Summary
- Arch Therapeutics has FDA and EMA approval for AC5.
- They are seeding Key Opinion Leaders to get real-world case reports.
- They just reported the first case in diabetic foot ulcers.
- Total market capitalization well under $50 million justifies a long position.
In this recent article, I covered a severe pressure ulcer case treated by AC5 from Arch Therapeutics (OTCQB:ARTH). AC5 is a wound care and bleeding control technology that is approved by both the Food & Drug Administration and the European Medicines Agency for external use. Arch is seeding Key Opinion Leaders in wound care with AC5 to get case reports that those doctors can publish in peer-reviewed journals. Although the peer-review process can take a long time, at the recent LD Micro 500 Conference, Arch described a diabetic foot ulcer case study.
Diabetic foot ulcers are a major complication of diabetes mellitus, a metabolic disorder that interferes with the normal steps of the wound healing process. They occur in 15% of people with diabetes and cause about 85% of all diabetes-related lower-leg amputations. Unfortunately, these ulcers often result in a partial foot amputation, followed by rehab, followed by another partial amputation, and so on.
The estimates for annual Medicare spending for diabetic foot ulcers range from $6 billion to $19 billion. It is a very expensive illness that dramatically affects the quality of life of an estimated 69 million people worldwide.
Arch's AC5 allows doctors to promote healing by aggressively debriding the ulcer, removing more necrotic tissue, while easily controlling bleeding. In the case presented, the patient had a partial right foot amputation. They developed severe sepsis that eventually required a partial left foot amputation. They then developed an ulcer in one remaining heel that did not heal for 10 months. Finally, the doctor was able to aggressively debride the ulcer in an outpatient setting, not the operating room, using AC5 to control the bleeding.
Source: Arch Therapeutics
AC5 and debridement were used once a week for five weeks. The ulcer's volume decreased by more than 50%.
Source: Arch Therapeutics
This is AC5's second successful case report and is one of three clinical case studies selected for presentation at the Symposium on Advanced Wound Care (SAWC) Fall; November 4-6, 2020. Arch is using a contract manufacturer that can ship directly to distributors, so they don't need a sales force to begin generating revenues. The company plans to sign distribution agreements in the near future and report their first commercial revenues in the December quarter. Diabetic foot ulcers are an expensive, debilitating disease, and word of mouth could make revenues grow rapidly.
