Developmental biomedical device company PetVivo Holdings Inc. OTCMKTS: PETV makes pet medical devices and therapeutics. What kind of medical devices would pets need? Pacemakers? Artificial hearts? Neural links? Nanobots? Not quite. Pets get old, and as they get older, aging conditions like osteoarthritis (OA), joint pain and lameness become chronic ailments.
Key Points
- PetVivo makes medical devices for pets to alleviate pain and improve quality of life.
- PetVivo’s Spryng injectable is finally shipping and generating revenues bolstering a 10X surge in fiscal Q3 2023 to $510K.
- The company raised $1.4 million in a January 2023 secondary for 600K shares priced at $2.32 to last until mid-2023.
- PetVivo will need to continue raising capital to pursue the commercialization of its Spryng product.
Lameness is caused by injuries to the bones, joints or nerves, resulting in slight limps to complete immobility and inability to bear any weight on the affected limb. Animal health care is a burgeoning industry. PetVivo is just starting to see revenues accelerate as its leading product to alleviate chronic joint pain starts shipping.
Pet owners who don't want their old companion dogs suffering in pain are a target demographic. OA affects 25% of all days and 50% of all horses, comprising a potential $11 billion total addressable market (TAM). Approximately 69 million dogs and 7.2 million horses are owned by 70% of U.S. households.
Spryng with OsteoCushion Technology
PetVivo's top product in the market is Spryng, which started shipping in late 2022, causing revenues to jump 10X from $50K to $550K. Spryng is an intra-articular injection of a collagen-elastin biomaterial, OsteoCushion technology. It's injected directly into a dog's joints like a shock absorber mimicking the protective form and function of natural joint cartilage. The biomaterial comprises purified, naturally-derived proteins and a carbohydrate that forms a soft, lubricous and elastic cushion. Spryng can be used for small animals like dogs and horses.
Spryng vs. NSAIDs
After Spryng injections, many canines can discontinue non-steroidal anti-inflammatory drugs (NSAIDs). Spryng is a practical, economical solution for OA. A single injection costs approximately $600 to $900 and lasts 12 months. It doesn't have the side effects of NSAIDs which can cause gastrointestinal pain, kidney and liver dysfunction, ulcers and changes in behavior and appetite. PetVivo competes with NSAID makers Zoetis Inc. NYSE: ZTS, Merck & Co. Inc. NYSE: MRK and Novartis AG NYSE: NVS.
Pipeline
PetVivo sells Spryng through its distribution deal with MWI Animal Health, a subsidiary of AmerisourceBergen Co. NYSE: ABC and directly from its website to licensed veterinarians. The company’s new 14K warehouse facility, which it will move all its production into by August 2023, can produce 500,000 units annually, potentially generating up to $100 million annually. The company also has a pipeline of 17 products in different stages of development and commercialization. It focuses on veterinary medical devices which don’t require premarket FDA approval.
Revenues Surge, So Did Losses
On Feb. 9, 2023, PetVivo filed its fiscal third-quarter 2023 10-K form results for the quarter ending in December 2022. The company saw revenues of $510K, up from $51K in the year-ago period. Gross profit was $286K. Net loss was ($2.3 million) or ($0.23) in the quarter. $457K of revenues were related to the shipments of Spryng to its distributor MWI Health.
Raising Capital
PetVivo has 3.1 million warrants outstanding, with the exercise price range between $4.01 to $5.63. Net cash was $374K at the end of the quarter. The company executed a 600K secondary offering in January 2023 priced at $2.32 to raise $1.4 million to meet expenses for the next four months but will need to raise more cash in efforts to commercialize Spryng.
CEO Insights
PetVivo CEO John Lai commented during its fiscal Q3 2023 conference call. The company plans on beefing up its sales force by hiring at least two more territorial sales and business development managers. The company is promoted at significant conferences, and Spryng is getting much interest. At the Veterinary Expo in Orlando, FL, “A couple of the veterinary doctors that were doing presentations brought up our product and kind of talked about the success that we're having. So our booth got inundated with a bunch of veterinary doctors as well vet techs, substantially big numbers.” He noted that the standing-room-only theater presentation by Dr. Manning at the AAEP, with 100 vets, drew significant awareness to the company and its products.
PetVivo's SEC filings are at MarketBeat.
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Weekly Rising Price Channel
The candlestick chart on PETV illustrates a rising price channel on light volume. Shares started their ascent after bouncing off its $1.23 swing low in May 2022. Shares perpetually formed higher highs and higher lows, forming the rising parallel price channel, culminating in a price peak of $3.60 in March 2023.
PETV formed a weekly market structure high (MSH) sell trigger under $2.83, causing shares to fall to a new swing low of $1.79 in May 2023. PETV triggered a weekly market structure low (MSL) buy trigger on the breakout through $2.20 as a share attempted to break out through the weekly 20-period exponential moving average (EMA) at $2.42.
The weekly RSI bounced off the 40-band. Pullback support levels are at $2.20, $2.01, $1.79 and $1.66.
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