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Current OS: 4,772,318 (no outstanding option or warrants)
Key Points
Hydromer has patented the use of carvacrol for hand sanitizers, soaps, and lotions that have proven to be more effective and provide longer lasting protection than alcohol based sanitzers. (1)
The company’s coating technology is integrated into N8 Medical’s CeraShield™ Endotracheal Tube (ETT) that was granted a “Breakthrough Device” designation under the FDA 21st Century Cures Act, which is currently in clinical trials under expedited FDA review protocols (2)(3);
The company has a significant amount of intellectual property in the medical device coatings, cosmetic bases, and green chemistry markets which have the potential to add significant value
Company Profile
Hydromer, Inc. is a ISO 9001:2015 polymer research and development company, which is engaged in the business of inventing, developing, patenting, licensing, manufacturing and selling hydrophilic polymer-based products for commercial markets. The Company's segments include Polymer Research and Medical Products. The polymer research segment includes products, such as Aquamere®, a cosmetic intermediate with water resistant film forming properties; Aquatrix®, a cosmetic hydrogel; Be Aqua™, a line of anti-aging cosmetic formulations; Dermaseal®, a dermal barrier film product for the prevention of contact dermatitis; HerbaSafe™, a line of antiseptic soap and skincare products; Hydromer® Anti-Fog/Condensation Control Coatings, Hydromer® Lubricious Coatings, Sea-Slide®, a coating for watercraft hulls; and STAYWET®, ultra-hydrophilic coatings. Research and development services and all of the company’s royalties and contract revenues are reported in this segment.
The medical products segment includes a biofeedback medical device, contract coating services and engineering equipment sales and services.
The company owns several process and application patents for Hydromer® coatings, these polymers become extremely lubricious when wet. The company has been issued patents for permanent anti-fog coatings, hydrophilic polyurethane foams, hydrophilic polyurethane blends, several biocompatible hydrogels, and an anti-bacterial medical material. The company continues to actively evaluate for its polymer technology specifically in neurology and cardiology.
Hydromer Coatings: Lubricious / Bacterial Resistant / Thrombo-resistant / Cell Mitosis / Cell Adhesion: When treated with a Hydromer lubricious polymer, a medical device becomes very slippery when wet, allowing for easy insertion into any orifice of the body, vascular access or for device-in-device (i.e.: guidewire-catheter) use. Hydromer coatings are permanently bonded to the device unlike silicone lubricants, which must be reapplied after each use and are often left behind in the bloodstream and in body cavities. The company believes that the polymer-water interface provides lubricity superior to the quality of other currently marketed lubricants to treat medical devices.
Drugs and other substances can be readily incorporated into Hydromer coatings, allowing for controlled release from the device for therapeutic purpose or the creation of permanent biocidal or biostatic surfaces (bacterial resistant coatings).
Market Opportunity
Hydromer Medical Coatings
The company’s primary business has been with its Hydromer® coating technology, currently licensed and utilized on several medical devices including various vascular and urinary catheters, guidewires, inter/intra-ocular lenses, and related medical devices where it is beneficial to be “slippery when wet” to allow the device to slide easily for less-invasive medical procedures.
The company reported “Royalty and Contract revenues” of $1.54 million in 2018, growth of 23% over the $1.25 million reported in 2017, this revenue was derived from more than three dozen active licensees of their coating technologies for medical devices in various phases of development. The company does not breakdown how much of their “Royalties and Contract revenues” is from early stage evaluation, or “Stand-still Agreements” versus “Supply and Support Agreements (License Agreements)”, or how many licensed products have received FDA marketing approval; therefore, royalty and contract revenues are difficult to forecast.
The company continues to advance its coating technologies to address other important aspects of improving medical device performance and safety, such as imparting antimicrobial properties for infection prevention and imparting cell growth enhancing properties to promote human tissue attachment to devices like orthopedic and dental implants, presumably in response to customer interest in these applications.
For instance, the company has recently performed Static Human Blood Clot Tests on Midline Catheters to demonstrate Hydromer coatings ability to prevent blood clotting on catheters, particularly a newly formulated coating named 2018-20M (4). A recent study at the University of Michigan shows insertion of a PICC line more than double the risk of dangerous blood clots in ICU and Cancer patients and that venous thrombeombolism rates continue to increase with more than 330,000 hospital admissions for this condition a year (5).
Another interesting area of recent research is in Cell Growth Enhancing Coatings, a recent white paper presentation on Hydromer’s website summarizes their cell enhancement formulas ability to promote fibroblats and endothelial cell attachment onto Nickel Titanium (NiTi), silicone, polyurethane, glass, stainless steel, PVC tubing, and “Client’s medical device’ a NiTi & Polyester Implant (6).
Cosmetics and Personal care products
The company also has several hydrogel formulations for applications in the multi-billion dollar markets of cosmetics and personal care products. The company’s AQUAMERE® is a cosmetic intermediate with water resistant film forming properties for use in hair dyes and conditioners, mascaras, eye shadows, sunscreens, and body lotions; AQUATRIX® is a cosmetic hydrogel for applications in hair shampoo and conditioners, moisturizing creams, and related products; and DERMASEAL® is a dermal barrier film product for the prevention of contact dermatitis. The amount of their current product sales into these markets can not be readily determined from their financial statements; however, the company described the reason for a $194,839 decrease in product sales as: “A significant part of that lower product sales was attributed to our Cosmetic Intermediary Product line as the company migrated toward NMP-free intermediaries for our customers, however, they have not yet fully subscribed towards that change. NMP is an environmentally unfriendly solvent and harmful to humans. The elimination of NMP in the Company’s formulations is part of its recent Sustainability approach.”
Industrial/Commercial
Additionally, Hydromer has Anti-Fog/Condensation Control coating technology that is being sold to manufacturers of greenhouse panels, refrigerator/freezer doors, industrial and medical safety and swim goggles, aircraft windows, automotive headlight assemblies, and gauge and meter covers.
Consumer Products
Finally, the company has recently received two patents covering the use of Carvacrol, a naturally occurring antimicrobial agent found in Oil of Oregano, for use in antimicrobial soaps, hand-sanatizer, and for sterilization of foodstuffs.
The Future
Hydromer Medical Coatings
In addition to Hydromer’s continued development of their coatings for anti-clotting and cell growth enhancing properties that were discussed in the Market Opportunity section above, the company has also entered a Strategic Development Agreement with N8 Medical, a private company commercializing a promising anti-microbial technology developed at Brigham Young University and granted a “Breakthrough Device Designation” by the FDA, the CeraShield Endotracheal Tube.
CeraShield® Endotracheal Tube
In June of 2012 Hydromer announced a Strategic Development Agreement with N8 Medical (10) to co-develop a new antimicrobial coating technology using Hydromer’s coating technology in combination with N8’s Ceragenins, a new class of antimicrobial agents developed at Brigham Young University designed to mimic the broad spectrum activity of the human innate immune system. The terms of the agreement were not specified in the PR or subsequent SEC filings, however, the discussion of the relationship appears to be more than Hydromer’s typical “Stand-still Agreements” and “Supply and Support Agreements” they have engage more than three dozen partners with in the past.
Then in May 2017 N8 Medical announced the FDA granted N8 Medical’s CeraShield Endotracheal Tube (ETT) a “Breakthrough Device” designation, due to the significant threat of infection intubation causes for more than four million healthcare patients in the U.S. each year (11). N8 Medical supported its filing with the FDA with recent data from the U.S. Centers for Disease Control and Prevention (CDC) demonstrating that the antimicrobial compound contained in the CeraShield™ Endotracheal Tube inhibited growth of all 100 strains of Candida auris—an emerging, highly-lethal fungal infection. Further, the May 2017 PR stated: “The CeraShield™ medical device coating technology is applicable to a broad range of medical devices commonly colonized with pathogenic bacteria and fungi, including devices for urology, vascular access, cardiology, orthopedics, and ear nose and throat (ENT), as well as other respiratory devices such as tracheostomy tubes. N8 Medical is working to pursue broad application of its CeraShield™ coating technology to create best-in-class antimicrobial medical devices designed to reduce the morbidity and, mortality and high costs and use of resources associated with hospital-acquired infections worldwide—both through independent commercialization efforts and through collaboration and partnering opportunities.”
N8 does not mention the association with Hydromer in their May 2017 PR, but does identify Hydromer as the supplier of the “optimized CeraShield hydrogel coating containing CSA-131” in a very compelling November 2017 PR (12) that goes on to state: “The optimized CeraShield™ hydrogel coatings containing CSA-131 provided controlled slow release of CSA-131, with concentrations released of less than 1ug/ml per 24 hours. The eluting CSA-131 prevented fungal and bacterial colonization of coated ETTs exposed to high inocula for up to 14 days, while uncoated ETTs had extensive biofilm growth after 24 hours. CeraShield™ coated ETTs were well tolerated in intubated pigs. The authors also found that the CeraShield™ ETTs also significantly reduced endotoxin levels.”
ClinicalTrials.gov indicates the Feasibility Study was scheduled to begin in October 2018 and conclude October 30, 2019 (13).
Carvacrol Technology
Hydromer received two patents in 2017 covering the use of Carvacrol, a potent antimicrobial constituent in Oil of Oregano. The first patent (US 2016/0067159 A1) describes the use of Carvacrol for hand sanitization. The second patent describes the use of Caracrol for use in meat sanitization (US 2016/0242428 A1). The company launched its own line of soaps and hand sanitizers under the HerbaSafe™ name and created this website that describes the benefits of their technology in these applications: http://www.hydromersoap.com/carvacrol-technology.html
Hydromer also applied this technology to their Animal Health business and developed a hand soap they Trademarked as Carvanella™ Herbal Dairy Cleaner. Although the company sold this product to Huvepharma, it is worth noting that they completed third party testing of Carvanella against “a well known Triclosan-based antibacterial soap” for Vancomycin-resistant enterococci (VRE), Methicillin-resistant Staphylococcus aureus, (MRSA), E.coli, Klibsiella Pneumonia and C. Difficile. The conclusions provided by EMSL Analytical, Inc. stated that Carvanella has strong antimicrobial effectiveness. After 30 seconds of exposure time, Carvanella significantly reduced all the bacteria tested (up to 99.95%). There were no viable bacteria detected in a control sample after 30 seconds exposure to the Carvanella with a detection limit of 10 Colony Forming Unit per mL. The Triclosan-based antibacterial soap did not show any visible antimicrobial effectiveness at 30 seconds of exposure under used testing protocol.” (EMSL final report, 02/19/2014/order N151400397)(14).
Hydromer also created a website called Hydromer Green Chemistry which features the Carvacrol technology (https://www.hydromergreen.com/products) and features it in a more business-to-business like presentation. The news section of this website features a collaboration with Fruit d’Or in July 2018 for a product called CarvaCran Naturelle that could be used to sterilize greens from Ecoli and other bacteria: https://www.hydromergreen.com/news I was compelled enough to search for the product on Fruit D’Or’s website; however the product does not appear to have reached the market.
The next news on the HydromerGreen website in August 2018 highlights their Green Chemistry & Commerce Council Award for their Carvacrol technology. Their 1st quarter report released December 7, 2018 mentions in the “Other Income” narrative description: Reducing these amounts is $15,000, in Other Income, from being named a finalist in The Green Chemistry & Commerce Council ("GC3") and InnoCentive's global greener chemistry GC3 Challenge: Developing New Preservatives for Personal Care & Household Products open innovation challenge in which the Company submitted its patented Carvacrol technology. The Company showcased its technology to the GC3 sponsors and participants which included companies such as Beiersdorf, Colgate-Palmolive, Johnson & Johnson Consumer, Procter & Gamble, Reckitt Benckiser, Symrise and Unilever. We are currently evaluating multiple partnerships and integration of our technology with various sponsors and others.
Share Structure
Common Stock - authorized 15,000,000 shares;
4,783,235 shares issued and 4,772,318 shares outstanding.
Insider Roster:
Manfred F. Dyck 1,618,376 33.9%
Dieter Heinmann 816,000 17.1%
Peter M. Von Dyck 44,552 Less than 1%
- The company has been very tight with their capital stock, for context, the number of shares of Registrant's Common Stock outstanding on September 1, 2000 was 4,598,904.
During the 2018 Annual Meeting the company did ratify a new employee stock option plan comprising a pool of 400,000 “for issuance towards employee recruitment or employee incentives”.
Competition
Hydromer's technology competes in highly competitive markets; but Hydromer has proven their ability to develop valuable technologies through their ongoing research collaborations and licensing agreements with leading medical device manufacturers.
References
1.) https://www.hydromer.com/wp-content/uploads/2020/03/Herbasafe-Sell-Sheet.jpg
2.) http://n8medical.com/2017/05/17/antidepressant-medication-come-with-dangers-studies-show/
3.) https://clinicaltrials.gov/ct2/show/study/NCT03716713
https://www.linkedin.com/feed/update/urn:li:activity:6478311334130909184
https://www.hydromer.com/medical/cell_growth_brochure.pdf
https://www.hydromer.com/press-release/2012_0626_n8.html
http://n8medical.com/2017/05/17/antidepressant-medication-come-with-dangers-studies-show/
https://clinicaltrials.gov/ct2/show/NCT03716713
http://media.ca11.uscourts.gov/opinions/unpub/files/201617734.pdf
