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United Health Products Has An Absurd Valuation With Only A Me-Too Gauze Product From China

Aug. 27, 2019 10:45 AM ETUnited Health Products, Inc. (UEEC)8 Comments
White Diamond Research profile picture
White Diamond Research


  • United Health Products reached a $400M market valuation on speculative hopes related to its HemoStyp surgical gauze.
  • UEEC’s only product, HemoStyp, is a 17-year-old, cheap commodity gauze made in China with no published data or clinicians supporting it.
  • UEEC’s website discloses claims of pharmaceutical activity of its HemoStyp, which can compromise FDA 510K submission approval.
  • The company has been operating from a PO Box with no staff and no R&D investment for many years.
  • The company suggests a story of a product ready for FDA approval and a big money acquisition, with no factual support.

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We have come across a unique example of extreme market exuberance. United Health Products (OTCPK:UEEC), a little known distributor of a me-too surgical gauze, trading on the Pink Sheets, currently has a more than $350M market cap, all because of speculative news of a big acquisition actively promoted by the company. We believe this is a bubble getting ready to burst.

According to its profile, UEEC “develops, manufactures, and markets patented hemostatic gauze for the healthcare and wound care sectors.” UEEC’s only product is HemoStyp Gauze, which the company describes as "innovative". Our research has found that not to be true, and this type of gauze is actually quite common.

Our evidence shows that HemoStyp has been around for many years before UEEC acquired it and historically has had low sales. UEEC currently sells HemoStyp through retail channels, but its revenue is immaterial, and only generated $25K in revenues for Q219 (from just one customer). Right now, UEEC is attempting to get a Class III FDA 510K approval for HemoStyp. That will allow it to be used in the surgery room. But it will still be the same common, mediocre, gauze it always has been. We don't expect sales to increase much, even if it does get approval for this indication.

HemoStyp Is An Old Gauze Product

HemoStyp is described in UEEC’s recent Q2 2019 10-Q similar to how it has been described in older reports many years ago. It states:

HemoStyp Hemostatic Gauze is a collagen-like natural substance created from chemically treated cellulose. It is an effective hemostatic agent registered with the FDA to help control bleeding from open wounds and body cavities. The HemoStyp hemostatic material contains no chemical additives, thrombin or collagen, and is

This article was written by

White Diamond Research profile picture
We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. We specialize in the technology and healthcare sectors. We have an over 80% success rate, see our reports at whitediamondresearch.com. See the 3rd party verified return on each of our bearish reports over the last 24 months at: https://breakoutpoint.com/as-summary/white-diamond-gvmtg/To inquire about becoming a premium subscriber, send a PM here or email us at research@whitediamondresearch.com.Follow us on twitter @whiteresearch.

Analyst’s Disclosure: I am/we are short UEEC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: https://whitediamondresearch.com/disclaimer/

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Comments (8)

Is there any current information or news on UEEC? United Health? Anything to contribute? Anybody?
For whatever reason, UEEC launched a lawsuit against WD for some of the allegations in this article. The amount of damages requested? $75,000. Clearly, they couldn't be counting on a win--probably they were counting on WD settling to avoid legal fees. I find it chilling that even with the admission that it had a short position, an article writer is subject to harassment. Particularly in light of the catastrophic drop in the SP today. Investors would have been wise to have followed WD's advice and either steered clear of or shorted this stock,.
Wow. Once again, you were totally prescient. Last night they announced another secondary. About an 18% loss overnight!!. Dishonest and/or pump-happy management...BEWARE!! There's a new cop on the block! White Diamond is coming for YOU!!!
I'm curious is anyone would care to speculate as to HOW their market cap got so big? Did most people simply hold onto their shares and never sell them? Are there a lot of paper millionaires out there? How come a few thousand shares TRADED DAILY can affect the share price more or less like a more normal stock, when their are tens of MILLIONS of shares lurking in the shadows?
Crowd Noise Fundamentals profile picture
Congrats on another strong call. Your article is very compelling and apparently right on track as this has traded significantly down 2 straight days. Respect.
Good report with an interesting info about UEEC product. I did not know that it is similar to the other products from China. I am puzzled about author's warning about FDA approval. I assume FDA does not read Seeking Alpha reports. How would they know that manufacturer claims pharmaceutical activity of HemoStyp? Does the FDA regularly check manufacturer's websites for claims contradicting 510K application?
White Diamond Research profile picture

Thanks for bringing that up. In the interest of full disclosure, we have submitted an activist letter to the FDA suggesting that UEEC is going down the wrong regulatory path considering the pharmaceutical activity language on the website. See the letter here:


We previously had sent a letter to the FDA in regards to Helius Medical (HSDT) urging them to reject 510K submission for their PoNS device. The device got rejected by the FDA for the exact same reasons that we noted in our article. See that letter here:

rollo tomassi profile picture
How are you short? Options?
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