alquemie Partners
The coverage analyst uses a relative rating system in which stocks are rated as: BUY, SELL, or HOLD.
Information, opinions, or recommendations contained in this research report are submitted solely for informational
purposes. The information used in statements of fact made has been obtained from sources considered reliable, but we
neither guarantee nor represent their completeness or accuracy. Such information and the opinions expressed are subject
to change without notice. This research report is not intended as an offering or a solicitation of any offer to buy or sell the
securities mentioned or discussed. The firm, its principles, or the assigned analyst may or may not own or trade shares,
options, or warrants of this covered Company. Additionally, the analyst responsible for the production of this report may
or may not own the common stock or warrants in the subject Company or companies. The views expressed in this
research Company report accurately reflect the analyst’s personal views about any or all of the subject securities or issuers
referred to in this Company report, and no part of the analyst’s or the firm’s compensation was, or will be directly or
indirectly related to the specific recommendation or views expressed in this report. Opinions expressed herein reflect the
opinion of Alquemie Partners and are subject to change without notice. We claim no responsibility to update the
information contained in this report. Investors should consider the suitability of any particular investment based on their
ability to accept certain levels of risk, and should not rely solely on this report for information pertaining to the Company
covered. The material in this document is intended for general circulation only and the recommendations contained herein
do not take into account the specific objectives, financial situation, or particular needs of any particular person. Alquemie
Partners reserves the right to consult with this or any other company at any future date. An investor should consult his
investment representative regarding the suitability of this investment and take into account any specific investment
objectives, financial situation, or particular needs before he or she makes a commitment to purchase the shares of this or
any other Company's stock. No part of this document may be reproduced in any manner.
August 2009 54