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Electrical Stimulation Therapy and E-Qure - A Potential 20x in 18 Months or Less

Thursday, 25 May 2017 07:30 AM

One Equity Stocks, LLC

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NEW YORK, NY / ACCESSWIRE / May 25, 2017 / Since approximately 2009, Negative Pressure Wound Therapy (NWPT) devices have dominated the adjunctive market for wound healing in the United States.

The market for these devices has grown rapidly in the last decade, reaching approximately $1.1 billion in sales in 2015, and is projected to grow to nearly $4 billion by 2025 according to data published in November by Grandview Research.

The reason for this growth? The introduction of disposable, portable, and single-use pressure wound therapy devices. These devices allow for out-patient use, simplifying treatment and lowering costs for the healthcare system. As a byproduct they can improve the incidence of hospital infections.

Large corporate players, like Smith and Nephew PLC (NYSE: SNN), Cardinal Health (NYSE: CAH), Kinetic Concepts Inc, an Acelity Company, and BSN Medical, have dominated this fast-growing space.

Chronic wounds are those that show no signs of healing for at least 90 days. There are more than 6.5 million people in the U.S. with chronic wounds, and due to the aging American population and this market segment is expected to grow by 6-8% per year through 2025.

The largest cause of these wounds is diabetic ulcers. The fastest growing cause is pressure wounds, or bed sores. Old age and debilitation by chronic diseases, confining patients to bed or limited mobility, cause such wounds. Basically, an aging "Baby Boom" population and obesity are driving the chronic wound market.

Without adequate treatment of these chronic wounds, amputation is the end result. There are nearly 200,000 amputations annually in the US, luckily, this number has been declining due to the advances in preventing and treating the severity of these wounds. It is estimated that the US spends nearly $20 billion/yr in healthcare costs associated with treating chronic wounds, making wound management one of the fastest growing healthcare segments.

When a wound becomes classified as a stage 3 or stage 4 chronic wound after 90 days, the patient becomes eligible to receive reimbursement for "Adjunctive Therapies." This means that all the typical wound treatments from traditional wound dressings, antibiotics, and antifungals have been unsuccessful. Negative Pressure Wound Therapy devices have dominated this space.

These devices employ a vacuum dressing to enhance and promote wound healing in chronic and burn wounds. It involves using a sealed wound dressing attached to a pump to create a negative pressure environment around and in the wound area. Applying a continuous vacuum helps increase blood flow to the area and draw out excess fluid from the wound. The procedure can last for several days or months.

Smith and Nephew PLC (SNN) were the first to introduce a single-use product and are the current leaders in the new segment. Reimbursement for a single use averages approximately $100.

Obviously, the companies marketing these devices have and are experiencing consistent, fast revenue growth.

Interestingly, the NIH's Agency for Healthcare Research and Quality (AHRQ) authored guidance citing that "Except for electrical stimulation, there is a paucity of published research to substantiate the effectiveness of adjunctive therapies in healing pressure ulcers." The commentary expressly favors Electrical Stimulation as the most effective Adjunctive Treatment in healing recalcitrant stage 3 and 4 pressure ulcers, or chronic wounds.

Electrical Stimulation therapy uses electrical current to stimulate a number of cellular processes that increase natural healing at the wound cite. Chronic wounds cause a weakness in the body's ability to heal, in part due to a weakened immune system. Electrical Stimulation is intended to boost the wound's electrical and nervous signaling, stimulating the sensory nerves accelerating the body's natural healing capabilities and systems. The NIH guideline states that NWPT is widely used, but there are few trials demonstrating efficacy.

Why have no companies marketed what the NIH says is a far superior treatment, Electrical Stimulation?

We believe one of the significant contributing factors is that the waveform signals that mimic the "Current of Injury" were patented in 2005, until 2021. These patents are owned by E-Qure Corp (OTCQB: EQUR).

EQUR was formed to purchase the intellectual property and to finish the clinical trials necessary to market this potentially superior product to Negative Pressure Wound Treatments. The existence of this intellectual property has kept major corporate players from entering the market. The three main shareholders of E-Qure own nearly 60% of the 22 million shares outstanding. The company has primarily been financed by CEO Ron Weissberg and his management team.

E-Qure Corp has a proprietary Electric Quik Ulcer Remedy (EQUR) bioelectrical stimulation therapy (BST).

As mentioned earlier, Electrical Stimulation Treatment may prove to be one of the most effective for quick, painless and user-friendly healing of chronic, difficult wounds and ulcers.

The device is a small, low-cost electrical stimulus generator, along with soft surface disposable electrodes. The electrodes are placed on the side of the ulcer where they can remain for up to three days. The device is leased for a nominal amount and the electrodes are sold to the provider at approximately $50 per day.

How does the E-Qure BST Device work? The device produces a unique patented waveform signal which mimics the naturally occurring "Current of Injury" and is transmitted through the electrodes to the skin surface around the wound site. The signal enables both the stimulation of the sensory nerves and direct stimulation of the ulcer tissue. The nervous system, which has been impaired by diabetes or other chronic immune system deficiencies, interprets the pulse from the damaged area, that it was unable to read previously, and initiates healing activity in the wound tissue.

The clinical results have been excellent: approximately 85-90% of the chronic wounds studied have full wound closure in an average of 95-100 days, ranging from 10-150 days. Complete pain disappearance in seven days occurred 45% of the time, and another 36% of patients had drastic pain reduction within seven days. The results among the Israeli and Italian trials were consistent.

E-Qure's BST device is already approved in the European Union and Israel and is pending approval in Australia, Canada and several South American countries. The U.S. FDA requires a premarket approval (PMA) for Class III medical devices, which are those that support or sustain human life or are of substantial importance in preventing impairment of human health. The company has received FDA go-ahead to conduct a pivotal, 90 person PMA trial in the US. If all goes well, the Premarket Approval could be complete by the beginning of 2019 and the product on the U.S. market immediately thereafter.

Interestingly, there is already a CMS reimbursement code in the U.S. (probably because the NIH recommends this therapy). The code is E0769 with a reimbursement of $70.00/day with an average amount to the patient of $3,000 over the course of therapy. This can only be used after a wound has not responded to other therapy for 90 days (a "chronic" wound). Gross margins are typical for patent-protected products, at 80 to 90%.

The business model is simple: lease the machines for a nominal amount to hospitals, clinics and physicians to retain control, and sell electrodes for 1, 2 or 3 day use for about $50/day.

The product is approved in Israel and the EU. It is shortly awaiting reimbursement in both areas. Comically, the device and procedure are reimbursed but not approved in the U.S.

The company is negotiating with distributors and expects to finalize a deal by the end of the third quarter for the U.S. market. The Israeli and EU launches, meanwhile, may have a significant impact on the share price.

The company is preparing to initiate their U.S.-based clinical study. The study will include 90 patients randomized to either BST or a sham device, meaning that this is not a long or complicated trial to run. The study will be complete within 12 to 15 months, but interest will build in front of this important catalyst.

At $2-3 million in market value, EQUR isn't pricing in much success, however, with an excellent intellectual property position, strong clinical results and a potentially superior technology to the standard of care, approval in major global markets, we don't expect this price to last long. With their US study up and running, and inferior competitors already doing over a billion in sales with NWPT devices, E-Qure is on the way to broader market recognition. A move to a $50 million market capitalization would put the price per share north of $2, a 20x return from where it trades today.

About One Equity Stocks

One Equity Stocks is a leading provider of research on publicly traded emerging growth companies. Our team is comprised of sophisticated financial professionals that strive to find the companies and management teams that will outperform the market and deliver investment returns to our subscribers. We are not a licensed broker dealer and do not publish investment advice and remind readers that investing involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for profit business and is usually compensated for coverage of issuers. In the case of EQUR, we have been compensated nine thousand dollars for advisory, marketing and business development services. An affiliate of One Equity Stocks is long EQUR.

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SOURCE: One Equity Stocks, LLC

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