Medical Products Companies Tap Into $50 Billion U.S. Government GSA Supply Program

REDONDO BEACH, CA / ACCESSWIRE / March 16, 2016 / Last week, BioLargo, Inc. (OTC: BLGO), best known for the AOS Filter that has demonstrated the highest impact and lowest cost of any known water treatment technology, announced that the U.S. government had awarded them a five-year General Services Administration and VA Schedule supply contract, under schedule 65IIA for medical equipment and supplies. This contract award is significant because it opens up an important selling channel for the company's current odor and moisture control products as well as future products that will include its Advanced Wound Care Products when they are approved by the FDA. The GSA Schedules program is the premier acquisition vehicle in government with approximately $50 Billion a year in spending for a broad spectrum of products.

In January, BioLargo announced that its Clyra Medical Division closed a $5.75 million financing to take its novel Advanced Wound Care products through the short FDA 510K approval pathway and to launch those products for commercial sales targeting early 2017. Estimates for the size of the U.S. market for wound care range from as low as $6 billion to as high as $25 billion. The opportunity to sell through the GSA and VA Schedules programs could be a substantial addition to the private sector commercial market.

A 510K regulatory approval, based on there being a predicate device in the market, is considerably faster than the more traditional New Drug or De Novo FDA pathways. EMERGO, a leading consultant shepherding 510K's through the FDA process finds that the average time in 2015 for gaining a 510K approval was between 6 and 9 months.

"Obtaining status on the GSA and VA schedules are a significant accomplishment, and provides us significant opportunity to sell to the U.S. government," said Odor-No-More President, Joe Provenzano. "All of the products that we currently offer the Defense Logistics Agency (DLA) through DIBBS and Military Medical Facilities (MMF) through the DAPA will now be available through GSA Advantage and the VA FSS Schedule."

Dennis P. Calvert, President and CEO of BioLargo, added, "Securing this GSA award is the culmination of more than 18 months of work. Now that we've been accepted into this selling channel, we intend to add more products, including those from our Clyra Medical subsidiary when they are ready for market."

The CDC tells us that each year there are over 1.7 million hospital acquired infections resulting in more than 100,000 deaths. Reducing infections in wound care could result in significantly fewer deaths as well as a reduction in government healthcare spending that is estimated by the CDC to be close to $20 billion annually. An article published by the U.S. National Library of Medicine, "Human Skin Wounds: A Major and Snowballing Threat to Public Health and the Economy" details the acute need for more effective Advanced Wound Care.

Early formulations of CLYRA's antimicrobial hydrogel and liquid wound cleanser products have passed rigorous third party laboratory testing validating both efficacy and safety. Independent testing has verified both rapid and effective control against a host of dangerous pathogens commonly encountered in the wound care field. Testing of the company's liquid formula verified efficacy against antimicrobial resistant species referred to by the CDC as the "ESKAPE" pathogens - enterococcus faecium (VRE), staphylococcus aureus (MRSA), klebsiella species, acinetobacter baumannii, pseudomonas aeruginosa, and enterobacter.

The business of Wound Care is fragmented with several dozen companies competing for a share of this fast growing market. Following are a few companies that can also benefit from GSA Supply contracts.

Smith & Nephew (NYSE:SNN) is one of the current leaders in Wound Care and offers a wide range of products for the treatment of acute and chronic wounds, including leg, diabetic and pressure ulcers, burns, and post-operative wounds. The company also provides traditional and single-use negative pressure wound therapy and hydrosurgery systems; and biologics and other bioactive technology products for debridement and dermal repair/regeneration. The company primarily serves the providers of medical and surgical treatments and services. Smith & Nephew reported annual sales of $4.6 billion for the year ending December 2015.

Alliqua BioMedical, Inc. (NASDAQ: ALQA), provides wound care solutions. The company offers Extracellular Matrix, a suite of advanced wound management products; Biovance, a decellularized and dehydrated allograft for the management of non-infected partial-and full-thickness wounds; SilverSeal, a hydrogel wound dressing with silver coated fibers; and Hydress, an over-the-counter hydrogel wound dressing. It also provides contact dressings, island dressings, and wraps using TheraBond 3D antimicrobial barrier systems. In addition, the company offers Sorbion sachet S, a primary dressing for exudating wounds, such as surgical wounds, venous leg ulcers, and diabetic ulcers; Sorbion sana, a primary wound dressing that provides an another form of wound treatment; and products with hydrokinetic fibers as primary dressings.

Alliqua reported 2015 revenues of $15 million up 300% from $5 million the year before indicating very strong growth, but still far from having any significant impact on overall wound care. Offering Alliqua products through a GSA program could greatly enhance sales.

Derma Sciences (NASDAQ: DSCI) provides products for the management of acute and chronic wounds, and burns. Their portfolio provides a broad product line including MEDIHONEY(R), XTRASORB(R), BIOGUARD(R), ALGICELL(R) Ag, TCC-EZ(R), AMNIOEXCEL(R), and AMNIOMATRIX(R). Derma Science's products are intended to help advance healing for patients suffering from complex chronic or acute wounds such as diabetic foot ulcers, venous leg ulcers, pressure ulcers and burns. Derma Sciences reported sales of $84 million for the year ending December 2015 and offered guidance of slightly better than flat revenues for 2015. Annual sales of $84 million in a $6 billion market though respectable, indicate the absence of a breakthrough product as of yet.

Vericel Corporation (NASDAQ: VCEL) is a stem cell company developing patient-specific expanded cellular therapies for use in the treatment of patients with severe diseases and conditions. It markets two autologous cell therapy products in the United States, including Carticel (autologous cultured chondrocytes), an autologous chondrocyte implant for the treatment of cartilage defects in the knee; and Epicel (cultured epidermal autografts), a permanent skin replacement for the treatment of patients with deep-dermal or full-thickness burns comprising greater than or equal to 30 percent of total body surface area. Vericel reported annual revenues of $29 million for the year ending December 2014 and has the potential to greatly increase sales through the opening of a GSA channel.

Wound Care is a big story for Vericel, but an even bigger story is that the company has been developing a treatment for heart disease that recently sent shares rocketing on news that their Phase II clinical trial for heart disease successfully met its endpoints. Investors will be watching closely for upcoming news.

Vericel is not alone with a big story beyond wound care. BioLargo's technology portfolio also expands well beyond its novel products for the $6 billion wound care industry. BioLargo's AOS Filter has been demonstrated to be the highest impact, lowest cost water treatment technology known, with the potential to impact the entire $350 billion water treatment industry. The company's technology also includes unsurpassed odor control technology (www.cupridyne.com) that has the potential to garner a significant portion of the multi-billion dollar industrial odor control market.

Frost & Sullivan recently announced their award to Biolargo for the 2015 North American Frost & Sullivan Award for New Product Innovation. The revolutionary, patented AOS Filter combines iodine, water filter materials and electrolysis within a water filter device to provide significant cost-benefits and efficacy improvements over existing technologies. BioLargo, Inc., the parent company, has already developed a comprehensive patent estate and it is expanding.

"The AOS Filter generates high levels of oxidation potential across surfaces within the device by converting a typical carbon matrix filter into an electrochemical reactor," said Frost & Sullivan Senior Industry Analyst, Seth Cutler. "This amplification of the oxidation potential of iodine, a key natural disinfectant, creates different and powerful forms of iodine, greatly enhancing its efficacy."

BioLargo is executing its business plan to commercialize a plethora of novel and superior products to serve very large markets beginning in 2016. The path to commercialization has been accelerating since August 17, 2015 when a team of researchers at the University of Alberta unveiled the AOS Filter and revealed that it disinfects contaminated water 100 times better and ten times faster than chlorine based products that are the industry standard. Equally remarkable is that the operating cost is only 1/20th of the closest competing technology based on its extremely low energy requirements.

Since the University symposium in August last year, BioLargo has gained additional grants to advance the commercialization of its products and expanded its staff for R&D. It received the go ahead to organize its first commercial pilot in the poultry processing industry and has benefited from over $1 million in new capital infusion. It has increased its professional staff and reports that it has begun multiple discussions with potential strategic partners. The company received the Frost & Sullivan 2015 Award for Product Innovation, was awarded the GSA - VA Supply Contract, and closed $5.75 million in financing to advance and commercialize its novel wound care products. The company has also hinted that an exciting new industrial market is developing for the company's odor control products.

The need for Advanced Wound Care is growing fast and companies in this space have the opportunity to carve out a significant portion of a large market if their products are superior and cost-effective and especially if they can garner a significant sales increase from selling their products to the government through the GSA Schedules program.

For more information visit the company's website at: http://biolargo.com

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SOURCE: Emerging Growth LLC

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