NEW YORK, NY / ACCESSWIRE / May 31, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has initiated coverage on United Health Products, Inc. (OTC PINK: UEEC).
The report is available here: UEEC Initiation Report.
United Health Products develops, manufactures, and markets patented hemostatic gauze, for the healthcare and wound care sectors. The company's flagship product, Hemostyp, is an all-natural hemostatic agent derived from regenerated oxidized cellulose, which has been shown to quickly control bleeding from open wounds and body cavities. Hemostatic market is a multi-billion-dollar opportunity which is expected to grow at double digits in the near to medium term. UEEC has recently filed an application with the FDA that, if approved, would expand the indications for Hemostyp® to include new opportunities including use in general surgery. This itself would open an additional market opportunity of $15 billion for UEEC. The company also continues to work towards sales distribution advancements in the retail, veterinary, dental, dialysis and military markets. We see United Health Products as a speculative microcap investment option in healthcare sector targeting the multi-billion dollar hemostatic and sealant markets. The company has made considerable progress over the last few years, with revenues growing ~530% YOY in 2016. Going forward in FY17, we expect revenue growth to ramp up significantly aided by new distribution agreements, entry in new markets (veterinary, dialysis, military) and expansion of existing relationships.
Highlights from the report include:
Hemostyp an All-Natural Wound Care Product Targeting a Large Market
UEEC's flagship Hemostyp® Topical Hemostatic Dressing is an all-natural hemostatic agent. Hemostyp® has been shown to produce hemostasis in less than 45 seconds when applied to an open wound. The product has received FDA approval as a Class 1 device designed to absorb exudate/drainage from superficial wounds and help control bleeding, and is sold in prescription and over-the-counter formulations. Hemostatic and sealants market was estimated to $4.4 billion globally in 2016 and is expected to grow at approximately ~9% a year through 2022 to reach ~$7.4 billion.
Expanded FDA 510K Approval Could Open Up a New Large Market
United Health Products has recently taken a significant stride forward on the regulatory front. The company is seeking to expand the indications for its flagship Hemostyp® regenerated cellulose product. The company filed for expanded use indications for Hemostyp® under its current 510(k) application with the FDA. Hemostyp® is already cleared as a Class 1 device, which is indicated for topical wound dressing for temporary control of external surface bleeding.
The amended application seeks to achieve Class 2 clearance, indicated for use for internal procedures for controlling and managing bleeding. If approved, Hemostyp® could be used for expanded applications in surgical settings, opening up a new ~$15 billion market opportunity for the company. UEEC stated it could capture 10% of that market very rapidly. In an announcement describing the amended 510(k) application, UEEC management stated that it expected a response from the FDA within 90-180 days.
New Distribution Agreements and Entry in New Verticals to Provide Fillip to Revenue
UEEC has signed a distribution agreement with Animal Health International and rolled out the initial delivery of orders in December 2016. The veterinary market could be a $50 million annual business for UEEC. The company is working with Fresenius for a new test in 2Q17 and if successful could open up a large dialysis market. UEEC had indicated that it could be $30 million annual business opportunity. Further, the company is also targeting the military market which can again generate an annual turnover of more than $20 million. Besides this, the company aims to expand in the existing dental market and enter into retail as well international markets (where first order is expected in 2Q17). All these, in our view, will significantly boost revenues.
Initiate Coverage with a Price Target of $0.30
We see UEEC as a high risk and high reward play on the multi-billion-dollar hemostatic market which is expected to grow at double digits in the near to medium term. The target of $0.30 assumes successful entry in new markets (dialysis, veterinary, military and international) and further expansion in existing markets. Our valuation does not factor in any 510K expansion approval, which if successful could provide material upside to our estimates. Key risks include delay in rolling out the product in new markets and equity dilution.
Please review important disclosures on our website at www.seethruequity.com.
About United Health Products Inc.
United Health Products Inc. (UEEC) develops, manufactures, and markets patented hemostatic gauze, for the healthcare and wound care sectors. The product, HemoStyp®, is derived from regenerated oxidized cellulose, which is all natural, and designed to absorb exudate/drainage from superficial wounds and helps control bleeding. UEEC is focused on identifying new markets and applications for its products and increasing sales in its current markets (www.Unitedhealthproductsinc.com).
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
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For more information, visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
[email protected]
SOURCE: SeeThruEquity