As the opioid crisis continues to grip communities worldwide, a ray of optimism emerges in the form of innovative, non-opioid therapies and drug development. Publicly traded companies like Nevro Corp. (NYSE: NVRO), a leader in spinal cord stimulation devices, and Medtronic (NYSE: MDT), a giant in implantable medical devices, are actively contributing to this crucial shift.
Joining the fight are companies like NervGen (TSX-V: NGEN)(OTCQX: NGENF), exploring the potential of non-invasive vagus nerve stimulation. But perhaps the most intriguing player is Endonovo Therapeutics Inc (OTCPK: ENDV), makin waves with their cutting-edge pulsed electromagnetic field (PEMF) treatment, a non-invasive technology with proven opioid reduction benefits, which has the potential to revolutionize pain management and offer a powerful weapon in the fight against opioid dependence.
And Endonovo just gave the investment community 50 million reasons to pay attention to it.
The Devastating Grip of Opioids
Opioids are a class of drugs derived from the opium poppy plant or synthetically created to produce similar effects. Some popular ones are morphine, oxycodone, and hydrocodone. Scarier still, fentanyl and heroin are in this class of drugs. FDA-approved opioids are frequently prescribed to treat severe pain, but their highly addictive nature has led to a widespread epidemic. Here's a glimpse into the gravity of the situation:
*The Centers for Disease Control and Prevention (CDC) reports that 106,699 people in the U.S. died of drug overdoses in 2021, a staggering 75.4% of which involved opioids.
*The Department of Health and Human Services estimates that 10.3 million people in the U.S. misused prescription opioids in 2019, while the National Institute of Health reported that over two million Americans live with addiction to opioids.
*The Dept of Labor (DOL) in listing risk factors for opioid misuse sites as many as one in four people receiving prescription opioids long-term in a primary care setting struggles with opioid addiction, while prolonged opioid use is associated with a significant risk of addiction and may occur in as little as a few days. *National Survey on Drug Use and Health (NSDUH) conducted annually from 2002 to 2011, found that 4 out of 5 users of Heroine first misused prescription opioids.
These numbers paint a grim picture, highlighting the desperate need for effective pain management solutions that are less likely to lead to addiction.
PEMF Therapy: A New Frontier in Pain Management
All is not lost, though, as innovative therapies are stepping in to curb the need for opioids, and in many instances reducing and often eliminating opioid use during medical procedures. Abstinence is the best method to avoid addiction in the first place. This trend is gaining momentum and giving rise to interest in companies like Endonovo and its SofPulse® technology.
SofPulse® PEMF is a non-invasive treatment that uses low-frequency electromagnetic fields to stimulate the body's healing processes while reducing the need for opioids for pain management. Here's how it works:
*SofPulse® emits a pulsed electromagnetic field that has 1,000 times less power than your mobile phone. However, these pulses penetrate tissues and are believed to interact with cellular structures, potentially promoting cell repair, reducing inflammation, and improving circulation. *Studies suggest that PEMF therapy can be effective in reducing and managing pain from various conditions, including surgical procedures, chronic back pain, arthritis, neuropathy, and migraines.
And here's why it is growing in popularity:
*Non-invasive and drug-free. SofPulse® PEMF therapy avoids the risks associated with medications, including addiction and adverse side effects. *Wide range of applications. Research studies suggest SofPulse® PEMF can treat various pain conditions, offering a broader application than harmful pain medications. *Fewer side effects. SofPulse® PEMF therapy is well-tolerated, with no reported side effects. *Potential for long-term benefits. SofPulse® PEMF therapy does not just manage pain, but it also promotes healing, potentially reducing long-term dependence on pain medication.
SofPulse® has been rigorously studied in clinical trials where its PEMF therapy was shown to be effective in reducing pain and swelling. A Baylor surgical study results on coronary artery bypass surgery (CABG) showed a 70% reduction of morphine equivalent dose and a 2-day reduction of length of stay at hospitals using SofPulse®. The FDA has cleared SofPulse® for post-operative reduction of pain and edema.
Endonovo holds a strong advantage with established distribution channels in both the U.S. Veterans Health Administration (VA) and the Department of Defense (DoD). This paves the way for SofPulse® to reach veterans in need and dovetails with the government's promises to find non-addictive solutions for pain management to people in need.
Internationally, the company has distribution in Mexico and Thailand, with plans to expand throughout Central and South America, Europe, and additional Asian markets in 2024.
The $50 Million Factor
Today, Endonovo and its subsidiary, SofPulse Inc., finalized and completed the Asset Purchase Agreement (APA), originally signed in December 2023, for the acquisition of Endonovo's assets and Intellectual Property (IP) for a minimum of $50 million. SofPulse, Inc. has acquired the rights for human medical uses, while Endonovo retains the rights to develop the technology for non-medical wellness products.
The key takeaway here is that SofPulse, Inc. is taking over SofPulse® and being spun out into a new public entity intended to list on NASDAQ via IPO.
Why "a minimum of $50 million?" Because the parties have agreed to engage Adeptus, a qualified independent asset valuation firm. We estimate that Adeptus will set a valuation of the SofPulse assets and associated IP in the range of $50-$100 million. Endonovo currently trades at a market cap of a mere $733,000, which makes it an excellent addition to any investor's portfolio.
This is important because the terms of the deal show that Endonovo shareholders will benefit from the creation of SofPulse Inc. as a public company. As a reward (a stock dividend), they will receive shares in SofPulse, Inc. at a value equal to 80% of their current holdings in Endonovo (ENDV) shares. Additionally, should Adeptus value SofPulse at over $50 million, Endonovo will receive cash or a secured promissory note for the difference.
The Adeptus valuation is not only instrumental in the payout to Endonovo shareholders, but also necessary for an S-1 filing to establish valuation as part of the NASDAQ listing process.
SofPulse on the Move
SofPulse Inc. is poised for growth, announcing a major step towards the future with a capital raise seeking up to $1 million. This offering is available exclusively to accredited investors through a Regulation D, 506(c) offering.
The company with a pre-money valuation of $25 million and shares priced at $2.50 each. This strategic move will be instrumental in fueling SofPulse Inc.'s ongoing development and future expansion.
Looking ahead, SofPulse Inc. aims to secure additional capital through future funding rounds, with a clear goal of completing an IPO and securing a NASDAQ listing.
This marks a significant milestone in SofPulse Inc.'s journey toward further growth and success.
SofPulse Inc. Eyes IPO and NASDAQ Listing
As SofPulse Inc. sets its sights on an IPO and potential NASDAQ listing, everyday investors should take note of the company's key strategies. To appeal to a broader investor base, SofPulse Inc. is prioritizing strong financial performance and growth initiatives, which may include expanding its product offerings and reaching new markets.
Additionally, SofPulse Inc. is working to attract investors by enhancing its communication efforts and offering shares at an accessible price point. These efforts aim to build trust with investors and make SofPulse Inc.'s IPO and potential NASDAQ listing more inclusive and appealing to a wider range of investors.
Endonovo Sharpens Focus
With the sale of the human medical rights and SofPulse® IP to SofPulse, Inc., Endonovo will turn its attention to other promising opportunities. Management intends to utilize groundbreaking multi-coil technology for over the counter PEMF product development in wellness and non-medical human markets while continuing to build their mergers and acquisitions division adding new IP and technology.
Moreover, another opportunity for expanded revenues and expansion lies in the area of telehealth. The company retained its rights to the development of its comprehensive telehealth division and platform. Its first customer is SofPulse, Inc., which has penned a five-year agreement to use the platform. This is an area of Endonovo that could quickly gain significant market traction.
The Road Ahead: Combining Approaches?
PEMF therapy shows promise independently as a front-line pain and inflammation reduction therapy, but it also could be used alongside traditional treatments like MAT (medication-assisted therapy), behavioral therapy, and new innovative approaches to provide a more comprehensive approach to pain management and addiction recovery. Personalized treatment plans are another natural fit where plans are customized to meet a specific patient's needs to maximize successful outcomes.
Nevro Corp. (NYSE: NVRO) is a global medical device company focused on delivering comprehensive, life-changing solutions that continue to set the standard for enduring patient outcomes in chronic pain treatment. The company started with a simple mission to help more patients suffering from debilitating pain and developed its proprietary 10 kHz Therapy(TM), an evidence-based, non-pharmacologic innovation that has impacted the lives of more than 100,000 patients globally. Nevro's comprehensive HFX(TM) spinal cord stimulation (SCS) platform includes the Senza® SCS system and support services for the treatment of chronic pain of the trunk and limb and painful diabetic neuropathy.
NervGen (TSXV: NGEN) (OTCQX: NGENF) is a clinical-stage biotech company dedicated to developing innovative treatments that enable the nervous system to repair itself following damage, whether due to injury or disease. NervGen's lead drug candidate, NVG-291, is being evaluated in a Phase 1b /2a clinical trial. In February, NervGen was recognized by the TSX Venture Exchange as a 2023 Top 50 Company, a distinction that showcases the strongest performances on the TSX Venture Exchange over the last year.
Medtronic (NYSE: MDT) is the leading global healthcare technology company that boldly attacks the most challenging health problems facing humanity by searching out and finding solutions. The company has 95,000+ employees across 150+ countries striving for its mission- to alleviate pain, restore health, and extend life. Technologies and therapies treat 70 health conditions and include cardiac devices, surgical robotics, insulin pumps, surgical tools, patient monitoring systems, and more.
While traditional treatments remain a cornerstone of pain management, the emergence of non-opioid options like SofPulse® PEMF, spinal cord stimulation, and other innovative therapies paints a hopeful picture. As research progresses and clinical evidence supports the benefits of these therapies and their technology more accessible, the future of pain management holds the promise of a world where fewer people needlessly suffer and the opioid crisis becomes a distant memory.
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