Bottom line is that I don't typically post on message boards but this company has got me excited.
The current share price is 0.47/share. Don't let the share price fool you. I have been following this company for almost two years and their product, while developed to be used internally during surgery, is also capable of sealing external wounds within 10 seconds of contact. The internal surgery market alone for this product was $5.5 Billion last year and expected to grow to $8 billion by 2018. The product is called AC5. While their are several other homeostatic products on the market, in preliminary testing they proved no match in comparison to AC5. One incredible key difference was that the AC5 compound continued to work even when the animals were administered commonly used blood thinners. The chemical compound of AC5 is clear and makes it easy to continue surgery while applying it to a bleed. Surgeons would no longer have to spend hours working to stop internal bleeding.. It was tested on the liver which is apparently one of the most irrational organs to stop bleeding and it clotted the bleed within 10 seconds of application. Another big reason this product could make a huge impact on internally performed surgeries. It would not only save time but money... Time is money in the operating room.
While the product has been tested internally, it has also been proven to work just as well externally. This product has the potential to seal external and internal wounds. They passed all the necessary preliminary test and have started their first human trial in Europe in February. At this time the company is only seeking regulatory approval in Europe. This approval could be completed by the end of this year... Or sooner. Per several reports I've been reading, this product might be an easier candidate for FDA approval than some, as it has been deemed a medical device and not a drug. My thoughts are that the most logical reason for not reaching out to the FDA at this time is because the company is playing it smart and trying to create a revenue stream which should give them a much more controllable equity position in the company's future. By completing regulatory approval in Europe first, they will already be receiving revenue which will provide funds for further regulatory testing and market approval. This should help shareholders avoid some risk related to share dilution as the company will not have to leverage themselves even further in public offerings by issuing warrants and more common stock. However, it should be noted that per the most recent financials Arch believes that their existing capital will only be enough to fund their operations through June of 2016. While, this is extremely important it cannot be ruled out that with a successful trial the company could get funding from other means or at least better terms of funding.
Early onset dilution in public capital markets is a prime reason why some companies don't always achieve their financial future. I think the management team is thinking long term and is working hard to produce that long term value for them and its shareholders. Some of the most successful companies in the world today were companies that grew their ability slowly instead of cashing out in public equity markets right off the bat. One in particular was Bill Gates and Microsoft. Even after the company went public, Bill gates retained 45% controlling interest in the company for years to come, which in turn created much more wealth for him and the future of his company. But back to the company at hand....
The composition of AC5 has been said to be easier to manufacture because it is made up of synthesized natural ingredients and not sourced from humans or animals. This should make for an easier transition to mass production in the future.
Another step in developing a successful company is making sure there aren't any copy cats out there waiting to steal your hard earned efforts. In reviewing their information about their patents, I believe the company has properly captured there right to process and globally market their product without much interference from competitors.
Bottom line, some of the biggest and wealthiest pharmaceutical companies operating today started with just one product or at least one good idea. The difference here is that this company has one product that could potentially encapsulate many different markets in the medical field. One market other than surgery would belong to a renowned company known as Johnson and Johnson... Bandaids could be the thing of the past. It's also been proven and tested that this formula can be used on burns and ulcers to keep them from being infected. And did I mention it's made up of basic compounds found in your skin which helps your body's cells start to repair while also creating a barrier that can fit to any shape or size.
The make up of AC5 also makes it easy to sell off the shelf as the components which make up AC5 can be stored at room temperature. This product could replace bandages as we know it... Which brings up the possibility of a large acquisition price to a company that would lose one of its largest revenue and profit streams.
I believe this company if successful in its human trials will be very valuable for years to come.
Either way... Do your own due diligence. I have 20,000 shares which accounts to $9,400... If I sell any of it, it will be because I'm young and that's a lot for me to have invested in any one company. But in all honesty I don't plan on selling any of it anytime soon because I believe this company is a winner and it could be proven sooner than later. They are doing all the right things and have a very good management team... Who by the way are continuing to purchase back company shares which in turn spells confidence for a price increase.
Company: Arch Therapeutics
Ticker Symbol: ARTH
Current Price: 0.47/ share
Outstanding Shrs: 109,600,000
Market Cap: $51,500,000
Remember the market for this product is multi-billion. Let me know what your thoughts and if I missed anything please feel free to comment back! Have a great night and good luck to us all!
