TheraBiogen (TRAB) Approaches Revenue Tipping Point
TheraBiogen Inc. (OTCBB: TRAB) is a manufacturer and distributor of homeopathic nasal sprays designed to combat cold, flu and allergy symptoms. Unlike other over-the-counter providers, like Pfizer Inc. (NYSE: PFE) or Johnson & Johnson (NYSE: JNJ), the company’s products have a very efficient nasal drug delivery method that has no direct competitors.
Key Highlights
Nasal Delivery Enhances Efficacy. TheraBiogen’s unique nasal delivery platform offers higher efficacy than orally-taken medications, according to a recent study.
Near-term Revenues Provide Catalyst. TheraBiogen has already begun reporting revenues last quarter and could reach a cash flow breakeven point by next year.
A Great Investment Opportunity. TheraBiogen appears to be significantly undervalued given the potential for its four nasally-delivered homeopathic products.
Nasal Delivery Enhances Efficacy
In mid-2008, TheraBiogen entered into a 25-year exclusive license agreement with Nasal Therapeutics Inc. to develop, manufacture, market and sell four homeopathic nasal sprays, THERA MAX® Cold Relief, THERA MAX® Flu Relief, THERA MAX® Allergy Relief and THERA MAX® Migraine Relief. Combined, these four products target enormous markets with no direct competition.
According to a study published in Antiviral Chemistry & Chemotherapy 2011, THERA MAX® was found to inhibit viral CPE by 50% at a 1:20 dilution for seven of the eight virus strains. The treatment’s unique nasal delivery method also produced a direct effect that could be assimilated instantly. On the contrary, orally-taken medications took significantly longer to show signs of efficacy.
Near-term Revenues on the Horizon
TheraBiogen started generating revenues during the second quarter of 2011, but the real results will appear over the coming quarters. With several large partnerships in the works, the company anticipates being in a strong position for the Fall season and could reach a positive cash flow by next year. Meanwhile, its anticipated 65% margins could yield a very strong stock.
The company also has limited additional funding requirements as it ramps up its sales. While non-cash charges may take a toll, the company could breakeven on a cash flow basis with just $1-1.5 million in revenues. And looking forward, the company will be able to quickly introduce new products, including its migraine product, with very little additional capital expenditures.
A Great Investment Opportunity
TheraBiogen is targeting enormous end markets with its four lead products. According to DataMonitor, the U.S. OTC pharmaceutical market is forecast to reach $31.86 billion by 2014, representing 15.7% annualized growth since 2009. Within this market, the cough and cold preparations is the single largest segment with an estimated 21.8% market share.
