It has been a while since we reviewed Innovus Pharmaceuticals Inc (OTCMKTS:INNV).
During our last review of the company – which can be accessed here – their share was trading at around $.1 thus their market capitalization stood just shy of $15 million.
Things have changed since then.
The company is currently trading at $.1585, raising their market capitalization by over 50% to their current value of $26 million. Furthermore, the company’s traded volumes have also risen with over 7 million shares being traded on some days and an average of about 1 million shares traded daily.
The above price action can be reviewed in the chart below:
The over 50% increase in the company’s share price has not only had their shareholders dancing to the bank but also brought to light (market) the value proposition the company has been selling. We decided to take a closer look at Innovus Pharmaceuticals Inc in a bid to understand this value proposition as well as assess its feasibility.
INNV: Then and Now
Before going into the intricacies, let us have a brief overview of INNV for the sake of first-time readers.
Innovus Pharmaceuticals Inc was founded back in 1959. Its founder, Dr. Bassam Damaj envisioned a conglomerate within the medical sector and drove the company towards a number of acquisitions. The company was then and still is, headquartered in San Diego, California.
However, the company morphed over time and ended up venturing into the health sciences field. Currently, they serve as emerging leaders within the OTC markets, dealing mainly in health and vitality consumer products for men and women. Their lead products include Zestra and EjectDelay – meant to boost female arousal and mitigate premature ejaculation for women and men respectively.
The company’s current mission involves the licensing, acquisition and development of health products for consumers (for home treatment) with the outlook that people can over time lead healthier lives by taking care of themselves.
The Recent Past
The recent past has seen Innovus benefit from approval of their drugs for commercial sale in almost all quarters.
This begun back in November when one of the company’s partners, Bio Task, received approval for its arousal drug – Zestra® – from the National Pharmaceutical Regulatory Agency (“NPRA”) in Malaysia.
The drug which has been licensed for sale in over 37 other countries would now be sold within Malaysia to the benefit of Bio Task. However, courtesy of a sales and distribution agreement between INNV and Bio Task, the deal would also see Innovus Inc grow in revenues courtesy of the same.
At the beginning of January, the company announced that it had received FDA approval for the UriVarx® test strips. These strips test for urinary tract infections and provide results within two minutes of testing. The strips which were meant to be complements to the UriVarx® supplement would see the company benefit from cross-selling of the drugs to their current clients as well as grow their client base from the same.
This was still not the end for them.
A few days later, the company’s hemorrhoid drug, Xyralid™ received approval from Canada. Approval of the drug, which acts as a potent anesthetic cream for people suffering from hemorrhoids, has opened up the company to a whole new market – one with over 36 million people. With such a population size, the company will ably cross-sell some or their drugs to this population, and through adequate branding, they may soon be the key players in both the health science field within Canada.
This was shortly preceded by a deal that would see them commercially sell UriVarx® to the Canadian market through an agreement with Acerus Pharmaceuticals. According to the company, nearly 20% of Canadians have overactive bladder symptoms, signifying a market size of over 6 million people. This strategic decision will go a long way in ensuring that INNV is continually providing amicable solutions to its market as well as always in the money.
Finally, the deal will see them receive an upfront amount of CAD$1.65 million in sales milestones.
Their most recent announcement came three days ago.
The company is working at launching online stores with Amazon, Walmart, eBay, and Wish. This is in a bid to boost their online presence which currently has over 2.5 million people via the Beyond Human® platform.
The company expects a boost in their revenues and cash flows going forward courtesy of this strategic decision. First, they will be working at growing their client base followed by their profits and cash flows. Furthermore, these will serve as platforms for their growth within the global space as they seek to benefit from globalization going forward.
This foresight has been underscored by their CEO who stated:
“We are already seeing a significant increase in our month over month sales from the online stores and we currently expect the online sales to be a growing percentage of our revenues in the very near future.”
With such an outlook, the company will soon be both profitable and cash flow positive. Presently, their loss position is attributable to the high operating expenses of over $2.9 million as compared to their revenues of $2.2 million (3Q2017). Given, however, that these costs have been falling over time, it will not be long before INNV is swimming in currency courtesy of payoffs from their bets.
INNV is already reaping the benefits of their smart bets. With this in mind, the company’s fortunes will soon be paying off regularly and with globalization to accrete them. As such, we remain bullish about INNV as they ready themselves for a liquid future.
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Disclosure: We have no position in INNV and have not been compensated for this article.