Wound Management Proves Strong Potential With Distribution Agreements In Place

Advanced wound care technologies have emerged from the shadows to become, in the last 20 years, significant products in the treatment of wound care. While conventionally made wound care products  are  generally less expensive, new products and biotechnological advancements are beginning to revolutionize future growth of the wound care market.  Wound Management Technologies, Inc. [OTCQB:WNDM]  is an emerging commercial stage company with its primary products in the $5 billion worldwide advanced wound care market. OneMedRadio interviewed President and Director Deborah Jenkins Hutchinson and got a glimpse into this emerging growth company.

Hutchinson notes that the company’s lead product CellerateRX addresses serious wounds like diabetic ulcers and first and second degree burns, but utilizes activated collagen expediting healing several times faster than other collagen products. Currently building distribution channels, Wound Management is hoping to become cash flow positive and profitable within the next year.  The company recently entered into a distribution agreement with an initial $2 million order for CellarateRX. A strong advocate of the product, Hutchinson notes that one of the company’s leading studies was done by a doctor at the Miami Veterans Affairs Healthcare System (VA).  They also have a government initiative that will extend beyond the 10 VA hospitals CellerateRX is currently in. Listen to the interview below and see transcript that follows.

Brett Johnson: Welcome, this is Brett Johnson from OneMed Radio in New York City. Today, we are with Debbie Hutchinson. She’s the president of Wound Management Technologies, symbol WNDM on the Over-The-Counter QB. It is a Fort Worth-based advanced wound care products company. Thanks for joining us today, Debbie.

Debbie Hutchinson: It’s my pleasure.

BJ: So Debbie, can you go ahead and tell us about the business of Wound Management Technologies?

DH: Sure. Wound Management Technology is a rapidly growing provider of advanced biotechnology products, the main one being CellerateRX, which is an activated collagen product in the advanced wound care market.

BJ: Why was Wound Management created? What problems are you addressing?

DH: Well, Wound Management’s first venture was Wound Care Innovations, our subsidiary with the CellerateRX product and CellerateRX is a unique collagen product. So it’s addressing a worldwide market of $3 to $5 billion in advanced wound care products of serious wounds. So we’re FDA indicated for everything except third-degree burns. So we’re taking care of things like diabetic ulcers, Venous Stasis ulcers, surgical wounds, first and second-degree burns, and so forth… so lots and lots of need in that market.

BJ: How does your product work or what makes this special and different than how these wounds are being addressed today?

DH: Well, the CellerateRX advantage is that it’s what we call activated collagen. So the collagen molecule is chopped or cleaved into small molecular pieces by patent and what that means is when it hits the wound, it starts working immediately as opposed to a different collagen product that your body would have to break down to be able to use. Some of those products, you know, could take anywhere from a few days to a few weeks to be effective like our product is. So that combined with the fact that we have a product that will conform to any wound size because it’s both in a powder and a gel. It’s not a premeasured dressing that has special handling or characteristics where maybe you use part of it and have to throw the rest away. So it has just a couple of those advantages added together just give it some really unique flavors.

BJ: What are the main markets that you’re going after with this product?

DH: Well clearly, the medical markets, which would be homecare and assisted living and nursing home and hospitals in addition to wound care centers, medical surgical, VA, which would include, of course, the VA hospitals. And then we also have a government and retail strategic side that just kind of extends that out further.

BJ:     So will you be licensing the product or building your own distribution networks for each of these areas?

DH: In most cases, yes, we’re building our own distribution channels. We have one unique strategic partner where we license the CellerateRX powder in North America to a group because of their reach within the hospital community, but most of the time, we’re going after the distribution community.

BJ: So what are the first goals of the company in terms of which of the categories are you going to pursue first and what’s your outlook on revenue that could come from those categories?

DH: Oh, sure. Well we’re actively selling through a variety of hospitals, through a variety of wound care centers across the country. We have physicians that have used our product during development stage for six years. We have one particular physician in the Pacific Northwest, that accounts for a large amount of sales every year just from one doctor really understanding how well it works and using it through the hospitals and wound care centers in her area. So we’ve got a medical community going, we’ve got long-term care chains that have CellerateRX on formulary, we’ve got hospitals and homecare agencies adding to that.

In addition to that, we have a government initiative to extend beyond the 10 VA hospitals we’re currently in. We have an engagement with the group called Government Marketing and Procurement that is getting us on their GSA schedule for service — Disabled Veterans Service Minority Owned Classifications. We anticipate that that will be finalized very shortly now and that will just basically extend the reach and the amount of product we can sell through those channels so that’s pretty exciting. In addition to that, we have some distributors that we’ve licensed to go after the retail markets so they’ve created their own programs to sell product on TV, one via the internet to sell in situations where people choose to do the private pay to buy the product themselves as opposed to going through healthcare reimbursement.

BJ: I see. So the consumer product would be similar to Neosporin? Is that the product that people use today on the consumer market?

DH: Very different, very different. Neosporin would be an antibiotic. What CellerateRX will do will keep a moist healing environment and it will help the body repair itself with collagen. You can use it in conjunction with an antibiotic like a Neosporin if that’s necessary. When you have a wound, you would clean it the first time, you could put an antibiotic if you chose, Neosporin or another. You can put Cellerate on top of it, cover it up, leave it alone and let the healing process begin.

One of the interesting things about Cellerate is once you do that the first time, you don’t have to take the product out in the future. So you don’t have to take that bandage off, clean the wound, reagitate it, create pain, create a breakdown of the healing that’s happening. You just put more product on top of the old product, it’s biodegradable. More on top, re-cover it up, and let it continue to heal.

BJ: Terrific. Have you been able to do any sort of analysis–obviously wounds healing faster cost the healthcare system less. Has anyone done any sort of analytics as to the impact in terms of the cost savings that an acceleration of wound care can have?

DH: Yes, there have been and you’ll find some of those on our CellerateRX.com website. Interestingly, they also come to us from the outside. On the CellerateRX.com website under the video and information section, there’s a news story that was done by WFLA Tampa where a doctor found out about Cellerate, used it in the hyperbaric chambers to treat diabetic leg ulcers in addition to the chamber. And talks in that program that they did on the news down there that he estimates they were saving $20,000 per patient for adding products like Cellerate to the hyperbaric chamber to heal wound faster.

So that’s just one, you know, antidotal third-party thing. We have all kinds of statistics on using Cellerate to treat diabetics’ leg ulcers and closing wounds within five weeks. I’ve heard other people talk about statistically relevant studies like ours where they’re closing wounds in 8 weeks or 10 weeks or 12 weeks. So time is money obviously. We don’t go head on head against other products when we do our studies typically but, it’s pretty easy to figure that out.

BJ: So you have a contract with the VA Hospitals, you indicated?

DH: We sell to 10 VA hospitals today so it’s not a contract, it’s just VA hospitals are able to buy up to $3000 of Cellerate a month per hospital without going out to open bid. When we’re on the GSA schedule, what that means is they can buy a lot larger quantity of product on the GSA schedule because we’ll be classified in a way that makes that possible.

BJ: Right. So is it hard to get on a GSA schedule?

DH: Well to get on the GSA schedule with someone that has the classifications to give you business advantages like the service owned disabled veteran classification, it just takes some time and obviously you have to work with quality people to get on a healthcare schedule. The VA has to approve that so they have to recognize that the product has great advantages.

BJ: So where is the product produced and what would be your limitations in terms of supplying the market?

DH: We currently manufacture our product at a group called MPL in Pennsylvania. We don’t have any limitations on manufacturing to date and don’t anticipate any for quite some time because they’ve got large capacity.

But in the event that we ever got so large that we felt like that wasn’t enough, we could easily extend and bring in a second manufacturing facility.

BJ: So as for milestones for the coming year, what do you see as the major objectives?

DH: Well our major objectives, which we announced in January, part of them we’ve met I’m happy to say, is basically to become cash flow positive and profitable within the next year. Coming out of years of development, that’s obviously a big goal for us. The first quarter of this year, we were cash flow profitable from operations for the first time ever. The second quarter wasn’t quite the same but, you know, it will continue to build as we even out cash.

Other large things for us were basically to get a broad reach of products out there. So we now have announced retail efforts in addition to major healthcare systems. We said we will have at least two of major healthcare systems as active users and purchasers of Cellerate by the end of the year. We also have the goal by this Christmas, which we believe that we’ll meet, to bring products from other group, resorbable orthopedic products out onto the market so that we’re not counting just on revenues from our Cellerate product.

BJ: Terrific. Can you tell us a little bit about your background and how you got involved in the company?

DH: I got involved in the company from running across some of the original investors about 10 years ago. Very, very interested in the product. Like everybody else that has a story, I had the opportunity to use the product a couple of times when I badly burned myself in the kitchen and was just amazed at how well it worked. So I started working several years ago with one of the main investors in the company on a variety of products and they’re the ones that brought me into this to take it forward.

Most of my background has been in information technology or healthcare information technology developing companies, creating cash flow, creating revenues until about 12 years ago when I also got involved in healthcare products. So I have a pretty varied background of taking products to market doing international business as well as national business and creating commercialization plans.

BJ: Well it sounds like you have a very exciting opportunity ahead of you and it’s certainly a busy time. Thanks so much for joining us today.

DH: It’s always our pleasure to talk. I’m really happy to answer questions at any time.

BJ: Terrific. That is Debbie Hutchinson from Wound Management Technologies, symbol WNDM traded on the Over-The-Counter QB, and Brett Johnson signing off from New York City for OneMedRadio. Thank you and good day.

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