Today, we need to talk about a new business profile, CVR MEDICAL CORP COM NPV (OTCMKTS:CRRVF), a healthcare company. CRRVF released a report about the positive results of the clinical trials for its “Carotid Stenotic Scan (CSS)” device at Thomas Jefferson University, which made the share price jump astonishingly in September.
CRRVF Logo (Source: cvrmed.com/)
CVR Medical Corp. Logo
The share price commenced, in the month of September, trading at the level of $0.25 and jumped to touch the level of almost $0.40 in only a few days. Have a look at the share price action before we provide more details that explain the share price move:
One year stock chart for CVR MEDICAL CORP COM NPV OTCMKTS:CRRVF
Business
CVR Medical Corp. was founded on December 10, 1980 in Canada. It operates through a joint venture agreement with CVR Global, Inc., which was incorporated under Michigan law in 2007 and operates in the medical industry. It is focused on the commercialization of a proprietary sub-sonic, infrasonic, and low frequency sound wave analysis technology. The company headquarters is in North Vancouver, British Columbia.
What’s the business model?
CRRVF is developing a medical device called Carotid Stenotic Scan, which “listens to sound waves produced by the flow of blood within the carotid arteries, analyzing the data to provide the clinician with a report detailing the level of blockage present.”
How does the company assess sound waves?
It owns proprietary sensors developed in house and under a Cooperative Research and Development Agreement with the Army Research Lab:
“These proprietary sensors were developed to enhance the acoustic characteristics of the blood flow under analysis. The low frequency sound patterns are then analyzed by CVR’s proprietary technology. The Device is designed to be a non-invasive, costeffective tool to assess the direct risk factor for arterial disease. Further, the Device is cost effective when compared to other arterial assessment modalities within the healthcare field which requires operation by trained experts and interpretation by medical specialists.” Source
What’s the size of the market?
The device is intended for identifying the probability of suffering strokes. According to the World Health Organization, the stroke accounts for 6.2 million deaths annually. Additionally, as per the Centers for Disease Control and Prevention, stroke leads to 1 out of every 20 deaths, costing roughly $33 billion each year in the U.S. That’s not all. The global stroke diagnostics market was worth US$21.5 billion in 2015 and is expected to be US$31 billion by 2021.
Hence, the company seems to be delivering a medical device, which will not be sold only in a large market, the amount of customers seem to be increasing at a large pace. This fact should make the company worth much more.
Recent Developments
The most significant seemed to be the news released on September 7, 2017. The company noted a summarized report on data from the tertiary clinical trials for the “Carotid Stenotic Scan” device at Thomas Jefferson University. The company said that the report written by Dr. Phillip J. Bendick, PhD, confirms the device’s value and efficiency.
According to the this doctor, “nearly all of the tested patients that had carotid artery stenosis were identified without an overread.” From a financial perspective, the most interesting were the words of CVR CEO, Peter Bakema, who said the following about the new developments and the FDA:
“Internally, in discussions with our engineering and scientific development teams, indications are that we expect the device to improve markedly above the 85% sensitivity level. This, coupled with the expansion of trials for a larger sample size, continues to put us in position for a successful submission to the FDA.” Source
Furthermore, another report was released some days later. RB Milestone Group, LLC, released “Revolutionizing the Vascular Diagnostics Market“, which we could find on the company website. We had a look at the report and considered interesting noting the amount of revenues that are expected:
“CVR Medical has projected the net income in year 1 of sales to be $3.9 million by adopting an extremely conservative view of how the product will be received in the market. The Company has estimated the sale price of the CSS device to be $49,000. At this price, the Company expects a profit of about $31,480 per device” Source
In our opinion, if the company obtains this amount of revenues, the share price should jump much more (note that it did when the report was released). We will be following the next company’s announcements for this reason. We encourage readers to do the same.
Finally, it was also interesting to see that new executives are interested in joining the company. On September 14, 2017, Mr. Alan Langston was elected as Vice President of Sales and Marketing. According to the press release, he will be responsible for market entry strategies for the company’s Carotid Stenotic Scan (CSS) device. He has expertise in working for big corporations, such as Kontron America, Panasonic, Arrow Electronics, Avnet, GE, Siemens, and Philips. We believe that the election of a new executive was a good move.
Conclusion
Currently trading with a market cap of $20 million, CRRVF is an exciting story among small caps. The news are not only good thing, rather we found a considerable amount of cash, no long term debt, and little liabilities in the financial accounts. We appreciate this fact, as the company seems to have a lot of gasoline to run. |
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