Zomedica Stock

Zomedica Corp. (Zomedica) operates as an animal health company. The company focuses on meeting the clinical needs of small animal and equine veterinarians in ways that promote both improved patient care and practice economics.

The company’s focus is on its veterinarian customer and the pets that they treat. The company intents is to leverage this infrastructure and commercial capability to continue to grow its existing products, launch new products and acquire new products to market to veterinarians and pet parents through their preferred method of purchasing, to provide a straightforward pathway to profitability for the company as expeditiously as possible.

The company is commercializing four product lines, consisting of diagnostic and therapeutic products, that meet its objectives of improving the quality of care for the pet.

Diagnostic Products

The company’s TRUFORMA Bulk Acoustic Wave (BAW) point of care diagnostic platform is marketed with full diagnostic and thyroid panels for dogs and cats that include the only assays of these types available at the point of care to test for feline optimized TSH, endogenous ACTH, Free T4, and quantitative cortisol, along with a total T4 assay. The company is continuing to invest in the development of additional assays which will increase the utility of the TRUFORMA platform for its customers over time, including planned assays for non-infectious gastrointestinal disease and its first assays for horses for the diagnosis of equine Cushing’s disease.

The VetGuardian zero-touch vital signs remote monitoring system, launched in January 2023 in collaboration with Structured Medical Products, enables contact-free, continuous monitoring of pets' vital signs, including temperature, pulse, and respiration (TPR) without harnesses or wired leads on the pet, thus allowing pet patients to rest comfortably during recovery at veterinary facilities. Veterinarians receive real-time notifications should the vital signs fall outside their customizable range, and they can remotely observe patient data from anywhere via a smart device.

Therapeutic Products

The company’s PulseVet electrohydraulic shockwave therapy platform, acquired in 2021, utilizes sound waves to treat a variety of musculoskeletal conditions in horses and small animals, including tendon and ligament injuries, difficult to heal wounds, osteoarthritis, and more. Historically, this treatment has been used primarily to treat horses, but since the introduction of the X-trode handpiece enabling it to be used without the need for sedation, is being marketed to small animal veterinarians.

The company’s Assisi Loop line of products, acquired in July of 2022, including the Assisi Loop, Assisi Loop Lounge, and DentaLoop devices, treat pain and inflammation through delivery of targeted pulsed electromagnetic field focused energy (tPEMF). The company’s Assisi Calmer Canine devices utilize tPEMF to treat separation anxiety in small animals. These products are marketed through traditional animal health distributors, online animal product retailers and animal health retail outlets.

Product Portfolio

Diagnostic Products

TRUFORMA Platform

The company’s TRUFORMA platform utilizes patented Bulk Acoustic Wave (BAW) technology to provide a non-optical and fluorescence free system for the detection of disease at the point of care. The BAW technology enables the company to develop unique assays that allow for precise and repeatable testing of companion animals at the point-of-care with results provided within 20 minutes.

The company’s strategic focus with this platform is to build an extensive installed base of customers utilizing the TRUFORMA instrument with its existing assays and develop and launch new assays. The company is marketing its diagnostic instrument and related assays for TSH - canine and feline, the only feline optimized assay available at the point of care; total T4 - canine and feline; free T4 - canine, the only Free T4 assay available at the point of care ; eACTH – canine, the only endogenous ACTH available at the point of care; and Cortisol (Quantitative) - canine, the only quantitative cortisol assay available at the point of care.

The company intends to continue developing new assays for the TRUFORMA platform.

Qorvo is also developing the company’s first equine assay, for endogenous ACTH, to screen for equine Cushing’s disease.

In addition to the assays being completed by Qorvo, the company has acquired a license from Qorvo to develop TRUFORMA assays on its own, and it intends to build a robust pipeline of assays during 2023 that will see completion and launch in 2024.

TRUVIEW Digital Microscopy Platform

As part of its acquisition of the assets of Revo Squared in June of 2022, the company acquired rights to the MicroView digital microscopy platform in development which it has rebranded as the TRUVIEW system. This technology features a cutting-edge liquid lens imaging platform to provide best in class microscopic images, while incorporating proprietary automated slide preparation technology, which will both reduce staff time needed to prepare slides and also significantly reduce the number of slides that fail to provide a diagnostic image due to suboptimal slide manual slide preparation.

The company’s proprietary TRUVIEW platform, which is planned to launch in the first half of 2023, is intended to assist with a clinic’s critical slide prep needs in a number of ways, including:

Freeing up the veterinary technician, who traditionally would have invested 10 minutes or more in preparing a slide to capture digital images for pathologic diagnosis;

Providing consistent automated preparation to help reduce errors that make an accurate diagnosis difficult; and

Improving workflow and allowing more economic control by providing flexibility to the veterinarian in either using the microscope to interpret the slides themselves, or if they choose, sending the images out digitally to be read by one of the company’s contract pathologists.

TRUSOUND Ultrasound

In addition, and as part of its acquisition of the assets of Revo Squared in June of 2022, the company acquired a line of digital ultrasound products that offer remote training and coaching (via telemedicine). The company intends to rebrand these products as TRUSOUND Ultrasound to its customers in the United States. The company plans to continue offering ultrasound equipment through its field sales team and will leverage internal and external ultrasound experts to continue to offer telemedicine consultation and ultrasound training to its customers.

VetGuardian Zero-Touch Vital Signs Remote Monitoring Platform

As part of a distribution agreement entered in January of 2023, the company acquired the non-exclusive rights to distribute and commercialize the VetGuardian zero-touch vital signs remote monitoring system. This system enables contact-free, continuous monitoring of pets' vital signs, including temperature, pulse, and respiration (TPR). With its patented doppler technology, the VetGuardian monitor can capture vital signs in real time without harnesses or wired leads on the pet, thus allowing pet patients to rest comfortably during recovery at veterinary facilities. The system is easily set up by clinic staff and connected to the cloud using a smartphone app, after which monitoring of multiple monitors on a single screen is enabled by connecting to the MyZomedica web portal. Veterinarians receive real-time notifications should the vital signs fall outside their customizable range, and they can remotely observe patient data from anywhere via a smart device.

Therapeutic Products

PulseVet Electrohydraulic Shock Wave Platform

The company’s PulseVet products utilize electrohydraulic shock wave generation technology in which a submerged high voltage spark gap is used to generate an expansive plasma bubble in front of a focusing reflector. The resultant high pressure acoustic energy wave is directed and focused into the treatment animal to induce therapeutic healing effects.

The PulseVet business reflects a ‘razor/razor-blade’ model in which the consumables are required to be refurbished after approximately 50 procedures. Customers purchase a ProPulse generator unit, as well as one or more handheld therapy delivery devices called Trodes. Each Trode has a defined duty cycle of 50,000 individual pulses, which will deliver approximately 50 therapy sessions depending on how many pulses the veterinarian prescribes for a particular treatment session. Once a Trode has reached the end of its duty cycle, the customer returns the unit to the company, where it is refurbished and resold.

PulseVet shock wave therapy systems can treat a broad range of musculoskeletal issues, such as bone healing, tendonitis, torn ligaments, osteoarthritic and degenerative joint disease, including back and neck pain, and difficult to heal wounds, such as a lick granuloma. As it has developed the PulseVet technology, the number of indications has increased, and the company intends to continue investing in the development of new indications in the future.

In September of 2021, Pulse Veterinary Technologies introduced the X-Trode, a new handpiece which eliminates the need for sedating small animal patients in most cases. The company has increased its focus on selling PulseVet products to small animal customers and have seen encouraging adoption in this market in 2022. PulseVet products are used actively in approximately half of equine practices in the U.S.

The company is conducting several clinical studies of shock wave therapy, including:

a study designed to measure efficacy in treating osteoarthritis (OA) in small animals with the X-Trode. Animals are randomly divided into two groups, with and without shock wave treatment, and are be monitored for pain, functionality, and disease progression for 12 months. This study began in the third quarter of 2022 and data collection is expected to be completed two to three years after commencement; and

a study designed to measure safety and efficacy in treating pulmonary disease in horses. Historically, shock wave therapy has not been applied to the lungs. However, recent studies by independent equine veterinarians have shown that the lungs can be treated safely. Based on this early research, Zomedica is sponsoring an additional study to more fully evaluate this new indication. This study is examining the effect of shock wave therapy on exercise induced pulmonary hemorrhage in horses. This study began in the fourth quarter of 2022 and data collection is expected to be completed one year after commencement.

The company is also participating in studies that are being conducted by independent investigators, including:

a randomized, double blinded, cross­over study of 24 dogs that previously had Tibial Plateau Leveling Osteotomy (TPLO) surgery and is presenting with OA. The animals will be treated with shock wave therapy and monitored for pain and functionality for 12 months. This study began in the first quarter of 2022 and data collection is expected two years after commencement; and

a study to document small animal tolerance of the X -Trode vs. the traditional trode. This study is examining pain caused by treatment with the X -Trode compared to a traditional trode in dogs without sedation. This study began in the first quarter of 2021.Data collection is now complete and data analysis is in progress.

Assisi targeted Pulsed Electromagnetic Field Therapy (tPEMF) line of products.

The company’s Assisi products, including the Assisi Loop, Assisi Loop Lounge, and DentaLoop devices, treat pain and inflammation through delivery of targeted pulsed electromagnetic field focused energy (tPEMF). The company’s Assisi Calmer Canine devices utilize tPEMF to treat separation anxiety in small animals.

Targeted Pulsed Electromagnetic Field (tPEMF) therapy delivers a micro-current to damaged tissue that is precisely tuned to trigger an animal’s own natural anti-inflammatory process. The electromagnetic signal, which is one-one-thousandth the strength of a cell phone, stimulates cellular repair by upregulating the body’s own production of endogenous nitric oxide (NO).

The biological effect of that induced current is the functional therapeutic component of tPEMF technology. Enhancing nitric oxide, the body’s own anti-inflammatory molecule, has several biotherapeutic effects depending on the target tissue and the specific characteristics of the tPEMF waveform used.

The company commercializes the Assisi tPEMF products primarily to its network of 4,000 veterinarians. The company also offers the products for sale through numerous channels, including for sale on its own website to both veterinarians and pet owners, through traditional veterinary distributors, such as MWI, Midwest Veterinary Supply, and others, and through online retail channels, such as Amazon.

License Agreements

TRUFORMA Platform

In November of 2018, the company entered into a development and supply agreement with Qorvo, focused on bringing their piezo-electric BAW sensor to the veterinary health sector. Under the terms of this agreement, the company had exclusive global rights to develop and market Qorvo's investigational point-of-care diagnostic platform for veterinary use during the term. Under that agreement, the company jointly collaborated with Qorvo on the development of its TRUFORMA instrument and related diagnostic assays.

In January of 2023, the company entered into new agreements with Qorvo. The agreements include a worldwide exclusive license agreement, a transition services agreement, and a BAW sensor supply agreement. Collectively, these agreements expand the company’s rights and responsibilities for the TRUFORMA product line.

The company also entered into a new BAW sensor supply agreement with Qorvo. This agreement allows Zomedica to purchase Qorvo’s proprietary BAW sensors for use in the TRUFORMA instrument. It also provides for exclusivity provisions such that Qorvo will not sell BAW sensors for use in a diagnostic product in the animal health sector during the term of its supply agreement.

PulseVet Platform

The technology used in the company’s PulseVet products is licensed to it pursuant to a license agreement with SANUWAVE, Inc. Under the license agreement, the company has a worldwide, exclusive license under specified patents to develop and commercialize products in the veterinary field. In 2019, the license was converted to a worldwide, irrevocable and perpetual, exclusive license in exchange for a one-time payment.

Assisi Loop Platform

The technology used in the company’s Assisi Loop product line is licensed to it pursuant to an amended license agreement from 2016 with Rio Grande Neurosciences Inc, a Delaware Corporation. Under this license agreement, it has a worldwide, exclusive license under specified patents to develop and commercialize products in the veterinary field. The license agreement has been paid for in full and no future royalties or milestone payments are owed.

Research and Development

The company’s research and development expenses were $2,578 for the year ended December 31, 2022.

Sales and Marketing

The company markets its products in the U.S. through use of its own sales force, which includes 35 sales representatives, including inside sales, Professional Services Veterinarians, Sales Directors, and its Vice President of Sales as of December 31, 2022.

While its products are generally sold directly to veterinary professionals or through on-line orders, the company also uses third party distributors in the U.S., particularly for the Assisi Loop product line, and anticipate leveraging U.S. distributors for more of its products in the future.

The company’s TRUFORMA platform strategy is to build an installed base of instruments through its Customer Appreciation Program (CAP) in order to drive demand for its assays, and to bring new assays to market as rapidly as possible, both to increase revenue and to build the value proposition for the TRUFORMA instrument.

As a part of the Revo Squared asset acquisition, the company acquired a line of digital ultrasound products with remote training and coaching (via telemedicine). The company offers these products to its customers in the United States, through both its field sales team and its inside sales team. The company plans to continue offering ultrasound equipment through its field sales team and will leverage internal and external ultrasound experts to continue to offer telemedicine consultation and ultrasound training to its customers.

The company’s PulseVet platform is sold directly to equine and small animal veterinarians in the U.S. and to Equine veterinarians in Japan through a wholly owned subsidiary. Outside the United States and Japan, the company sells PulseVet products primarily through a network of distributors.

PulseVet products have traditionally been widely adopted in the equine market but had limited adoption in the small animal market due to the need to sedate small animals to comfortably provide treatments. In September of 2021 the PulseVet companies launched the X-Trode product for use in the small animal market. The X-Trode will significantly expand the market opportunity for the use of shock wave technology because small animal veterinarians will no longer need to sedate an animal in order to provide a comfortable treatment.

The company’s Assisi Loop product line includes the Loop Lounge line of reusable treatment beds, the DentaLoop for pain and inflammation of the teeth and gums, and the Calmer Canine product for separation anxiety. The company commercializes these products to veterinarians and end users alike through three channels: it sells these products on its own website to both Veterinarians and pet owners, it sells through traditional veterinary distributors, such as MWI, Midwest Veterinary Supply and others, and it sells through retail channels, such as Amazon.

The company provides a product warranty to customers in the event of defects in its products. The warranty period can vary from 12 months to 24 months and covers the cost of shipping a temporary unit while the customer's unit is being serviced.

Manufacturing

PulseVet Platform

Palladium, a precious metal that is a key component in the production of the company’s Trodes, is heavily mined and sourced from Russia and Ukraine.

TRUFORMA Platform

TRUFORMA cartridges and instruments are manufactured by Qorvo, then shipped to the company’s Roswell facility for distribution. Under the restructured TRUFORMA agreements, Qorvo will support the transition of instrument manufacturing from their contract manufacturer, and cartridge manufacturing from their facility in Plymouth, MN to its Roswell, GA facility. They will be compensated at an hourly rate for these transition services until the company assumes instrument and cartridge manufacturing responsibility, estimated to take place no later than the first half of 2024.

Assisi Products

The Assisi line of products is manufactured by two contract manufacturing organizations, ADM Tronics Unlimited, LLC in New Jersey and Evolve Manufacturing Technologies in California. Final packaging and shipping are currently provided by the Wheelership, LLC in New Jersey. Distribution of Assisi products will transition to the company’s Roswell facility in 2023.

TRUVIEW Digital Microscopy

The company anticipates manufacturing, warehousing, and shipping the TRUVIEW digital microscopy system at its Roswell, Georgia manufacturing facility beginning in the first half of 2023.

Intellectual Property

The company’s TRUFORMA instrument and the related assays, as well as its PulseVet technology are dependent on intellectual property developed by its strategic partners and licensed to it.

The company owns two issued U.S. patents and have filed one additional U.S. patent application, in addition, it has filed two Patent Cooperation Treaty (PCT) applications for international protection.

The company acquired a portfolio of five U.S. patents, including one PCT and two continuation patents, together with sixteen foreign patent and patent applications for the Assisi Loop and Assisi Calmer Canine products. Following the acquisition of the Revo Squared assets, the company expanded the original U.S. patent application by filing five continuation applications and also filed an additional four U.S. patent applications to cover the TRUVIEW microscope.

Competition

In the shock-wave market, the company faces competition from laser devices offered by entities, such as Companion Animal Health, a division of LiteCure, LLC, Respond Systems Incorporated and Summus Medical Laser, LLC. Additionally, ELvation Medical GmbH markets a Piezo Shockwave system that competes with the PulseVet products and is sourced from Karl Storz in Germany.

Assisi faces competition from Respond Systems Incorporated, which manufactures a line of Pulsed Electro Magnetic Therapy products, primarily in a bed format which most closely compares to the Assisi Loop Lounge line of products.

History

The company was formerly known as Zomedica Pharmaceuticals Corp. and changed its name to Zomedica Corp. in 2020.