Ingen Technologies (IGNT): An Emerging Leader in the Growing $500 Million per Year Oxygen Cannula Market
Ingen Technologies (IGNT) cannulas offer in-home oxygen patients peace-of-mind, while helping managed care organizations similar to Lincare Holdings, Inc. (LNCR) and Cardinal Health, Inc. (CAH) creating substantial cost-savings by reducing support costs.
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Ingen Technologies, Inc. (IGNT.PK), which has developed and patented an innovative cannula that monitors oxygen flow, stands at a key reflex point in unlocking value for shareholders. Its products are obtaining final certification, contracts are in place which has lined up distributors, financials are being cleaned up, and management is poised to rapidly expand sales and drive value for shareholders.
A Growing $500 Million per Year Industry
With more than 20 million patients in the USA and 600 million patients worldwide, using oxygen at home and millions more in hospitals, cannulas represent a $500 million per year market segment in the $4 billion per year respiratory industry. Meanwhile, the market is rapidly expanding both in the U.S. and abroad as an aging population increasingly requires oxygen to combat the #4 leading cause of death in the USA and #1 leading cause of death in Asia and Europe.
Chronic obstructive pulmonary disease – or COPD for short – represents a group of lung diseases that block airflow and make it increasingly difficult to breathe. The illness is a leading cause of death worldwide, mostly caused by long-term smoking. The key treatments are oxygen tanks with cannulas that provide a higher concentration of oxygen with each breath.
Currently, Medicare provides approximately $189 in reimbursements for oxygen tanks, which is noticeably down from the $500 per month before the global economic crisis. The cutbacks have forced many in-home care providers and patients to seek a low-cost alternative, but it turns out that Ingen’s technologies “Oxyview Cannula” offers the best long-term cost savings and consumer benefit.
Cannulas that Cut Costs and Improve Care
Ingen Technologies has developed an innovative new cannula that it calls Oxyview. Unlike traditional cannulas, Oxyview monitors oxygen flow in order to give patients peace-of-mind and provide cost-savings to in-home care companies by reducing needless support calls and improving patient care.
“I believe this device will eliminate most of the after-hour calls we get and thus not have to send someone out to check the machine,” said Deena Neal of Professional Oxygen Supply, Inc. “Everyone in this industry is looking for ways to reduce costs and I think [Ingen’s Oxyview] will be a great way to help with that.”
Many other customers enjoy using the device in order to ensure patient safety as well. Dr. Gary Call, Chief Medical Officer of Bingham Memorial Hospital in Blackfoot, Idaho, was one of these people who purchased Ingen’s Oxyview cannulas to ensure that every one of the nursing home residents has oxygen flow after experiencing a problem with an empty tank earlier.
“For less money than [our patient’s] trip to the emergency room cost, we bought enough Oxyviews to ensure every one of the nursing home residents has flow in their cannulas,” said Dr. Gary Call. “[Moreover], no longer does our staff have to lean down and lift the tank out of its bracket, let it find a balance point, before determining whether or not oxygen is available.”
Poised to Break Into Key Markets
Ingen Technologies faces few hurdles before breaking into the market in a big way. These hurdles include obtaining key licenses and certifications, as well as identifying a distributor to bring Oxyview to larger medical institutions. Fortunately, the company is at a point where it is poised to surpass many of these issues in the near-term and is in the process of doing so.
On January 28th, Ingen announced that it had officially signed a contract with Texas-based KGMA Business solutions for pursuing U.S. Government contracts. The firm had prepared and submitted the GSA application for Ingen on September 22, 2009, which after completion of approval, opens the door to more than 300 VA hospitals in the U.S.
On February 8th, Ingen announced that it passed Stage-I of its ISO 13485 Certification audit that is necessary to open international sales channels where it already has a substantial backlog and distribution partners lined up. Completion of the final Stage-II audit is set for March 2010 and meets its 2010 projections of $11 million in sales.
Getting the Financials in Order
On November 4, 2009, Ingen engaged CDM Capital, LLC to provide interim financial consulting services and assist the company with restating, if necessary, its financials in 2007 and 2008, as well as working to prepare and submit missing SEC reports and preparing reports and financial statements for posting on PinkSheets.com, according to an 8-K filing with the SEC.
Ingen expects to become a fully reporting company again at the end of the fiscal year on May 30, 2010, while it is already in full compliance with PinkSheets.com reporting. Investors can find its latest 10-Q filing on PinkSheets.com or by clicking on this link.
A Commitment to Shareholders
Ingen also remains very committed to their shareholder base, as evidenced by their recent stock repurchase program. Reducing the number of outstanding shares will help increase the company’s earnings per share (EPS) and enable it to reach levels acceptable for an up-listing in the future when it fulfills its SEC reporting requirements.
According to a recent press release, “We have strong investment commitments to assist the company with a stock buyback program. In order to comply with the forebearance agreement with the NIR Group, we will seek majority vote from our shareholders to increase the authorized so we can pay off the balance of the note owed to various funds managed by NIR Group and move forward with the share buyback program.”
Currently, Ingen trades with a market capitalization of about $5.4 million with approximately 3.4 billion shares outstanding. However, a jump in sales and net income could quickly ramp up these numbers, with its high profit margins, low overhead, and growing distribution channels.
Long-term Plans Going Forward
Ingen remains uniquely position in the $400-500 million per year market for oxygen cannulas as the only provider of smart cannulas. With four patents issued and six pending, it has an exclusive presence in the market that could make it a potential acquisition target for a medical device maker looking for an inroad into in-home oxygen providers.
“We have a strong commitment to our shareholders and to the success of this company,” said Chairman and CEO Scott Sand. “There is no doubt that our medical products are now on the way to creating the revenues and recognition that they deserve in the marketplace … The heart of our success lies within the risks we have taken and our belief in these new medical products and success for this company.”
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