BioElectronics Corporation: Letter to Shareholders
FREDERICK, MD--(Marketwired - Oct 24, 2013) - BioElectronics
Corporation (OTC Pink: BIEL) presents letter to shareholders.
Dear Fellow Shareholders:
I want to report on the progress we're making on the four-part
growth strategy I articulated in my last letter to
shareholders. I said that the path to success for
BioElectronics would focus on the following four ongoing
efforts:
1. Executing an aggressive marketing and sales program in the
large European markets and select other global markets; 2.
Developing political and public support to compel the US FDA to
recognize our therapeutic solution to the dire need for an
alternative to the devastating side effects and addictions of OTC
and prescription drugs; 3. Continuing clinical research to develop
new products and substantiate our efficacy in more indications;
and, 4. Lowering our cost of capital to finance expansion.
First -- Global Marketing Program
Earlier this year we engaged the Gro-International team to
position our products for European sales and despite the slow
global recovery they have made progress. We shipped our
ActiPatch® Therapy product this month to Boots, the leading
pharmacy chain in the United Kingdom and a role model in the
industry. Boots pharmacies are a strategic member of the
Boots-Alliance, the world's first global pharmacy-led health and
well-being enterprise. Walgreens, the largest drugstore chain
in the US, acquired 45% of Alliance-Boots in August. ActiPatch
will be available to UK customers on Boots.com on November 1, and
will be on store shelves around the country starting next
week. We are using the Gro-International team and the UK firm,
Fuel PR International to facilitate this launch.
The innovation award we won from OTC Bulletin in March
has yielded more than a good-looking plaque. Our products
caught the attention of several interested parties including three
of Europe's largest pharmaceutical companies. We are actively
exploring distribution and co-branding licensing proposals with all
three. In each case these proposals offer significant potential
advantages to the company. The most immediate would be product
sales to companies with well-established, funded marketing and
sales channels, and licensing agreements with royalty
income. This strategy maintains our first-to-market advantage
while giving us access to a good income stream and marketing power
and access to capital (without further dilution). Another advantage
would be the spill-over effect associated with this co-branding
alliance on our other brands and obtaining additional distribution
in other regions.
Second -- Developing political and public support to compel the
US FDA to recognize our therapeutic solution
The Obama administration has tasked the FDA to deal with two
critical situations. The first is the CDC declared "epidemic
of prescription drug abuse" that is killing about 43 Americans each
day -- or about 16,000 annually. The second is the anticipated
demand for physician services from the 47 million new patients who
could potentially enter the systems as a result of the Affordable
Healthcare Act. (50% of the visits to emergency rooms are
prompted by pain complaints and our research shows that at least
60% of all adults over the age of 45 indicate treating pain one way
or another in the last three months).
We think this is an opportunity for us to change our dynamic
with the agency. Both of these issues can be mitigated by OTC
availability of our safe, effective Bioelectroceutical™
technology. We've taken the following steps to increase both
awareness by the FDA and political pressure on the agency to
rethink their outdated approach. There seems to be a change in
attitude as evidenced by the May 2013 Public Advisory Committee and
the FDA recommended reclassification of Pulsed RF electromagnetic
devices from Class III to Class II for postoperative pain and
edema. This reclassification should help us get ActiPatch
Therapy an indication of use and OTC market clearance for the
relief of musculoskeletal pain.
Bioelectroceutical healing and pain relief is a safe and
effective analgesic and a viable alternative to the vicious cycle
of drug therapy; that is, the cycle wherein marginally efficacious
therapy leads to increasing dosage and therapeutic agent demands,
particularly in the challenging cases of back and other
musculoskeletal pain. Systemic drugs only mask the pain and do not
accelerate the healing process, resulting in long-term use at
increasing dosages, which increases the risks of hazardous side
effects. This vicious cycle also asserts a significant additional
demand for physicians' services and a corresponding increase in
healthcare costs.
We've launched a program, "I'm SMART About Drugs," to create
public, physician, press, and administration pressure for
resolution of the prescription drug abuse problem. We engaged
Dr. Christine Dumas as the patient advocate and educator to promote
awareness of our drug-free solution to pain management. Jay
Geer of Miller Geer & Associates, a leading health care PR
firm, is placing Dr. Dumas and getting our message into print, TV,
web and radio outlets. We are collaborating with drug-free.org
and other community organizations to get the message out to the
general public.
In the U.S. we are pointing consumers to a new web site which
you can reach through both http://www.smartAboutDrugs.org and
http://www.find-relief.com which explains the program and includes
a locator service to allow U.S. consumers to find licensed medical
professionals who use our product and can write a prescription for
consumers. We sponsored a special issue of USA Today on pain
management and have scheduled public speaking engagements on TV,
radio, press and the web. There is a Medical News feature on
ActiPatch and an Empowher.com by-lined article by Dr. Dumas
scheduled to publish this week. We are recruiting health
bloggers to get out the message. The objective is to generate
demand that compels the FDA to release this technology to the
American public -- a technology that is clinically proven and
readily available in all other parts of the world.
Central to this program is defining and explaining
Bioelectroceutical technology. Traditionally the FDA has
maintained that pulsed RF electromagnetic therapeutic devices,
which do not significantly raise the temperature of tissue, cannot
be effective. They focused only on heat as a therapeutic agent
as to date there had been no reported physiological responses to
non-thermal pulsed shortwave radiofrequency fields. However, we are
now able to clearly demonstrate measurable physiological responses
of human tissue to non-thermal RF fields. These measured responses
were muscle activation, through nerve activation, and increased
blood flow. This constitutes a major breakthrough as we have now
clearly shown a physiological response -- increased blood flow,
that would result in decreased pain and improved injury recovery
times. The discovery of the mechanism of activation, which is
dependent on the pulsed signal rate of ActiPatch non-thermal RF
field, will mitigate the FDA's central argument in denying market
clearance.
Third -- Continuing high quality clinical research, to further
substantiate clinical efficacy and establish more indications of
use.
Significant progress has been made on this front, with clinical
trials on three musculoskeletal pain conditions, plantar fasciitis,
acute lower back and osteoarthritis of the knee. Two studies are
being conducted on postoperative pain, hernia recovery and 3rd
molar extraction. An independent study is also being conducted on
venous stasis ulcer wound healing and pain management. All the
clinical research is being conducted by well respected, and widely
published clinical researchers. At this time the plantar fasciitis
study has just been completed. The primary end point of this
study was disability and pain at six months after ActiPatch
therapy. The results show excellent improvement at the 6 month time
point, indicative of tissue remodeling and healing. The subjects
had chronic plantar fasciitis presenting with symptoms for an
average of 29 months prior to joining the study with high levels of
pain and disability.
Rapid progress has also been made on the acute lower back pain
and osteoarthritis of the knee studies. These studies will be
wrapped up by the end of 2013. Interim results for the acute lower
back pain study were very promising. We are hopeful that together
the results from these three clinical trials as a series of diverse
musculoskeletal pain conditions will allow us to compliment and
support our continuing efforts with the US FDA to gain market
clearance for ActiPatch. The two postoperative pain clinical
studies will be completed in first half of 2014.
Supplementing these clinical studies are two peer reviewed
publications which will be published in 2014.
- "The Case for OTC Shortwave Therapy, Safe and Effective Devices
for Pain Management" will be published in the January issue of
Pain Management, author Ian Rawe, Ph.D. Director of
Research, BioElectronics.
- "Non-thermal Pulsed Shortwave Therapy", authors: Kenneth
McLeod, Ph.D. and Sree Koneru. This paper will support our
efforts to achieve the goal of ActiPatch market clearance from the
FDA as it provides physiological data in response to non-thermal
pulsed shortwave therapy.
The Clinical studies are being conducted at excellent medical
institutions: Tufts Dental School, University of Chicago Medical
School, University of British Columbia, University Hospital Ghent,
Belgium, University Hospital G. Martin, Messina, Italy and
University of Otago, Dunedin, New Zealand.
Fourth -- Lowering our cost of capital to finance expansion.
We expect that the combination of an initial license payment and
royalty payments that would be associated with the above discussed
potential licensing agreements will mitigate our need for immediate
capital and allow us to rectify our market
capitalization. Moreover such licensing agreements would
significantly reduce the demand for capital to finance advertising
and sales efforts, permitting us to focus on new product
development and related research. There are a number of
potential applications of our underlying technology that we have
had to put on the back burner because of resource issues.
As you can see, all the elements of our four-pronged strategy
are coming together. We already have secured distribution with the
leading retailer in the UK and are talking to three of the largest
pharmaceutical companies. We are actively pursuing a strategy to
get FDA approval and we have a pipeline of new clinical studies
that will support our claims of efficacy. All this will allow us to
lower our cost of capital and to finally reach our growth
potential. As before, the key BioElectronics advantage continues to
be our outstanding product portfolio of proven, safe, and
cost-effective pain products for the hundreds of millions of
chronic pain sufferers. On behalf of the board and management
of BioElectronics, I want to thank all our long-term investors for
their patience and faith in the future of our Company. We will
continue to expend every effort to fulfill its promise.
Sincerely,
Andrew J. Whelan President
Contact: Paul
Knopick 940.262.3584 pknopick@eandecommunications.com
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