SNES: Opportunities As Municipalities Reopen

NASDAQ:SNES

Reopening of eateries and refocused efforts to curb rat populations imply expansion opportunities for SenesTech's ContraPest

SenesTech, Inc. SNES is working with the District of Columbia to proactively curb new rat infestations. As the District of Columbia contemplates the reopening of eateries and public spaces where food is consumed, it must refocus its efforts to contain the rat population. During the COVID-19 crisis, when restaurants and other venues were closed to the dine-in trade, the rat population dispersed to an expanded foraging range. We would expect rodents to return to traditional sites as restaurants and other food establishments resume operations. It is therefore critical to interrupt the migration before an infestation occurs.

District of Columbia: Rapid-Scale ContraPest Deployment

Multi-month pilot program shows ContraPest efficacy in reducing rat populations in DC Health's integrated pest management program

The District of Columbia will rapidly scale deployment of SenesTech's ContraPest product. This decision follows a multi-month pilot program in which ContraPest showed efficacy in reducing rat populations, in conjunction with an integrated pest management program deployed by DC Health.

In fact, a four month study showed a decline of from 51% to 88% in the rat population when ContraPest was deployed. Moreover, the data also suggests a sharp drop in the juvenile rat population, which is an early sign that fertility control is progressing. These are key factors convincing the District of Columbia to dramatically increase its use of the ContraPest contraceptive.

SenesTech: Attractive Recurring Revenue Model

By controlling fertility in rats, studies have shown that ContraPest contributes to the above-noted up to nearly 90% decrease in rat populations. Thus, when used in conjunction with conventional rat poisons, integrated pest control programs can maintain the rat population at substantially reduced levels. Continued treatment is necessary in order to keep the rat count at the constrained lower level on an ongoing basis. In turn, this can produce an attractive recurring revenue model for SenesTech.

Moreover, because fewer bait boxes are needed as the rat population is reduced, the cost of continuing maintenance treatment also declines. This is an important component of the cost-benefit analysis of using ContraPest.

In the District of Columbia, SenesTech will supply the market with about 4,500 tanks of ContraPest. Pestmaster Services, a local pest management company that is SenesTech's distributor in this market, will provide storage and has also offered deployment assistance services.

Company Outreach To Municipalities As Economies Reopen

The District of Columbia is one of many markets launching plans to reopen local eateries in some phase of their overall economic reopening. As an early adopter of ContraPest, DC Health has seen first-hand through its pilot that ContraPest helps control the risk of a new infestation. SenesTech has also launched a broad educational campaign, reaching out to more than 70 municipalities to inform and educate them on the benefits of fertility control using ContraPest, as they prepare to resume normal operations of food establishments. At the same time, the CDC has warned cities and municipalities about the dangers of increased rodent populations as commercial activity resumes.

Separately, we also are likely to see a decrease in SenesTech's operating expenses, reflecting cost-cutting measures the company adopted during the COVID-19 crisis.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer HERE.