FREDERICK, Md., May 22 /PRNewswire-FirstCall/ -- Andrew Whelan, President and CEO of BioElectronics Corporation , the developer of ActiPatch, an FDA-cleared, drug-free anti-inflammatory patch with an embedded battery operated microchip that delivers pulsed electromagnetic therapy, today issued the following summary of its recent investor conference call, which was held in order to update investors on the substantial revenue ramp being realized by the company. This revenue growth, which is being generated by an expanding international distribution base and increased acceptance of ActiPatch within the US plastic surgery market, has resulted recent profitability on a monthly basis and is expected to continue throughout 2008 and into 2009.
The following is a summary of Andrew Whelan's comments during the conference call:
At BioElectronics we have recently completed a series of significant changes that are beginning to produce meaningful growth at the company. Over the past few quarters we have substantially changed the management team, introduced a significant number of new products, meaningfully altered our manufacturing methodology and almost completely overhauled our distribution strategy.
Sales Management Additions -- In the last half of 2007 and into 2008 we continued to fine tune our management team. The most significant additions were senior sales personnel to target both North America and Western Europe. We are very happy to have these two new senior sales executives onboard and we are already starting to see strong results from their efforts. We now have the right sales team in place to move us forward in 2008.
Manufacturing -- During 2007 we moved the bulk of our manufacturing to China, which has significantly reduced our costs. Due to this manufacturing change we are now able to produce ActiPatch with a 70%+ gross margin. These margins put us well in line with the industry norms for cost structures for both pharmaceutical and medical device companies and have allowed us to achieve profitability much sooner than if we had left all of our manufacturing within the United States.
Increased User Acceptance of ActiPatch -- Over the past few quarters we have seen significantly increased user acceptance of ActiPatch. Much of this effort was achieved through the hard work of our field sales personnel and the distributors who have done a lot of footwork in the field. It has been a lot of basic blocking and tackling -- going out to see physicians and surgeons to explain the benefits of the product and convincing them to take that initial step to try it on the first patient. When these physicians have taken that step most have become strong believers in the technology. As one physician or surgeon started using the product they start telling others about the benefits. This same momentum is occurring relative to the patients on which ActiPatch was used. These patients have told other candidates for plastic surgery who then request that their surgeon try ActiPatch on them. This word- of-mouth process is meaningfully contributing to our success. We are pleased about this momentum and we see it continuing through the end of the year and well into 2009.
Product Line Enhancements -- Over the past few months BioElectronics has introduced a host of new products to the market. These include not only updates and enhancements to the plastic surgery oriented line, but we have also released several new products targeted at the sports injury and general soft tissue injury market for use outside of the United States where we already have a significant level of over-the-counter approval. We believe we have right product line in order to address a wide range of plastic surgery, general surgery and soft tissue injury related markets.
While we have changed many things internally within BioElectronics -- we have developed new and exciting products, hired additional sales staff that has resulted in significantly more user acceptance within the plastic surgery market -- these developments pale in comparison to what is happening internationally. Below is a summary of the current state of our international distribution:
First of all, we believe it is important to point out to our investors that we have taken considerable care in selecting our international distribution partners. These partners have substantial contacts in the countries where they do business and all are established operators. Most importantly, however, is that all of these partners have a lot on the line with BioElectronics and real money in the balance. We have been careful not to sign any international distributor that could not afford to carry our products and to purchase inventory in advance. We believe this should allow us to distribute our products into these countries with only a minimal amount of our own working capital at risk. We believe this is the best methodology to follow and it certainly appears it is one that is starting to pay exciting dividends for the company.
Canada -- As many of our investors know, BioElectronics received full Health Canada certification for muscular skeletal complaints, which allows us to market our products over the counter throughout Canada. We feel this is a very exciting development for BioElectronics and we took advantage of this development by signing a deal with one of the leading distributors of healthcare products in Canada, Locin Industries Ltd. We announced last week that Locin will be placing many of our products in stores across Canada this summer. We are happy to say the first shipment, of what we hope to be many shipments, has already left our loading dock and is currently on the way to Canada.
Italy -- We also recently announced that we had received a major order from our Italian distributor, TSS medical. This distributor is already seeing a considerable amount of success and has recently placed a second order. We are currently in discussions for this distributor to expand well beyond Italy and have already awarded them Switzerland and it is very likely they will also be awarded additional Western European countries. We view TSS Medical as one of the most aggressive distributors. They are already selling a lot of our product and we expect more results to be produced soon.
Korea -- Our Korean distributor is doing almost equally as well as our Italian partner. Since launching distribution only in February of this year they are already selling thousands of units. The bulk of the products are going directly to hospitals, which are quickly embracing the technology and standard care for surgical recovery. We are currently in discussions with the US military in Korea, the Korean military for expanded use of the product and the Korean Olympic team. Incredibly enough, via this distributor, we have been able to ship some product into the US military in Korea, a feat we have yet to manage domestically.
Denmark -- We also recently received an order from our Danish distributor -- It is a small country, but we have been impressed with the results they have been able to achieve.
India -- We are very pleased to announce that we have started receiving orders from India, which we believe will be a significant market for the company. Our partner in India is the fourth largest pharmaceutical distribution company, Nicholas Piramal India. This is a very recent contract and we plan on being back to our investors with some additional information relating to this exciting development. We believe the Indian market could ultimately develop into one of our largest opportunities.
Upcoming and Expected Agreements -- We believe we are very close to signing agreements in China, Taiwan and Hong Kong and other countries in the Middle East where we are currently not yet doing business. Additionally, we are working on an important agreement in Japan, which we believe will be a very strong market for us in 2009.
Revenue Growth Expectations -- With an organization that is realigned to meet the growth challenges ahead, an enhanced product line, significantly increased user acceptance of ActiPatch and a booming international distribution channel, we are expecting significant revenue growth for the rest of 2008 and into 2009.
While it would be inappropriate to comment specifically on the first quarter first revenue results until we make a public announcement, we do believe it is appropriate to give our investors some information relating to the strong level of revenue growth we are experiencing. For example, during the month of April we produced more revenue than in the entire first quarter. We are expecting sales in May to outpace those of April and June to outpace May. Additionally, based on our current and expected order backlogs, it appears we will continue to ramp sales each month moving forward through 2008.
For the past couple of years as we developed our product line and our distribution channels we were faced with the normal issues that face most development stage companies -- product development, sales force organization, market acceptance, etc. -- these problems have largely evaporated. We are currently facing a new set of problems, which are the kind of problems that most companies like to have at this stage of development -- meeting the growing demand. Meeting this developing demand presents a different set of challenges for the company, but we believe we are prepared to meet these challenges.
For all of us at BioElectronics, the company is much more than about simply expanding sales and producing profits, although of course this is our major goal, but it is also about bringing a revolutionary technology to the market that we believe truly reduces pain and suffering for many people. While much of our success to date has been related to plastic surgery recovery, we have seen this quickly change with many other markets now also starting to aggressively expand. Our goal over the next few years is to expand on this growth and turn ActiPatch into a standard product that is used for almost all soft tissue injuries.
While this is a big goal we think it is one that is achievable. We believe our products are very attractive alternatives to the current therapies that are on the market today -- aspirin, Tylenol and Ibuprofen are simply not always effective and there certainly are side effects with these medications. As most everyone knows, medications such as Vioxx and Celebrex been removed from the market, except in very limited cases. These drugs, which were initially billed as virtual miracle cures turned out to be anything but miracles and, of course, the heavy-duty drugs such as Vicodin, are simply not an alternative for the vast majority of people.
We believe this situation leaves us with a huge hole in the healthcare industry relating to pain relief. We sincerely believe that ActiPatch can fill that hole and fit somewhere between the use of aspirin, Tylenol and Ibuprofen and the heavy-duty drugs that very few people should be taking. We believe we are already achieving this goal outside of the United States and as we do additional clinical trials in the United States we hope to eventually also achieve this domestically.
Price of BioElectronics Shares -- It is difficult, of course, for us to directly comment on the valuation of our stock. We believe the current stock price is based on a lot of old information. It has taken a while for BioElectronics to get off the ground relative to sales and the sales ramp is in fact happening very significantly at the current moment. We simply cannot imagine the stock price staying anywhere near the current levels as the information that we provided today moves in to the general shareholder base. We certainly believe the current stock price is significantly undervalued relative to recent developments, the revenue ramp we are experiencing and the fact we have achieved profitability a monthly basis, not to mention the fact that we fully expect to be even more profitable as our international distribution, our penetration of the domestic plastic surgery market, and our revenues continue to expand.
We believe 2008 will be a year of exciting growth for the organization as we move into new markets with an enhanced product offering and meaningfully enhanced distribution. We look forward to continuing and expanding our relationship with our shareholders as this management team and all of the employees of BioElectronics work to increase shareholder value during the rest of 2008 and beyond.
About BioElectronics Corporation
BioElectronics Corporation is the maker of the ActiPatch(TM). ActiPatch is a drug-free anti-inflammatory patch with an embedded battery operated microchip that delivers weeks of continuous pulsed therapy for about a dollar a day. The unique ActiPatch delivery system, using patented technology, provides a cost-effective patient friendly method to reduce soft tissue pain and swelling. ActiPatch is approved by Health Canada for the relief of pain in musculoskeletal complaints. The US government's Food and Drug Administration (FDA) has cleared the use of the product for reducing edema (swelling) following blepharoplasty and the European Union has approved the product as a class II pulsed electromagnetic medical device as have numerous other international regulatory agencies. Information on ActiPatch and BioElectronics Corporation is available at the following websites:
Safe Harbor Statement
This news release contains forward-looking statements related to future growth and earnings opportunities. Such statements are based upon certain assumptions and assessments made by management in light of current conditions, expected future developments and other factors it believes to be appropriate. Actual results may differ as a result of factors over which the company has no control.
CONTACT: Media: Patricia Baker of The Big Picture Agency LLC,
+1-413-623-0950, ext. 221, pbaker@bigpictureagency.com; or Investor
Relations: Joe Noel of Emerging Growth Research LLP, +1-925-922-2560,
jnoel@emerginggrow.com, both for BioElectronics Corporation
Web site: http://www.bioelectronicscorp.com/
