|
OxySure® Systems, Inc. (OTCBB: OXYS) |
|
|
October 15, 2012 Issue |
||
|
The Most Powerful Name In Corporate News and Information |
||
|
As Pioneers of an FDA Approved Oxygen On Demand Device that Requires No Tanks or Prior Oxygen Storage, OxySure® Systems, Inc. is filling a Huge Need in the Medical Emergency Market with 200 ‘Saves’ already Since 2008 |
||
|
Chairman
& CEO |
Healthcare
(OTCBB:
OXYS) OxySure® Systems, Inc. 10880 John W. Elliott Drive, Suite 600 Frisco, TX 75034
972-294-6450 |
|
|
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – October 15, 2012
Mr. Ross: OxySure is determined to become a leader in the provision of emergency or short duration oxygen solutions for laypersons. We are on track to do this and we are excited about the fact that the market recognized the need and has started validating our value proposition.
CEOCFO: What are able to provide? Mr. Ross: We developed a technology that at its core is very simple. You take two dry inert powders and when you put them together, you get medically pure oxygen. Think of this as a platform technology upon which we can satisfy various solutions for vertical market needs that are out there. The first need that we recognized, and we launched our first product to satisfy this need, and it is a portable emergency oxygen device for layperson use. It is safer because there is no oxygen storage, no compressed tanks, no dials or valves and no regulators. It is simple to use: you plug in a tube, you turn a knob and you are done. This product has approval by the FDA for over-the-counter sale, no prescription required. In a nutshell, it is the same model as that of an automated external defibrillator or AED. Fourteen years ago, nobody knew what an AED was and now they are everywhere in schools and airports and so on. And these AEDs, they are designed to bridge the gap between the onset of a cardiac arrest and the time that the first responders get there. It is designed to provide the assistance to the victim in that golden window of opportunity right after the emergency occurs. OxySure has the same model, which is designed to bridge the gap between the onset of an emergency and the time that the first responders get there. It empowers a layperson to do this and that is where we see a big need. We sell the unit right next to AEDs, prepositioned typically on a wall but we have a mobile version as well.
CEOCFO: What does this product allow that has not occurred before in another system? Mr. Ross: It is not so much that we are replacing anything but that we are satisfying a hole in the market. There has never been anything to adequately satisfy that need so in the context of an AED, it is the missing half because all the clinical protocols specify that post-resuscitation, you have to apply supplemental oxygen to the victim as soon as possible it if it available. In other words, if somebody goes down and they have a cardiac arrest, you apply the AED to get the heart started and then immediately after that you want to apply emergency oxygen because for the duration that the person’s heart has stopped, there has been oxygen deprivation to organs and the brain.
CEOCFO: What has OxySure developed more specifically and technically? Mr. Ross: It is a catalytic process and what that means is there is no oxygen prior to the turning of the knob. There are these powders which are separate from one another, hermetically sealed, but when they come together, they generate the oxygen molecule. There is no other gaseous by-product, it is pure oxygen of 99% plus concentration. The rest is a little bit of moisture so that the oxygen is comfortable when breathed and that is essentially the difference. There are two main modalities, one is a tank and that stores the oxygen in a compressed form and there are some other catalytic processes that are used in aviation and mining but they are not suitable for the layperson because they have drawbacks. For example, toxicity or heat especially, they produce very high heat so they are just not suitable for packaging up into a way that is suitable for mass layperson use.
CEOCFO: How did you come upon the solution? Mr. Ross: It is a personal story, a family member who had emphysema and I witnessed this in my younger years in him toting around the tank. I felt like there had to be a better way. By thinking about this idea of oxygen on demand, in other words, the oxygen is generated the instant that you need it, and that is the genesis of it.
CEOCFO: Who is using your products today? Mr. Ross: When we got FDA approval in December of 2005 we started the manufacturing process and produced the product right here in the US in a purpose-built facility in Frisco Texas. Once we went to market, we decided to go after the K-12 education market first. We have done a nice job and now we are in schools and school districts in about forty states. They are prepositioned next to the AEDs in the school system, sometimes in the nurses’ office, and usually in the gyms and athletic trainers offices. Some of our school district customers have product throughout the entire district. That is where we started and then we branched into other institutional markets like colleges, churches, manufacturing facilities and commercial buildings. That is our growth strategy.
CEOCFO: How does one replace the powder after it is used? Mr. Ross: It is a one-time use. The system comes with a disposable component, which is a cartridge in a reusable component with all the actuation mechanisms and so on. When you are done with it you throw it in the trash, and it is environmentally friendly. You easily replace it in a few seconds and you are ready to use it again.
CEOCFO: In June, you received approval in Brazil. What is your global strategy? Mr. Ross: We are very excited about going into new markets. Of course in the US we are very early but we are seeing some significant pull-through demand into some of the international markets. In part, the reason is when we talk about bridging this gap. In 2004 the USA Today did a study about the response times for emergency services and from that study that the gap could be anywhere from six to fifteen minutes depending on the city, time of day, traffic conditions and so on. When you look at some of the international markets, people tell us that the gap could be much longer. For example, in a particular province in Brazil, the officials say that you are lucky that if in the forty-five minutes to an hour after an emergency a paramedic shows up by your side. Perhaps it has something to do with the emergency infrastructure but mostly it is traffic congestion. The point is the value proposition resonates much louder in some of these markets, so for that reason we see a significant pull-through demand. We have many discussions going on at the moment to get into some of these other international markets. Brazil is one of the first.
CEOCFO: How do you reach potential customers in the US and other countries? Mr. Ross: We mainly sell through distribution right now. A typical distribution partner would either be in the business of selling AEDs, which is a natural fit for us, or sometimes they are in the business of CPR training or the business of selling first aid or safety equipment and supplies, and to a lesser extent, medical equipment and supplies. We are partners with these folks and in the US right now we have about forty distributors and approximately four that were signed outside of the US so far.
CEOCFO: Do you sell some additional products as well? Mr. Ross: Yes, we started seeing customers ask us for complimentary products for example when we talk about prepositioning the product, and automatically there is a wall box and signage required, so we started selling those. In other cases, such as for example coaches and athletic trainers in schools and colleges that have a requirement where they want to take the product to games, practice sessions and so on. That is where we developed the OxySure thermal bag which allows them increased portability and mobility. Then you have nurses who come and tell us it would be nice if they could do CPR with the OxySure in-line, so that is when it made sense to add a resuscitation bag which allows them to do that and it works brilliantly. We have other things that are related, complimentary, and as it stands now we do not typically see a purchase order that is not comprised of a number of these different things, OxySure units, back-up cartridges, resuscitation bags, wall boxes, signage and so on.
CEOCFO: Is there a shelf life to the powders? Mr. Ross: There is a shelf life on the cartridge so that means the customer has a two-year guarantee. The expiration date is on the cartridge and the design has placement requirements associated with AEDs in mind such as batteries and pads, which the customer usually should replace after two years. The customer is used to that but of course, there are testing requirements attached to that as well. We typically see customers use the unit long before the expiration date. The pleasant surprise for us is that customers use this very frequently.
CEOCFO: What is the financial picture like for OxySure Systems today? Mr. Ross: We are optimistic. We are entering a growth phase and we have been very cautious in the way that we approach the acquisition of growth capital to facilitate that and accelerate it. We have had some discussions but we are looking for the right transaction from a growth capital point of view. Prior to this, we have been very prudent and conservative in the way we funded the company. There was a Stanford study, which came out sometime in February this year. They looked at what the cost is for a medical device company to become FDA approved. From the study of about 200 medical device companies, it appeared that at the low end it was about $31 million and the high end of the range is $85 million. OxySure spent about $13 million or just in excess of that to get to the commercialization phase. We are pleased about how we have been able to perform and create value for shareholders.
CEOCFO: How does it feel to save lives on a regular basis? Mr. Ross: That is probably the most exciting thing about our business and it makes us excited about coming to work every day. We have been fortunate and have had an excess of 200 ‘saves’ that have been documented since the middle of 2008. We know that there are a lot more ‘saves’ that have taken place but of course with HIPAA laws and moreover even the school districts have some very strict privacy laws, so it is very difficult to get information about the ‘saves.’ We have seen customers buy hundreds and hundreds of replacement cartridges so you know the cartridges are being used. We know it is working, we know it saves lives and that is exciting.
CEOCFO: Why should investors pay attention to OxySure Systems?
Mr. Ross:
I believe we are that diamond in the rough that people are always looking
for. I truly believe that we are under the radar and have not really gotten
to the stage where we have built the awareness, so we are a good find for an
investor. From a fundamental point of view, we are a good investment because
we have a great IP position. We have first mover advantage. We created this
and pioneered this technology. The markets are very large and they are
growing very rapidly. If you just look at the AED market there are two
million AEDs installed in the US plus or minus. That size from an installed
base is still growing at a double-digit rate. Outside of the US you are
looking at around 700,000 units that are growing much faster than in the US
because now they are catching up. That is just one market. Remember that you
are three hundred times more likely to need an OxySure unit versus and AED.
An AED only helps you if you have a cardiac arrest but OxySure can be used
in asthma attacks, COPD exacerbations, or for basically any medical
emergency because the standard of care today is if the first responder shows
up they will put oxygen on you immediately. The markets are large and they
are growing. We believe we are platform company, set to become a new
billion-dollar medical technology superstar. |
||
|
From a fundamental point of view, we are a good investment because we have a great IP position. We have first mover advantage. We created this and pioneered this technology. The markets are very large and they are growing very rapidly. - Julian T. Ross |
||
|
|
||
|
Medical Device Stock, OxySure® Systems, Inc. (OTCBB: OXYS), CEO Interviews 2012, Oxygen On Demand Devices, Emergency Medical Technology, Portable Oxygen, medically pure (USP) oxygen from inert powders, Recent CEO Interviews, Medical Device Companies, Healthcare Stocks, Medical Technology Stocks, OxySure Systems, Inc. stock, OXYS stock quote, OxySure Systems Press Releases, News |
||
Julian
T. Ross