SANUWAVE (SNWV) Stock: It’s dermaPACE® Device, A Potential Blockbuster In The Making


As investors, from time to time, we see a ticker that has risen dramatically over the years and think, “I wish I would have found that one a while back.” These companies come up with blockbuster products, often turning thousandaires into millionaires. SANUWAVE (OTC: SNWV) has the potential to be one of these companies.

Trading with a market cap of just under $30 million, SNWV is on the cusp of owning the next blockbuster in the diabetes care market. Focused on the treatment of diabetic foot ulcers, also known as DFUs, the company is embarking on an industry with incredible market potential.

Moreover, management is no stranger to innovations in the wound healing industry. In fact, the CEO and Chairman of the Board at SANUWAVE , Kevin Richardson has been down this path in the past, previously as part of a team creating a blockbuster product that led to an $11.5 billion take-private transaction.

What Is SNWV

SANUWAVE is a biotechnology company that is emerging as a leader in the treatment of diabetic foot ulcers. Through the use of high-energy, focused shock wave technology, the company helps to restore the body’s normal healing processes.

The company’s big claim to fame is its proprietary, patented Pulsed Acoustic Cellular Expression (PACE®) technology. This technology emits high-energy, acoustic shock waves that restore the body’s normal healing process.

Essentially, the technology activates biologic signaling. This leads to tissue repair and regeneration as well as blood vessel growth, revascularization, and microcirculatory enhancement.

Currently, the company has two devices that utilize its PACE technology. These devices include:

  • dermaPACE® – dermaPace®, the company’s flagship device, is cleared by the FDA for use in the US for the treatment of DFUs,  is a CE Marked device for use in Europe for a number of indications and globally has been expanding its presence as well.
  • orthoPace® – Is another CE Marked device that takes advantage of the company’s proprietary PACE technology. The device has been approved for orthopedic and musculoskeletal indications in Europe.

Moreover, the company’s technology reaches beyond the medical field. In fact, its shock wave technology is currently patented to be used in energy, water, food, and industrial effluent markets. These markets are targets for the company’s efforts toward licensing and potential partnership relationships.

A Path Well Known by Kevin Richardson

Kevin A. Richardson II is the CEO at SNWV, and to be quite honest, he’s the perfect leader for the job. Mr. Richardson previously held a position as partner at Blum Capital, the private owner of Kinetic Concepts “KCI” at the time.

Kinetic Concepts had launched a product that was branded as “The Vac.” This product was centered on Negative Pressure Wound Therapy (NPWT). Once approved, KCI quickly grew its position in the wound care market, building a book of more than $1 billion in revenue before being taken private for approximately $11.5 billion.

Today, Mr. Richardson leads the groundbreaking efforts at SANUWAVE, a company whose core product is focused on an area that he knows very well, thanks to his influential position through the growth of The Vac.

The Market Potential Is Hard To Ignore

Any time we look at an investment, we like to take a look at the market and the potential value that the company could get its hands on. In the case of SNWV, the market potential is difficult to ignore.

First and foremost, let’s chat about the current standard of care. The standard DFU care is for patients to go to the doctor to have the wound cleaned and re-bandaged. Unfortunately, this simply doesn’t work most of the time as it doesn’t address the issues that are causing the DFUs to persist.

SANUWAVE’s technology provides a solution by triggering the body’s natural healing process. In doing so, the DFU is actually treated and starts to undergo a healing process. This helps to improve the quality of life for the patient and greatly extends the lifespan of patients.

The truth of the matter is that many DFUs end in amputation, a devastating and significantly impactful outcome. Unfortunately, diabetic patients also see a high morbidity rate in the few years immediately following amputation. In fact, 65% of DFU patients will pass away within 5 years of amputation.

With that said, there’s a clear market need for the dermaPACE® product that SNWV is offering. The question now is how big is that market? With 1.9 million new cases in the United States alone each year, it’s a massive one. Currently, it is estimated that by the year 2024, the diabetic foot ulcer and pressure ulcer market will reach a value of $4.9 billion.

Considering the sheer size of the market, and the limited treatment options that are available in the space, SNWV has the potential to acquire a large chunk and quite possibly dominate the wound healing market.

Recent Updates

Recently, SANUWAVE sent a letter out to its stakeholders (Click here to download a PDF copy of the letter). Reading the letter made it clear that SANUWAVE is well on its way to becoming a key player in the DFU treatment market.

In the letter, SNWV pointed to various milestones that it had achieved in the past year. Most importantly, the company:

  • Achieved record-breaking revenue;
  • Hired Shri Parikh as the President of its Healthcare Unit;
  • Published the reimbursement tracking code for the company’s procedure;
  • Had trial results from a 336 patient trial published in the Journal of Wound Care;
  • Signed a partnership with Premier Shockwave and began shipping dermaPACE® Systems to the partner;
  • Closed a deal with NFS to help finance the rollout of equipment, setting the stage for rapid expansion in 2019; and
  • Added 15 new countries through partnerships, far exceeding the goal of 4 country additions.

Considering the strong success experienced in 2018, SNWV has set the stage for impressive growth this year with the announcement of aggressive goals. These goals include:

  • Placements of dermaPACE® Systems. The company is shooting for the placement of 100 devices throughout the year. This starts with 15 by the end of Q1, 35 by Q2, 65 by Q3 and of course, 100 device placements by the end of Q4.
  • The company also plans to certify between four and five professionals per placed system.
  • The company will be working aggressively to obtain insurance reimbursement coverage. In fact, SANUWAVE said that it would be targeting six states in the beginning, with the goal of reaching 10 million covered lives by the end of Q4.
  • The company intends to continue its clinical work. At the moment, there are four clinical initiatives around the world. The company expects that it will launch between two and three studies in the United States to support the product rollout.
  • Finally, the company will continue working internationally to expand the reach of its treatment. SNWV said that it expects another record shipment year, doubling shipments reported in 2018.

The Key Takeaway for Investors

The key takeaway here is a simple one. When we talk about SANUWAVE, we’re talking about a company that has a product, dermaPACE® that has already been cleared by the FDA. Moreover, it is a product that there is a real need for in the diabetes care market. With DFUs often leading to amputations and a high morbidity rate thereafter, the diabetes care market is in need of a solution, and dermaPACE® has the potential to fill that void well.

With their sights set on a market with incredible potential, a product that fills a void, and a management team that, for lack of better words, has been there and done that, it’s hard to argue the potential for growth out of SNWV!

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