NanoVibronix CEO Brian Murphy Provides Business Update Letter to Shareholders
ELMSFORD, NY–(Marketwired – December 21, 2017) – NanoVibronix, Inc, (NASDAQ: NAOV), a medical device company utilizing the Company’s proprietary and patented low intensity surface acoustic wave (SAW) technology, today provided the following business update and letter to shareholders from its Chief Executive Officer, Brian Murphy:
“It is my sincere pleasure to address you through this letter and inform you of the progress, opportunities, and potential of NanoVibronix. I hope to use this letter as a means to highlight the work we have done, but more importantly, the work we will do to make our company successful.
As many of you may already be aware, I have worked in the medical device and medical biologics industry for over 30 years. My background is mostly commercialization of new technologies at various levels in each organization, from sales to the executive level. Our Chairman, Christopher Fashek, whom I have worked with for many years, also has an extraordinarily successful history in commercializing new and existing technologies. He and I joined NanoVibronix late last year after careful consideration and due diligence. It is a sincere honor to have been given the opportunity to serve in this role, for a company we believe to be with such a unique, effective, and versatile Surface Acoustic Wave (SAW) platform technology. Both the existing products and future innovation will serve the medical community well and benefit patients suffering from several chronic conditions.
As 2017 comes to a close, I wanted to share an overview as to what has transpired at NanoVibronix, focusing on what has taken place during this year and why we are so excited about the future. Capital constraints earlier in the year impeded some initiatives, but following our recent capital raise of $6 million in November, we believe we now have the pieces in place to facilitate growth of our three existing product categories and two additional products in our pipeline at the development phase. For 2018, we are focused on advancing and executing on our commercialization plans.
Randomized Control Trials
The success of medical devices is reliant upon strong clinical evidence. We have three ongoing clinical studies that are nearly or completely enrolled. All of these studies have been approved by the Investigational Review Board (IRB) and are intended to prove the efficacy of two of our existing products, UroShield™ and PainShield™, and one product under development, LungShield™. The UroShield™, approved in Europe, Canada, and India, is intended to prevent bacterial colonization, biofilm, pain, and ultimately prevent catheter associated urinary tract infection. The clinical trial employing UroShield™ has completed enrollment, and data collection as well as analysis is currently underway. Interim results were released on November 8th, 2017. We found the results to be impressive, highlighted by the fact that less than 4% of patients using UroShield™ developed infections versus 52% of the control group.
The PainShield™, currently approved for sale in Europe, Canada, India, and the United States, is intended to treat and resolve pain through the application of our proprietary, patented, Surface Acoustic Wave (SAW) technology. The current randomized control trial is designed to validate the product for the treatment of Trigeminal Neuralgia. Successful interim results were released on November 29th, and we strongly believe that this technology represents a powerful potential alternative to opioid and surgical interventions. Both the UroShield™ and PainShield™ studies are expected to be ready for submission to a peer reviewed journal within a few months.
The LungShield™, currently under development and not commercially available, is intended to prevent bacterial colonization on endotracheal tubes employed on mechanically ventilated patients. Additionally, the LungShield™ study may determine whether these patients will have a reduced rate of bacterial resistance to antibiotics. The study is nearing full enrollment, although interim data is not yet available at this time.
Sales and Marketing Activities
Our improved capital position allows us to set our sales and marketing initiatives in motion. The three primary categories we are focused on are direct-to-consumer, independent distributors, and product licensing agreements. Several necessary components factor into ensuring success in each category, including qualified personnel, product integrity, and product cost. Limited availability of capital had slowed our progress, but we were able to make several advancements relative to each. All three aspects are a key focus of ours as we move forward.
Direct to Consumer Marketing
Several initiatives were undertaken over the last six months and are quickly developing and improving our direct-to-consumer platform. First, we contracted Group SJR in New York to examine our cyber landscape/ecosystem. Group SJR has designed and launched our new website www.nanovibronix.com, which is now fully functional with a much fresher look tailored to improve our e-commerce platform, and a more refined investor tab. Additionally, we contracted with Logical Positions, to improve our adwords campaign for optimum positioning in paid searches. We are currently interviewing outside companies to manage our search engine optimization and social media marketing. Our goal is to optimize the upcoming trigeminal neuralgia and urological study results in published articles and various media outlets. We also have a dedicated sales specialist now that is accountable for our direct to consumer marketing initiatives.
The distributor strategy for our products is intended to be highly focused, capitalizing on the existing contacts and core business of each respective distributor, and geographically exclusive where we believe they can have the biggest impact for NanoVibronix’ products. In each geography, we will strive to ensure that our interests are aligned with our distributors. We have made progress signing our initial distributors, but have a long way to go in this area. We have three direct sales leaders in the area of distribution, geographically focused, all with quotas, responsibilities, and accountabilities. We are planning to add additional sales leaders to accelerate our plans. In addition to our direct employees, we recently signed Morulaa as an external manager for the business in India. Morulaa is a specialist in this area with 8 offices, 15 people physically located in India, and highly experienced in establishing and managing distribution for medical device manufacturers. They also bring a regulatory expertise to or efforts in this very important region. You can learn more about Morulaa at www.morulaa.com. We have also contracted with two external companies who identify distribution partners, Diligence Wound Care Global, LLC (www.diligencewcg.com), and Cellmark Medical LLC (www.cellmark.com). Both groups are entirely incentive based.
Licensing, Private Label, and Strategic Partnerships
We have made significant progress on the strategic partnership front. A strategic partnership can take many shapes, including private label, dual label, license, etc. Any and all of these partnerships have the potential to change the future of NanoVibronix in a very positive manner. In general, all the companies I have engaged and facilitated discussions with are large, prominent, and leaders in their respective markets. We have already announced one such agreement reached in November with with a major cosmetics company. Although we were not allowed to disclose their name, this is a well recognized global company, and we are working on many more similar agreements.
U.S. Food and Drug Administration (FDA)
In August, we hired an external FDA consultant, Idonea Solutions, LLC. Idonea Solutions is a specialized and experienced firm with an excellent track record in the realm of the FDA process. This area requires focus and a constant attention to detail, both attributes of Idonea Solutions. I believe this is essential to our future with respect to two product areas, PainShield™ and UroShield™, but is important to our future product innovations as well. The initiatives surrounding both devices are quite different but equally as important. First with regard to UroShield™, as we wrap up our study in upstate New York, our focus needs to be clearly on the proper and effective submission to the FDA for 510(k) clearance. Idonea Solutions has been in contact with the FDA and ongoing dialog is planned. Relative to PainShield™, we are establishing a pathway toward elimination of the physician prescription requirement. A PainShield™ without the prescription requirement opens up commercial revenue opportunities which would otherwise be challenging today.
As a result of our recent capital raise, we currently have approximately 6.7 million common and equivalent shares issued and outstanding and 4 million warrants and options with an average exercise price of $5.10, which if the warrants and options are cash exercised would bring in an additional $20.4 million to the Company. As of November 30, 2017, we had no debt and our balance sheet is stronger than at any point in the Company’s history.
Much has changed over the past year and many more changes, and improvements, are coming. I believe the most significant change is how rapidly we are advancing our product pipeline. With our improved capital position, we are in the midst of several significant shots on goal. Any one of these could transform the company relative to our profile today. With all the recent developments and adequate resources, there are many more shots on the way. There is much to do, but be assured that I am dedicated to a successful NanoVibronix.
I wish all of our dedicated shareholders a very happy holiday.”
NanoVibronix Inc. (NASDAQ: NAOV) is a medical device company headquartered in Elmsford, NY with research and development in Nesher, Israel, that is focused on developing medical devices utilizing its proprietary and patented low intensity surface acoustic wave technology. The company’s technology allows for the creation of low-frequency ultrasound waves that can be utilized for a variety of medical applications, including the disruption of biofilms and bacteria colonization, as well as providing pain relief. The devices can be administered at home, without the assistance of medical professionals. The company’s primary products include PainShield, UroShield and WoundShield. Additional information about the company is available at: www.nanovibronix.com.
This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) market acceptance of our existing and new products, (ii) negative clinical trial results or lengthy product delays in key markets, (iii) an inability to secure regulatory approvals for the sale of our products, (iv) intense competition in the medical device industry from much larger, multinational companies, (v) product liability claims, (vi) product malfunctions, (vii) our limited manufacturing capabilities and reliance on subcontractors for assistance, (viii) insufficient or inadequate reimbursement by governmental and other third party payers for our products, (ix) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (x) legislative or regulatory reform of the healthcare system in both the U.S. and foreign jurisdictions, (xi) our reliance on single suppliers for certain product components, (xii) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain and (xiii) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction. More detailed information about the Company and the risk factors that may affect the realization of forward looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.