Next to the common cold, menstrual cramping is one of the most common causes of recurrent physical discomfort worldwide. Dysmenorrhea is widespread amongst women of child-bearing age and no currently available treatment for this condition is particularly effective or completely safe. Tylenol, the usual drug of choice, is known to cause liver damage and the FDA has recently sounded an alarm about the doses of Tylenol often used to relieve pain.  Nonsteriodal anti-inflammatory drugs aren’t much safer given their well-known side-effect profile.

If a drug-free, affordable and effective treatment for dysmenorrhea could be found it would surely prove widely popular and highly profitable, which brings us to Bioelectronics Corporation (OTC:BIEL) (BIEL.PK), a microcap medical device company that has just released the results of a study demonstrating the efficacy of their product in eliminating or greatly ameliorating menstrual cramps. Bioelectronics Corporation manufactures a wafer-thin skin patch that contains an embedded microchip capable of generating pulsed electromagnetic energy.

At first glance, the technology smacks of quackery, but studies have shown it to be anything but. No one quite understands how pulse electromagnetic field (PEMF) therapy works—theories abound—but there is an exploding literature about its healing properties. Bioelectronics’ advance is the miniaturization of the old clunky devices that had previously been used to reduce the swelling, inflammation and pain associated with a host of different ailments, injuries and surgical procedures. The company’s device has been cleared by the FDA as an effective agent that helps accelerate recovery and lessen pain after eye lift surgery. Plastic surgeons have taken to using this device for that indication and only accidently discovered that it was remarkably effective in lessening menstrual cramps.

Barry Eppley, M.D., a Board-Certified plastic surgeon, was first to discover that this company’s patented device could greatly alleviate menstrual pain. His pilot study conducted in October, 2008 was subsequently replicated in a study he conducted in association with Sheena Kong, M.D., a Harvard-trained, San Francisco-based internist. Her double blind study involved 83 subjects (48 treated with active devices and 35 treated with “control” devices that were visibly indistinguishable from one another). Since the electrical impulse generated by the device is imperceptible, no subject in the study was able to tell whether their device has been activated.

The study was completed in May, 2009 and proved conclusively that those outfitted with the activated patch experienced a great reduction in pain. Seventy one percent of those outfitted with the active patch experienced either complete amelioration of pain or a significant reduction in pain (often reduced by half). By contrast, no subject in the control group was pain free and only 20 % reported a placebo-associated reduction in pain. Not quite a cure for “the curse”, but a statistically significant improvement! One big step for womankind!On June 15, 2009 the company filed a 510(k) application with the FDA seeking the agency’s “clearance” of its Allay ™ Period Relief Patch. Such applications are typically approved 85% of the time, and the waiting period tends to be much shorter than it is for drugs awaiting approval—on a scale of weeks not months.

The company has already jumped the FDA hoops once before in 2002 when its product won FDA clearance for use in the postsurgical management of patients who’d undergone eye lift surgery so they know the drill. Once FDA clearance is obtained, the patch can then be marketed as an over-the-counter device purchasable by consumers at their local drug stores. Bioelectronics is no one-trick wonder in that its devices (ActiPatch TM, marketed to consumers,  and Recovery TM, sold to the medical community) not only continue to be a stable in the management of patients who have undergone plastic surgery (particularly in breast augmentation and blepharoplasty) they are currently being studied for use in a host of other inflammatory conditions: arthritis, back pain, plantar fasciitis (a painful foot condition), post-surgical wound healing including dentistry, and other chronic and acute inflammatory conditions. The company even plans to release veterinary products.

The pipeline seems substantial.So, how is the company doing? Surprisingly, the company is close to operating on a break-even basis. Actipatch, which helps alleviate musculoskeletal pain, is selling worldwide, particularly in Korea, Denmark, Saudi Arabia, Latin America and India—where it is distributed by Piramal Heathcare, one of the largest pharmaceutical companies in India. Bioelectronics Corp’s products have been certified for sale in the European Common Markets (having been granted CE Mark certification) and in Canada, where it can purchased in drug stores and at select Walmarts. Of note is the fact that the Maryland State’s Medicaid Program reimburses kidney-compromised patients who use of the company’s anti-inflammatory patches. Months ago the company projected sales of $2 million for 2008, but they are currently closed-lipped about their revenues.

No audit of the books has been conducted since 2006 but the company’s Investor Relations man, Joe Noel, states the company plans to conduct an audit in the 3rd quarter that might result in its becoming a reporting company in the last quarter of the year. Over the last twelve months, Bioelectronics has upgraded its product, established relationships with distributors worldwide, and moved manufacturing off shore. Because its overhead is low, its profit margins are high, and its debt is negligible the company should explode into profitability once the product is cleared and begins appearing on the shelves of your nearest drug store.

What about the stock? There is a ton of stock outstanding—740,000,000 shares. At a current share price of a little over 1 cent the company is capitalized at a mere $ 7.5 million—a bargain considering the fact that the previous owners of the technology spent about $4.5 million developing, testing and patenting the device. That is a nanocap stock! Over the last 52 weeks the stock has sold for as much as $0.12. It wouldn’t be hard to imagine the stock being conservatively valued by year’s end at between $60-80 million (bringing the share price to a dime, 10x what it currently trades for) so long as management stops selling stock to raise working capital. A year ago there were roughly 1/3 as many shares as there are outstanding today. Longer term, the company could go one to be worth 3x that amount, making for a “thirty bagger.” Too good to be true? Perhaps.

Questions remain as to how the company plans to raise the cash needed to ramp up production and bring this product to market in the U.S. once FDA clearance is obtained. Noel discloses that the company is already in discussions with manufacturers of other feminine hygiene products—companies he won’t name—who are willing to partner with them to help produce this product. Naturally, the company’s ability to capitalize the venture will determine whether is sinks or swims. Stay tuned!All in all, Bioelectronics is a great “story stock” that stands a better than even chance of becoming real. The Obama Administration’s focus on health care reform may go a ways in helping create an environment that would benefit such cost-effective treatments that carry no risk of complicating side effects.

DISCLOSURE: LONG BIEL

BiomedReports is not paid or compensated to report news and developments about publicly traded companies. Full disclosure can be read at the bottom of / About Us / Section

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