Market Overview

Stonegate Capital Partners Initiates Coverage on Oculus Innovative Sciences


DALLAS, TX / ACCESSWIRE / February 24, 2016 / Stonegate Capital Partners initiates research coverage on Oculus Innovative Sciences (NASDAQ: OCLS).

Company Description

Oculus Innovative Sciences, Inc. is a specialty pharmaceutical company that develops and markets solutions for the treatment of dermatological conditions and advanced tissue care based upon its proprietary technology Microcyn®. The Company's products, which are sold throughout the United States and internationally in 39 countries, have improved outcomes for more than five million patients globally by reducing infections, itching, pain, scarring, and harmful inflammatory responses. The Company's headquarters are in Petaluma, California, with manufacturing operations in the United States and Latin America. European marketing and sales are headquartered in Roermond, Netherlands.


As part of this notable turnaround story, Oculus continues to expand domestically and abroad, capturing greater share of the US dermatology market and executing upon its revamped long-term strategic plan put in place mid-2014.

- The dermatology market offers tremendous upside potential. Within dermatology, the Company is initially targeting atopic dermatitis, which is expected to grow to $810 million by 2016; also, it launched a new scar treatment to support the approximately 42 million surgical skin procedures that are performed in the US per year, with many patients experiencing hypertrophic scarring and keloids after those surgical procedures.

- The Company has launched six dermatology products to date and has the stated goal of launching one new dermatology product per quarter in 2016.

- OCLS created a new direct sales force in 2014 with 14 sales representatives initially. Currently, the Company has 19 representatives and plans to add more both to support the launch of new products and to increase market share for those currently in the bags.

- OCLS products are sold throughout the US and the world, and have treated more than 5M patients globally to reduce infection, itch, pain, scarring, and harmful inflammatory responses; the products are based on the technology Microcyn®, a non-irritating, shelf-stable solution containing oxychlorine compound with an established safety profile.

- The Company is growing abroad through its relationships with its distributors. Approximately 70% of its revenue comes from sales internationally. It has made a concerted effort to engage strong partners internationally, which has yielded strong unit growth.

- The dermatology market benefits from having shorter development time, lower clinical trial costs and regulatory hurdles, and greater pricing power. The Company doubled product prices in October 2015 and still continues to be the low cost provider.

- As of January 2015, the Company reported 45 issued patents related to its unique Microcyn® technology, seven of which are in the US, and the remaining ones have been issued in the EU, Canada, and Japan. Also, it has 82 patent applications pending in the US and worldwide.

- In 2015 Oculus signed a new animal healthcare partner, SLA Brands, to grow its animal healthcare business, and just recently, the Company announced the launch of two new MicrocynAH® dermatology products for animals - an anti-itch spray gel and a spray gel for hot spots.

- As most recently reported, Oculus has an approximate $15.3M annualized revenue run rate, with $6.1M in cash on hand and no debt.

On an EV/R basis, OCLS currently trades at 0.7x vs. the median of its peers at 6.8x based on estimates for the next twelve months. In addition, companies in the dermatology space have been acquired at a median EV/R multiple of 3.6x vs the Company's current multiple of 0.7x. See pages 8 - 9 for further details.

The full report can be accessed by clicking the following link:

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high quality investment opportunities.

SOURCE: Stonegate Capital Partners

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