The biotechnology industry is one that is booming with innovation. Cures for some of the world's most devastating illnesses have been and continue to be invented, new technologies are providing physicians with less invasive and more effective options for treating their patients, and breakthroughs in just about every aspect of the industry are taking place at what seems to be a breakneck pace. As a result, finding a corner of the biotechnology space that has little-to-no competition with a drastic need for innovation can be overwhelmingly difficult to say the least. Nonetheless, one company – Milestone Scientific Inc. (NYSEAMERICAN: MLSS) – has done just that.

An Introduction To MLSS

Founded in 1991, Milestone Scientific is a medical research and development company that's focused on the industry surrounding subcutaneous drug delivery, which is the delivery of drugs under the skin. Interestingly, the hypodermic syringe was invented more than a century ago. In fact, the medical instrument has been around for more than 160 years. Nonetheless, little-to-no innovation has taken place surrounding this key medical tool since it was invented. This is where MLSS comes in.

When MLSS was founded, the company went on a mission to change what we know about the fear-inducing concept known as the hypodermic needle and syringe. A part of the medical industry that has not only led to fear in one-third of patients in the United States and around the world, but has also been starved of the innovation the medical industry had been seeing for years. Ultimately, Milestone Scientific wanted to find a way to relieve the pain, discomfort, and anxiety that comes along with this form of drug delivery.

In doing so, the company quickly learned that the hypodermic needle itself wasn't the source of the pain that has caused this fear, discomfort, and anxiety. Instead, the source of this pain was the pressure created when the medication flowed through the needle and into the patient's body. The syringe concept itself was the problem. In fact, as medicine flows through the broad diameter syringe and into the thin diameter hypodermic needle, enormous pressure is created. That pressure can be up to 300 PSI. Considering that most tires are only pumped to around 30 PSI, one could imagine the damage a drug being sent into the body at 300 PSI could do to tissue.

Enter The World Of Dynamic Pressure – Sensing Technology

Knowing that the hypodermic needle wasn't the source of the pain, discomfort, and anxiety associated with subcutaneous drug delivery, but that pressure was, MLSS set out to solve the problem. This led to the invention of the company's proprietary DPS® – dynamic pressure sensing – technology.

Through this technology, Milestone Scientific unlocked the key to largely pain-free subcutaneous drug delivery. By monitoring the pressure at which medicine flowed through the needle and into the patient's body, MLSS was able to greatly reduce pain by reducing the flow of medication based on the pain-causing pressure associated with the treatment. However, this wasn't the only benefit of the ability to sense pressure dynamically at the injection site.

In fact, through this pressure sensing technology, MLSS realized that they now had the ability to precisely place the needle where it needed to be in order to get the maximum effect of the treatment that was being delivered subcutaneously. Ultimately, the implications of this technology reached further than even the management at the company would have realized early on.

It All Started With The Wand®

With the information amassed through the creation of the DPS® technology, Milestone Scientific moved to the next step, inventing a tool for the dental industry that's like no other. This tool is known as The Wand®. Taking advantage of the dynamic pressure sensing technology, The Wand® offers several benefits to clinicians and patients alike. These benefits include:

For Clinicians:

• Single Tooth Anesthesia – Due to the unique ability of The Wand® to sense the pressure at the injection site, the tool allows clinicians to anesthetize a single tooth. The proprietary DPS® technology created by MLSS allows clinicians to place the needle in a very small area required to do so. In fact, that area is only about the width of a few of the same hypodermic needles that are used for the procedure. As a result, patients visiting the dentist no longer have to worry about a quarter of their mouth going numb when getting dental work done.
• Reduction In Chair Time – At the end of the day, the longer a patient is in a dentist's chair, the more opportunity for earning that dentist is missing out on and perhaps more importantly, the more anxiety takes place in the patient. Through the use of The Wand® by MLSS, patients spend less time in the chair, giving dentists the ability to earn more within their practice while reducing anxiety among patients.
• Reduced Quantity Of Anesthetic – With the ability to anesthetize a single tooth, clinicians can now get the desired result with the use of a reduced amount of anesthetic.
• Fewer Complications – With less pain for the patient as well as less numbing effects, dentists who take advantage of The Wand® see fewer complications when treating their patients.
• Ergonomic Grip – The Wand® was designed by Milestone Scientific with an ergonomic grip, offering comfort to clinicians.
• Reduced Patient Cancellations – Because The Wand® eliminates the pain associated with the injection of an anesthetic, fear and anxiety are reduced among patients, leading to less patient cancellations.
• Avoidance Of Tachycardia – Through the use of The Wand®, clinicians now have the ability to avoid tachycardia, a serious, life threatening condition that is caused when drugs like anesthesia drugs that include the use of epinephrine are injected into the blood vessel. Because The Wand® uses the DPS® technology, dentists can be sure that the needle is not in a blood vessel, but instead, is in the target location for the treatment, avoiding the problem of tachycardia all together.

For Patients

• Painless Injection – The Wand® by MLSS is designed to offer painless injections, bringing a new level of comfort to patients visiting the dentist.
• No Collateral Numbness – Through the use of the DPS® technology, dentists now have the ability to anesthetize a single tooth, avoiding collateral numbness throughout the rest of the mouth and tongue.
• Faster Onset Of Anesthesia – With the ability to target a single tooth with pinpoint precision, MLSS has created a way to speed up the process of anesthesia.

As a result of all of the benefits listed above, Milestone Scientific has seen great success surrounding The Wand®. In fact, the technology has received both FDA and CE marketing clearance, and more than 45,000 units have been sold leading to more than 70 million injections using the technology to date. In 2016, the company generated more than $10.5 million in sales from the product. This technology has also opened several doors for MLSS, as one would imagine.

First and foremost, MLSS has been awarded with 21 patents, many of which are wide-ranging, surrounding its proprietary DPS® technology. On top of that, it has seen favorable evaluations in more than 50 peer-reviewed independent clinical research reports. Not to mention what is perhaps the largest validation of their work to date, the company has entered into an agreement with Henry Schein.

MLSS Enters Agreement With Henry Schein

Recently, Milestone Scientific reached a substantial milestone when they announced that they had entered into an agreement with Henry Schein. The recently announced 10-year exclusive distribution agreement signed with the world's largest provider of dental products opens several doors for the company.

First and foremost, Henry Schein has dedicated 25 sales representatives to the product, and they are supported by 900 field representatives. Henry Schein has also agreed to minimum purchase orders in order to maintain exclusivity through the 10-year period. Through this relationship, MLSS plans to ship approximately 2,800,000 disposables in 2017, which represents about 4% market penetration in a market where about 150,000 dentists perform more than 75 million injections annually.

Revenue Growth

As if the product offering wasn't enough to get excited about, MLSS has seen some impressive revenue growth on a year-over-year basis throughout the past 3 years. The chart below shows the exceptional revenue growth the company has seen. In the year 2015, the company generated $4.5 million in revenue, followed by $5.8 million in 2016, and $6.2 million in 2017. With the Henry Schein partnership, the potential for future revenue growth is incredible!

Looking Into The Future

When looking into MLSS at the moment, you're going to see quite a bit about The Wand® and its use in the dental industry. However, the implications of the DPS® technology go far and wide. In fact, Milestone Scientific received CE marketing approval for instruments in both the intra-articular and epidural spaces. In the United States market, the company has received FDA clearance for the CompuFlo epidural instrument and is currently working toward FDA clearance for the intra-articular instrument. In fact, MLSS is currently in negotiations with regard to forming strategic distribution partnerships around the world surrounding these applications.

This doesn't even go into mentioning the pediatric, cosmetic, veterinary, and many other applications that MLSS is in the process of tackling with their unique technology. In fact, the company is well on their way in some of these applications:

• Ophthalmic Injections – At the moment, the Milestone product pipeline includes a proposed plan to develop an Ophthalmic Instrument in the future. MLSS plans on designing this instrument to address several key needs associated with ophthalmic injections, including wet AMD, diabetic macular edema, and retinal vein occlusions. Through the use of their proprietary DPS® technology, the instrument would provide a virtually painless injection while simultaneously controlling the injection pressure to ensure a safe and effective pressure level during an intro-ocular administration.
• Pediatric Applications – Currently, MLSS products are being used in various pediatric applications. In particular, The Wand® system is being used with great success in pediatric dentistry, as it improves the patients overall experience and decreases fear. Also, due to the ability to pinpoint anesthetic to a single tooth, children don't inadvertently bite themselves after a dental operation. The pediatric community as also benefiting greatly from Milestone's CompuFlo epidural. In fact, two key opinion leaders in the field of pediatric anesthesia have approached MLSS to initiate clinical research using the company's CompuFlo technology for epidurals in children. While this process is relatively young, the company intends to support any such research and will be able to report the results and findings in the future.
• Veterinarian Applications – Finally, even the veterinary industry can benefit from Milestone Scientific's proprietary DPS® technology. In fact, Dr. Louis Campoy has completed multiple studies at Cornell College. During the studies, Dr. Louis Campoy used the CompuFlo technology to perform the Maxillary Foramen Block in a horse. To read the studies, click here (This will be a live link upon publication).

DPS® Technology Targets A Potentially Massive Industry

When looking into the potential of the DPS® among all currently approved applications and applications under development, it becomes clear that MLSS is addressing a massive market. Just take a look at the number of injections that take place in the United States market alone, generating an industry worth more than $1 billion per year:

• Epidural – Between labor and delivery, preoperative pain management, and chronic pain, 12.8 million epidurals are performed every year in the United States alone.

• Peripheral Nerve Block – 9 million peripheral nerve block injections are performed in the United States every year.

• Intra-articular – 5 million intra-articular injections in the knees, shoulders, hips, and other joints of the body take place in the United States every year.

• Cosmetic – 8.4 million Botox injections are performed in the United States every year.

DPS® Is The Key Driver Of Value

In this article, we've discussed quite a bit surrounding the dental applications as well as the epidural, intra-articular, and other applications of this technology. However, these applications, even when combined, aren't the biggest value proposition associated with this technology. The reality is that the technology MLSS has created has the ability to become a disruptive force in both the drug delivery industry and the intellectual property protection industry. Here's how…

Drug Delivery

We are already seeing how DPS® can change the shape of drug delivery in dental and other applications. While the dental applications are building revenue right now, the opportunities down the road are endless, and Milestone Scientific knows it. The company has an ultimate goal of creating hundreds of various medical devices designed for different types of injections, and they are well on their way to doing so. With the ability to detect exactly where the needle is in the human body through the use of pressure feedback, there is an abundant need industry-wide for a tool like this.

There are hundreds – and potentially thousands – of uses for a tool like this in the medical industry, and the industry needs a solution. On the industry side of things, about 4.5% of epidural injections end in morbidity. This means that the needle has passed the target, touching the membrane surrounding the spinal column. Every time this happens, another anesthesiologist has to perform another epidural and close the hole created with a blood patch. This can leave the patient with severe migraine headaches for up to 6 weeks, transient paralysis for up to 2 years, or even permanent paralysis. The cost of these issues is massive. In fact, the average settlement in an epidural morbidity case costs the facility around $400,000, not to mention the cost of the additional procedure and the cost of the original doctor not being able to work on the patient. With CompuFlo by MLSS, more than 700 epidurals have been performed with a 100% success rate due to the use of the company's DPS® technology. This is just one corner of the vast market.

However, the company isn't stopping with the injections themselves. Another thing to keep in mind here is that, with every device created, MLSS also sells disposables designed to work with that device. Ultimately, these disposables will create a constant stream of revenue beyond the purchase of the medical instruments themselves.

Patent Protection

Patents expire all the time in the medical industry; it's the nature of the beast. When this happens, the company with the brand name drug loses the vast majority of the market to generic competition. However, Milestone Scientific has a solution for this problem as well.

The company intends to partner with the companies that have created drugs with patent expiration. Through these partnerships, MLSS plans to create medical devices designed around the out-of-patent treatments. Of course, the new devices will only use the brand name drug, giving the pharmaceutical company a leg up in the market once its patent expires. From there, MLSS could license the technology, wholesale the device to the company, or even sell the rights to the device to the company they partnered with.

The Bottom Line

Milestone Scientific is a company that is well worth watching. As the company's Wand Dental subsidiary continues to grow profitability, the company continues to innovate and expand their offering, proving that their product and business model works. With proprietary disposables that provide high margins and continued innovation in new and exciting products surrounding the massive subcutaneous drug delivery market, MLSS is becoming hard to ignore. As revenue continues to grow, the company is expecting continued expansion in operating margins thanks to a highly scalable business model. Moving forward, the CNA Finance team will be watching for continued growth in The Wand® revenue, continued innovation in the subcutaneous drug delivery industry, and expected catalysts including operating results, study publications, and distribution contracts, all of which are expected to come down the wire relatively soon. We'll continue to follow the story closely and bring the news to you as it breaks!

This article was originally featured on CNA Finance. The author has no positions in any stock mentioned herein.