SANUWAVE Health May Be In Its Best Operating Position Ever After Leveraging Recent Acquisition Milestones
Soulstring Media Group points to record-setting Q3 revenues as a starting point for accelerating growth. Transformative acquisitions pave the way for robust 2021
Miami Beach, Florida--(Newsfile Corp. - February 11, 2021) - SANUWAVE Health (OTCQB: SNWV) completed a transformational, catalyst filled 2020. Now, as the company enters the new year, analysts think that they can leverage those milestones to deliver the best operating results in its history. Investors are on board, pushing shares in the company higher by more than 16% in the past week. Some think that the move could be the beginning of a more sustained rally. Here's why:
Last year, SANUWAVE seized on a golden opportunity to acquire an additional best-in-class diabetic wound-care device- UltraMIST®. The great news is that UltraMIST® complements its own dermaPACE® shockwave device by delivering low-frequency ultrasound to a treatment site using a non-contact fluid (ex., saline). The low energy ultrasound-generated mist used to promote wound healing, combined with dermaPACE, could be the knockout punch that leaves SANUWAVE standing as the leader in front line treatment for chronic diabetic would care. Additional factors weigh in heavily to support the optimism.
Before its acquisition, UltraMIST® proved itself by generating more than $15 million in revenues in 2019. And its strength in the market appears to be gaining steam. Since being taken on by SANUWAVE, revenues at the company increased substantially, with Q3 totals reaching $1,966,896. That represents an 895% gain over the same period last year when revenues came in at only $197,640. Giving a nod to UltraMIST®, SANUWAVE gave credit for the surge to its acquisition of Celularity assets, licensing fees, and international distribution fees.
Sentiment outside of SNWV is bullish. Analysts at Lake Street Capital have modeled for a continued spike in revenues, estimating that combined revenues this year will reach $25 million. That call is supported by an increase in reimbursement coverage's, an expansion into international markets, and a 100 person sales team to offer both UltraMIST® and dermaPACE® as a tandem package. Each, though independently valuable, will contribute toward the same revenue-generating objective.
Thus, while 2020 may have been a transformational period, 2021 could be the year for those milestones reached to get monetized. Also, an expected uplist to the NASDAQ market could help ignite even more interest. According to SANUWAVE, that move could be imminent.
The tangible assets acquired are indeed a game-changer for SANUWAVE. As part of the UltraMIST® purchase, SANUWAVE secured licensing to two potentially lucrative biologics, a trained sales force and reimbursement team, and access to a client register that positions the company to accelerate growth for each of its devices. And with at least 1000 combined client accounts as of its last update, the sales team is well-positioned to maximize opportunities to sell both devices to treatment providers looking to extend best-in-class care to its patients. Recently announced reimbursement increases and acceptance could also help providers add the dual treatment to their arsenal.
And with the company taking quick advantage of increased accessibility to providers, better economies of scale, and distribution and logistics efficiencies, both SANUWAVE and patients are set to benefit. Also, chronic diabetic wound sufferers and providers outside of the US are expected to benefit as well. Thus, the stage is well set to capitalize on both US and international market opportunities.
A Global Market Needs Global Solutions
A big part of the SANUWAVE story may be getting less recognition than deserved. Specifically, it should be noted that the record-setting revenue growth came from the US markets alone. Now, SANUWAVE believes that its acquisition package opens the door to substantial market opportunities around the world. Both Mexico and Brazil are in the cross-hairs.
First, COFEPRIS approval in Mexico to market its dermaPACE® treatment is a valuable asset. Not only does it extend the market for patients seeking effective treatment through dermaPACE®, but it also provides a pathway for UltraMIST® to earn the same approvals. If that does happen, SNWV could be a best-in-market provider for chronic wound-care solutions and be positioned to exploit these tremendous market opportunities through Joint Venture and partnership agreements. Such a structure could maximize potential and, at the same time, limit capital expense and share dilution. SANUWAVE has expressed interest in that type of business model.
Brazil may also deliver substantial revenues going forward in a similar process. As it did in Mexico, dermaPACE® received ANVISA approval for distribution in Brazil. And while these markets may not have contributed mightily to revenues just yet, expectations are for that to change. Having two best-in-class treatment devices can make that happen.
The addition of UltraMIST® may drive the collaborative interest. And while the Mexican and Brazilian markets are respectable in their own right, these countries could be the first of many expansions into the global market. Diabetes is a chronic problem facing populations in massive markets, including Japan, the UK, and China. Thus, expanding into those markets could be lucrative. That strategy may already be in progress.
And while the pieces are in place for growth, the kicker to maximize all its efforts is the expected uplisting to a more senior NASDAQ exchange. Updates from the company show that the filing process is near complete. And its success opens the door to attracting institutional investors, additional analyst coverage, and access to better terms for capital if needed. Updates about its progress on that front could come at any time. So could acceptance.
Reimbursement And Market Penetration
SANUWAVE has made no secret that maximizing its experienced reimbursement team's strength will be a critical factor in driving revenues. CEO Kevin Richardson noted in a 2020 presentation that its value could help boost revenues up to $100 million within three years, clearly revealing his optimism in his team's abilities. Thus, the December update that its reimbursement team successfully increased payments for UltraMIST® and dermaPACE® should have earned greater investor attention.
Two things were revealed in that release. First, the products are in demand. And, second, the value of these products from a treatment perspective is worth more money from insurers. Remember, insurers don't want to pay out more dollars for anything except for products that can save them more money down the road. The increase in reimbursement rates is a telling sign that patients want this treatment.
Further, SANUWAVE's experienced reimbursement team does far more than negotiating a price. They also help expand overall device coverage for consumers, solve issues that arise from the Patient Protection and Affordable Care Acts, and increase pressure on both government and public payers to compensate the company fairly for its therapeutic value, especially in instances where medical treatments exceed standards.
Combing the sum of its portfolio and assets, momentum is on SANUWAVE's side.
High Targets, Better Products
Undoubtedly, SANUWAVE has positioned itself to accelerate growth from a product portfolio that can serve substantial markets with best-in-class results. And because dermaPACE® and UltraMIST® are FDA-approved to treat diabetic wounds, the major hurdles are already completed. Now, SANUWAVE only needs to execute its plan to make these useful, pain-free treatment devices more available. And Q3 revenues showed they are meeting that objective.
Furthermore, investors may have only received the first taste of revenue growth. With the company expecting to generate upwards of $25 million in 2021 and with its sales force now fully trained to represent at least two front-line treatment devices, revenues may increase faster than expected. In fact, Q3 results show that growth is already accelerating by cross-selling into more than a thousand of their existing customer accounts. That is great news.
The 10K report may place an exclamation point on that trend.
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