BioElectronics Corporation (OTC:BIEL) Poised for Major Revenue Growth Print E-mail
By M.E.Garza   
Monday, 13 July 2009 11:44
As incredible as it may sound, the researchers at BioElectronics Corporation (OTC:BIEL) have taken the same technology that used to occupy the space of a “small dorm room refrigerator” and put it into a microchip. That technology is now the basis for a number of new products that are being used to treat pain and aiding the healing of soft tissues injuries. These products often shorten the healing time of cuts, bruises and soft tissue injuries by more than half and have been used by plastic surgeons for years.  The efficacy of the technology on which the product is based is well documented in numerous scientific studies and now the company is very actively working to get these new products to maket using an extensive distribution network - with more plans are potential partnerships in the works.  BioElectronics is poised for continued strong revenue growth and as you can see in our exclusive BioMedReports FDA Calendar, they have not one, but two applications with the FDA for 510(k) marketing clearance. In addition, we learned that the company is getting ready to file at least two additional FDA applications.

BioElectronics Corporation (OTC:BIEL)

The Company's wafer thin patches contain an embedded microchip and battery that deliver pulsed electromagnetic energy, a clinically proven and widely accepted anti-inflammatory and pain relief therapy that heretofore has only been possible to obtain from large, facility-based equipment. BioElectronics markets and sells its current products under the brand names ActiPatch™ and RecoveryRx™.

The dermal patch delivery system creates a multitude of new product opportunities for chronic and acute inflammatory conditions. The market potential is estimated at $10 billion or 400 million incidents worldwide. The distinctive value proposition of ActiPatch is the delivery of drug-free therapy that reduces pain and inflammation and accelerates healing by 30% to 50% when compared with the present standard methods of patient care. The current major applications are:

  • Medical Surgeries
  • Chronic Wounds
  • Oral Surgeries
  • Sprains and Strains
  • Lower Back Pain
  • Chronic Repetitive Stress Injuries, Heel Pain, Carpal Tunnel, Bursitis, etc.
How it Works:

The body's natural response to soft tissue trauma is a localized inflammatory reaction. The damaged cells separate to prevent the transmission of infection. The cells leak fluid and cellular components break down while the cellular debris causes inflammation, swelling and pain.

This inflammatory response, which has a physiologic protective action, in fact creates an environment in which the healing process is actually prolonged or stalled in chronic wounds.

ActiPatch Therapy uses proven medical technology to truncate the body's inflammatory response (i.e. breaks the cycle of chronic inflammation). It does this by delivering pulsed electromagnetic energy directly to the affected area and driving out the edematous fluid along with byproducts of the damaged tissue. This provides a well demonstrated and significant overall improvement in the restorative and recovery process following injury. As a result the pain associated with soft tissue injury is often substantially reduced.


Perhaps this is why investors are starting to take notice of this company whose stock is trading for pennies, literally. When the company came on to our radar screen, a couple of weeks ago it was trading at a fraction under a penny. Now it’s up to nearly three cents and likely to climb higher as we approach those upcoming FDA approval dates and beyond. Good news is developing quickly for this group and a search through the recent press-release archive confirms that trend.

I went looking for some direct information about the company and was able to find Joseph A. Noel, a spokesman for the company who candidly shared some details with me about the company, it’s technology, direction and future plans. A transcript of our conversation can be found below:

For the people that aren't familiar with the company, you guys make inexpensive, disposable, anti-inflammatory devices.  Can you explain that a little bit, what those are?

Noel: Yes, there's a technology called PEMF, or Pulse Electromagnetic Field Therapy invented by Nikola Tesla, who is the father of modern electrical engineering, you know.  He had these very large electromagnetic coils.  He'd put a person in between them and he noticed that there was a positive effect on the cells in the body.  After World War II, the technology was perfected by the Japanese and the Europeans, incredibly enough (what timing there), but it was a very big machine, and over the years this technology has been perfected and there are literally two thousand two hundred studies on the National Institutes of Health database that look at PEMF affects on cells.  I don't know of any one of them that said there’s any safety issue, and efficacy is very high.  There are two or three other companies that have indications for various things, most of it is post-operative related treatment for swelling and pain, but these are very big machines.  It's in a clinical setting; I call it a "dorm room refrigerator", like a little refrigerator that goes in a dorm room at college, that's how big they are.  You can't strap it to your arm or attach it to a woman's breast after an augmentation surgery, for example.  What we did, is we took that same technology and we shrunk it down to one computer chip, one micro-battery, so the control unit is about as big as five quarters, stacked one on top of the other.  Then there's a little wire loop that goes out, it's like a six-inch loop, and then within the wire loop is an electromagnetic field.  So, what we've done is we've taken electromagnetic frequency technology, that was as big as a refrigerator, and we've shrunk it down to a patch that a plastic surgeon can use on top of an incision - you can use it on your knee, your back.  We have received FDA clearance for treatment of edema, or swelling, post blepharoplasty, which is a common eyelid plastic surgery procedure.  We're cleared in the EU as a Class II device, we are cleared by Health Canada for general musculoskeletal complaints, a sore knee or a sore back.  We're selling very well in Canada.  We're on the store shelves in Canada.  We recently hit the store shelves in the Netherlands, Brussels and Luxemburg.  We are in the pharmacies, and (things are a little different in Italy) we're in the pharmacies in Italy.  We're cleared just about everywhere else in the world for over-the-counter, except for the United States.

And what is the status on that? Anything in front of the of the FDA now?

Noel: Yes, we just completed two studies on menstrual pain.  Dr. Barry Eppley, a Plastic Surgeon in  Indianapolis, Indiana and Dr. Sheena Kong an Internist in San Francisco, California, showed very high efficacy.  Over fifty percent of women had more than a fifty percent reduction in pain, with no safety issues, ninety-one women in the study, double-blinded, placebo-controlled, randomized study.  We used that as the basis for the 510K pre-market application with the FDA about two weeks ago.  We're getting ready to file two additional 510K applications, one for general surgical procedures, and the other for heal and foot pain.

There is also Dr. David Genecov, a very prominent surgeon in Dallas.  They’ve now completed their heel and foot, their plantar fasciitis study, and they’ll use that to file an FDA application.  There are numerous other studies that we're going to do.  We're going to file one for general surgical recovery, that will put us into that channel. That will augment our current indication for blepharoplasty, but one of the big things that has increased interest in the company is the FDA panel recommendation to pull extra-strength Tylenol off the market, and to basically get rid of the narcotic-combined acetaminophen products.  There's kind of a scare out there right now.  A lot of people don't want to take Tylenol, and the physicians that have been backing our company and have been using the product, they come right out and say, they’re quoted in our press releases the other day, they like using this because they don't want to give their patients narcotics, and they can either limit they’re patient’s use of narcotics by using this, or they can severely restrict the use.  I’m actually a user of the product.  I recently had a skin cancer surgery, and I used the product, and after I used the product, I was amazed, my surgeon was amazed, and you know, after that I was pretty sold on the technology.

So one of the interesting things to note is that it not only provides pain relief, but it also apparently helps the cells themselves heal?

Noel: It does.  We think that the big market for this is not just surgical recovery.  We think the big market is just regular musculoskeletal complaints like back pain.  However, it does, you know, there is overwhelming evidence that PEMF technology speeds healing. And, just in my own surgical recovery, my surgeon was amazed at how fast I healed.  I had about six and a half inches of stitches in my skin cancer surgery, and I took one Vicodin.  I went back for my checkup three days later and the surgeon said, "Do you need a prescription for a refill of Vicodin?"  I said, "No, I just took one," and he was just shocked.

The company recently announced a new Chairman.  What can you tell us about that development?

Noel: Rick Anderson, who is a full professor at the Fuqua School, one of the top business school, as part of the Duke University.  He had been a board member, and he came on board to be Chairman of the Board.  He's got significant FDA consulting experience, a very experienced market researcher, so he's been instrumental in helping guide the management team toward these clinical studies  and the filing for indications.

As you are looking at obviously expanding the market for these products, you've got several applications, like you said, with the FDA, you've got worldwide sales, etc..  Are there any developments, or anything you can talk about as far as the preparation for hitting the marketplace with this products, or partnerships, or anything like that?

Noel: Well, we're a small company, so we have distributors around the world.  I shouldn't say around the world.  We have several distributors in various companies.  Canada has been the most successful thus far.  We have very big hopes for Italy and Northern Europe, where we have two very aggressive distributors. 

In the US, however, all we do is, you know, we can't hire a sales force to go market to plastic surgeons for blepharoplasty, which is eyelid surgery, that makes no sense.   And of course, you can't market off-label, so we haven't done basically anything in the States.  In the States, however,  we have had conversations with manufacturers and distributors of feminine hygiene products, who have experienced significant interest in a delayed menstrual pain relief products, but they're all preliminary discussions.  They say, "Great, let us know what happens with the FDA, because we're all interested." 

For general plastic surgery, we've got some other avenues to pursue, but, again, we believe that the big market for this is a treatment for musculoskeletal complaints - back pain, knee pain, things like that.  The market in Canada is actually pretty incredible.  The distributor has learned that the primary target market is elderly women with chronic pain, and we think that the market in the US for that is very significant.  We can develop that market ourselves, and put it on the store shelves.  I'm assuming we’d get over-the-counter clearance, which I think we will.  Probably a more likely avenue, is we'll pick a major distributor of drug store, on-the-shelf products to help us out.

Great, let's see, is there anything else that you might want the investment community to be aware of, as far as Bioelectronics?

Noel: We pretty much covered it.  It's a group of people who've developed what we think is a revolutionary technology.  We think the timing is perfect, considering that there's a very high likelihood that the FDA is going to make drugstores pull extra strength Tylenol off the market.  I think that’s going to speak volumes about the safety of that particular drug.  FDA is saying “Acetaminophen is not candy.”  Don't pop a couple in the morning, maybe you take a Nyquil at night, have a couple of cocktails, and then get up in the morning and take some more extra strength Tylenol because your back hurts.  That has a negative affect on your liver, it's just a fact, and we think that that will help a lot of people start saying, "Well, maybe I just don't want to take a pill.  What else can I use?" We think we've got a great alternative for that.

One thing that I missed was pricing, how expensive are these devices?

Noel: They retail for $39.95 in Canada.  They're not available over the counter in the United States, but we think it's a similar type of price, and the pricing in Europe is roughly equivalent.  We recently moved all of our manufacturing to China.  We gained a significant improvement in quality by doing that, and we significantly lowered our costs, so our gross margins on our costs of goods sold, versus retail level, is about seventy-five percent gross margin.

Where were you producing before, here in the States?

Noel: We actually produced in the States, and we had some problems with the epoxies that were used, the connections to the power unit, and frankly, that set the company back.  A lot of physicians and plastic surgeons wanted to use the product, but they're not going to mess around with something that's not one hundred percent reliable.  The difference is that the new products are bullet-proof.  You pull the pin out, it lasts for at least thirty days.  Women can use it for their menstrual cycle for three periods.  People in Canada are using them for forty-five days for back pain; extremely reliable product right now.


It’s important to note that the process of treating soft tissue injury has advanced very little in the medical field.  The process that has been in place and pretty much standard operating procedure that has been in place for over a thousand years, really.  When someone gets a cut, a bad bruise or a sprain doctors typically clean the affected area, wrap it in some type of bandage in an attempt to prevent infection and then immobilize the injured part of the body.  Meanwhile, the patient endures the pain and waits while his body recovers and heals. What this company is attempting to do in order to address and change this process makes this investment quite interesting. Purely from a financial standpoint, the multiple applications for the product are multitudinous yet certainly as numerable as they are potentially profitable.

As with many other biomedical companies, a lot is riding on the upcoming approvals and future marketing clearances of these devices by the FDA, but the odds for positive nods and continued market growth look very favorable. In addition, the media attention and customer reviews of the product (see video on left for one recent example) will likely continue to propel adoption of the technology by the general public.

"Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'.

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