New York, NY, November 6, 2014 SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has initiated coverage on Arch Therapeutics, Inc. (OTCQB: ARTH) with a price target of $1.50.
“Arch intends to transform the landscape of interventional healthcare with products to seal and protect leaking and bleeding tissue. Arch’s flagship product, known as the AC5 Surgical Hemostatic Device, has been specifically designed to be a highly differentiated and more effective product for the surgical sealant market when compared to the current technologies being utilized,” commented Ajay Tandon, CEO of SeeThruEquity. “Arch has made great progress in 2014 and plans to complete the activities needed to obtain regulatory approval to market AC5 in Europe in 2015 and in the US subsequently. Europe presents an exciting revenue opportunity in its own right, and it can help pave the way for Arch into other markets globally. We expect no shortage of product related news flow to serve as catalysts for the shares in the upcoming months. We view AC5 as a highly differentiated product, which should gain significant traction in the multi-billion dollar global surgical sealant market. We are initiating coverage with a price target of $1.50 per share.”
Additional investment highlights are as follows:
AC5 a transformative product for the surgical sealant market
Arch is currently developing the AC5 Surgical Hemostatic Device(TM) (“AC5”) as an approach to the rapid cessation of bleeding (hemostasis) and control of fluid leakage (sealant) during surgery and trauma care. AC5 is designed to achieve hemostasis in minimally invasive (laparoscopic) and open surgical procedures. Developed by Arch co-founder Dr. Rutledge Ellis-Behnke, PhD, and licensed from the Massachusetts Institute of Technology, AC5TM is a synthetic peptide comprising naturally occurring amino acids. When AC5 is applied directly onto a surgical or traumatic wound, it rapidly creates a physical barrier in the nooks and crannies of the tissue and promptly stops bleeding and fluid leaks. It is very easy to prepare and handle, and the substance is not sticky or glue-like. AC5 has the added advantage of being transparent, even when applied to the wound, enabling surgeons to see and perform surgery through the barrier. Arch calls this Crystal Clear Surgery(TM). AC5 conforms to irregular wound geometry, and the product also allows for normal healing. Once the incision heals, AC5 is naturally absorbed and passed through the body.
Clinical trials and regulatory submissions quickly approaching
Arch plans to initiate a non-US clinical trial in the next several months. This will either be a pilot or pivotal study, which will lead the way to a submission for CE Mark approval and EU commercialization in 2015. AC5 has been studied across a range of tissues, including liver, but Arch has not yet announced specifics around the design of the clinical trial. The likely primary endpoint for the AC5 trial would be time to hemostasis. Even if the company was required to conduct multiple trials, we would assume a non-US pivotal trial would require 50 patients and take roughly four months to complete, which would not materially delay Arch’s submission and commercialization plans. Additionally, these trials will not be particularly onerous from a capital perspective, especially compared to traditional drug development trials or medical device trials introducing a new polymer or drug coated material.
Management team well versed in public market dynamics
The Arch management team possesses proven science and business track records, with the knowledge to build, run and grow a commercial enterprise. Arch is led by CEO and co-founder Terrence Norchi, MD. Prior to founding Arch, Dr. Norchi was portfolio manager of one of the world’ largest healthcare mutual funds and pharmaceutical analyst at Putnam Investments. He also held buy and sell-side research roles at Citigroup Asset Management and Sanford C. Bernstein in New York City, respectively. He is uniquely qualified to guide an emerging health care company from development to commercialization.
The report is available here: ARTH Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will also be available on these platforms.
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About Arch Therapeutics, Inc.
Arch Therapeutics, Inc. is a medical device company developing a novel approach to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. Arch is developing products based on an innovative self-assembling peptide technology platform to make surgery and interventional care faster and safer for patients. Arch’s flagship development stage product candidate, known as AC5 Surgical Hemostatic Device(TM), is being designed to achieve hemostasis in minimally invasive and open surgical procedures.
Find out more at www.archtherapeutics.com
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
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