BioSig Technologies Inc (OTCMKTS:BSGM) is trading 30% higher right now than it was at the turn of the year, and the company looks set to gain further strength as we head into the start of this week. The gains have come primarily on expectations that 2017 will be a pivotal year for BioSig, with growth primarily rooted in the long awaited commercialization of its lead cardiovascular asset in the US and Europe.
The upside momentum has picked up some pace over the last couple of days, as management has put out a letter to shareholders detailing the forward strategy, and putting some solid time frames on what previously have just been speculative expectations. Ahead of this one catching the attention of wider markets, then, let’s take a look at what management has outlined for the near-term future.
The technology in question is called PURE EP, and as mentioned, it is designed as a cardiovascular device. In order to understand what it does, it is first important to understand a little bit about the market. When someone has a heart attack, they go into cardiac arrest, and this cardiac arrest will generally result in a certain degree of scarring on the heart. In days gone by, cardiac arrest generally meant death, so this scarring wasn’t too much of an issue. These days, however, many people survive cardiac arrest, and as such, have to go on living with scarring on the heart. This scarring causes what’s called arrhythmia. Arrhythmia is when the heart beats out of sync, and it can result in a whole host of cardiovascular related issues. In order to remove the scarring, physicians undertake what’s called ablation, basically the buffing of this scar tissue from the heart muscle.
In order to aid this process, physicians use what’s called electrophysiology to monitor electrical impulses given out by the heart. However, for various reasons, these EP monitors are pretty inaccurate, and make precise ablation difficult. Biosig’s PURE EP is basically an upgraded version of the current monitors, designed to improve accuracy of ablation, and in turn, improve patient outcomes.
The technology is currently undergoing its seventh clinical trial to demonstrate comparability to current standard of care, and that is all it will need in order to pick up an approval from the FDA (in other words, it doesn’t need to show that it is better than current EP systems, only as good.)
In the latest letter to shareholders, this technology was the focus of the discussion.
Basically, management outlined the growing market for EP technologies – the market is currently worth around $4 billion and expected to grow to just shy of $6 billion by 2020 – and, this is what we’re most interested in, gave us a date to watch as far as a potential approval is concerned. The submission required for these sorts of medical devices is called FDA 510 (k), and they generally take about 1 to 2 months for the agency to review. As such, and as management highlighted, the company expects to submit its application 90 days before it intends to start commercialization.
In our previous coverage of this one, we speculated that the submission would come some point during late first-quarter this year. That coverage was back in July, 2016. As it turns out, we were a few weeks off. Management expects to apply for commercialization during late second quarter, which suggests that the product should hit shelves at some point during late third quarter or early fourth quarter 2017.
We don’t expect approval to be too much of a long shot on this technology; there is plenty of evidence pointing towards efficacy and comparability to current standard of care. The only drawback right now, in our eyes, is the potential for dilution as the company ramps up towards a marketing strategy execution. Cash on hand at last count (September 30, 2016) came in at little over $150,000, and that is going to be nowhere near enough to underpin an effective sales operation.
The potential for a dilutive raise aside, however, this one is coming to an inflection point, and could really start to run if things go its way over the coming few quarters.
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Disclosure: We have no position in BSGM and have not been compensated for this article.