Innovus Pharmaceuticals Inc. (fka INNV)

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Innovus (INNV) Beyond Human Platform, Reaching Between 20-30 Million People On A Monthly Basis, Propels High Margin Sales

http://analysis.secfilings.com/articles/66-innovus-innv-beyond-human-platform-reaching-between-20-30-million-people-on-a-monthly-basis-propels-high-margin-sales

By RYAN ALLWAY
September 19, 2016 1:23 pm ET

Innovus Pharmaceuticals Inc. (OTCQB: INNV) acquired Beyond Human LLC in February for $630,000 in cash and the deal is already paying big dividends. During the second quarter, the company reported a 455% increase in revenue to a record $1 million with $256,000 in operating cash flow. Management stated that the company is on track to reach $5 million in revenue for the full year of 2016 – and that doesn’t include any revenues from FlutiCare™ or other high-profile upcoming product launches.

In this article, we will take a closer look at why Beyond Human has become the cornerstone for the company’s ongoing success and why investors should take a closer look at the stock.

Acquiring More than Products

Innovus Pharmaceuticals gained more than just a handful of successful products with the acquisition of Beyond Human – they gained access to a print media network reaching between 20-30 million people on a monthly basis in the U.S. Innovus also gained a very large number of online email subscribers, pushing the company's total number of subscribers to about 1.5 million people.

The company’s marketing team develops editorial content that is pushed through the platform’s distribution channels to drive inbound sales calls. A 75-person call center takes care of inbound sales and upsells customers on additional products. For example, a person that calls to purchase the Beyond Human Testosterone Booster might also order Vesele®, since it’s a complementary product for that particular demographic.

Vesele® is a great example of why the marketing platform has become so important to Innovus Pharma. After acquiring the product from Trophikos for $40,000 in 2014, the company re-launched the product on the Beyond Human platform and has already generated the bulk of the $1M reported in Q2 2016 along with the testosterone booster product. These revenues also contributed to higher profit margins of 68% in 2016 compared to 58% in 2015 since there are fewer overhead costs and third parties involved in the sales process. The company announced the launch of a third product, RecalMax™, on the same platform few weeks ago and per the company’s presentation at the Rodman & Renshaw Conference in New York on September 12, 2016, the product is selling very well and is on track to being another large product for Innovus.

Platform for Future Growth

Innovus Pharmaceuticals plans to launch several new products using the Beyond Human platform over the coming quarters. Moreover, these product launches have not been factored into management’s $5 million 2016 revenue projection.

CEO Dr. Bassam Damaj indicated that the company plans on launching Sensum+® for penile sensitivity and Xyralid® for hemorrhoids throughout the remainder of the year in its second quarter conference call. Management anticipates that these two products will add an additional $3 million to $4 million in revenue on a yearly basis provided that they are successfully launched on the Beyond Human platform.

The company also has not factored in the potential approval and launch of FlutiCare™ as an over-the-counter treatment for non-allergic rhinitis – or stuffy nose. With over 50 million American affected by the condition each year and 70% of those using over-the-counter products dissatisfied, there’s an enormous opportunity for the #1 form of the prescribed nasal steroid to make a big splash in the OTC market.

FlutiCare™ could be marketed through the same Beyond Human platform in order to increase sales and improve margins by adding to the traditional retail route as the demographic and the people targeted with the platform are unique and differ from the traditional people who shop from the usual retail stores. The combination of 70%+ gross margins and a massive market size – as suggested by the competitor Flonase’s blockbuster status – could translate to significant shareholder value creation over the coming years.

Looking Ahead

Innovus Pharmaceuticals projects earnings $5 million in 2016 based on its existing launched product lines. If management is successful in launching two new products, these revenues could expand by around $1 million in the remainder of the year. The approval of FlutiCare™ could further expand these revenues if it were commercialized before year-end. And, all of these products benefit from distribution on the well-established Beyond Human platform.

The company’s stock trades with a market capitalization of just $21 million, according to OTC Markets. This would put its price-sales ratio at just 4x – less than many competitors in the space – with a significant double- to triple-digit growth rate. Investors may want to take a closer look at the stock given this potential, as well as the numerous upcoming catalysts in the form of a possible ANDA approval for FlutiCare™ and upcoming product launches.

For more information, visit the company’s website at www.innovuspharma.com.