Yesterday I posted the first of a two part interview with Joseph Noel, a spokesman for BioElectronics Corporation (OTC:BIEL). We took an interest in BIEL because the company appears poised for continued strong revenue growth and as you can see in our exclusive BioMedReports FDA Calendar, they have not one, but two applications with the FDA for 510(k) marketing clearance. In addition, we learned that the company is getting ready to file at least two additional FDA applications.
Here is the second part of that interview:
The company recently announced a new Chairman. What can you tell us about that development?
Noel: Rick Anderson, who is a full professor at the Fuqua School, one of the top business school, as part of the Duke University. He had been a board member, and he came on board to be Chairman of the Board. He's got significant FDA consulting experience, a very experienced market researcher, so he's been instrumental in helping guide the management team toward these clinical studies and the filing for indications.
As you are looking at obviously expanding the market for these products, you've got several applications, like you said, with the FDA, you've got worldwide sales, etc.. Are there any developments, or anything you can talk about as far as the preparation for hitting the marketplace with this products, or partnerships, or anything like that?
Noel: Well, we're a small company, so we have distributors around the world. I shouldn't say around the world. We have several distributors in various companies. Canada has been the most successful thus far. We have very big hopes for Italy and Northern Europe, where we have two very aggressive distributors.
In the US, however, all we do is, you know, we can't hire a sales force to go market to plastic surgeons for blepharoplasty, which is eyelid surgery, that makes no sense. And of course, you can't market off-label, so we haven't done basically anything in the States. In the States, however, we have had conversations with manufacturers and distributors of feminine hygiene products, who have experienced significant interest in a delayed menstrual pain relief products, but they're all preliminary discussions. They say, "Great, let us know what happens with the FDA, because we're all interested."
For general plastic surgery, we've got some other avenues to pursue, but, again, we believe that the big market for this is a treatment for musculoskeletal complaints - back pain, knee pain, things like that. The market in Canada is actually pretty incredible. The distributor has learned that the primary target market is elderly women with chronic pain, and we think that the market in the US for that is very significant. We can develop that market ourselves, and put it on the store shelves. I'm assuming we’d get over-the-counter clearance, which I think we will. Probably a more likely avenue, is we'll pick a major distributor of drug store, on-the-shelf products to help us out.
Great, let's see, is there anything else that you might want the investment community to be aware of, as far as Bioelectronics?
Noel: We pretty much covered it. It's a group of people who've developed what we think is a revolutionary technology. We think the timing is perfect, considering that there's a very high likelihood that the FDA is going to make drugstores pull extra strength Tylenol off the market. I think that’s going to speak volumes about the safety of that particular drug. FDA is saying “Acetaminophen is not candy.” Don't pop a couple in the morning, maybe you take a Nyquil at night, have a couple of cocktails, and then get up in the morning and take some more extra strength Tylenol because your back hurts. That has a negative affect on your liver, it's just a fact, and we think that that will help a lot of people start saying, "Well, maybe I just don't want to take a pill. What else can I use?" We think we've got a great alternative for that.
One thing that I missed was pricing, how expensive are these devices?
Noel: They retail for $39.95 in Canada. They're not available over the counter in the United States, but we think it's a similar type of price, and the pricing in Europe is roughly equivalent. We recently moved all of our manufacturing to China. We gained a significant improvement in quality by doing that, and we significantly lowered our costs, so our gross margins on our costs of goods sold, versus retail level, is about seventy-five percent gross margin.
Where were you producing before, here in the States?
Noel: We actually produced in the States, and we had some problems with the epoxies that were used, the connections to the power unit, and frankly, that set the company back. A lot of physicians and plastic surgeons wanted to use the product, but they're not going to mess around with something that's not one hundred percent reliable. The difference is that the new products are bullet-proof. You pull the pin out, it lasts for at least thirty days. Women can use it for their menstrual cycle for three periods. People in Canada are using them for forty-five days for back pain; extremely reliable product right now.
It’s important to note that the process of treating soft tissue injury has advanced very little in the medical field. The process that has been in place and pretty much standard operating procedure that has been in place for over a thousand years, really. When someone gets a cut, a bad bruise or a sprain doctors typically clean the affected area, wrap it in some type of bandage in an attempt to prevent infection and then immobilize the injured part of the body. Meanwhile, the patient endures the pain and waits while his body recovers and heals. What this company is attempting to do in order to address and change this process makes this investment quite interesting. Purely from a financial standpoint, the multiple applications for the product are multitudinous yet certainly as numerable as they are potentially profitable.
As with many other biomedical companies, a lot is riding on the upcoming approvals and future marketing clearances of these devices by the FDA, but the odds for positive nods and continued market growth look very favorable. In addition, the media attention and customer reviews of the product (see video on left for one recent example) will likely continue to propel adoption of the technology by the general public.
Biotech investors interested in seeing more details about these stories and accessing the complete database of clinical trials and upcoming FDA decisions can access that information here.
Disclosure: Long BIEL