NEW YORK, NY / ACCESSWIRE / July 18, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has initiated coverage on PURE Bioscience, Inc. (OTCQB: PURE) with a 12-month price target of $2.45
The report is available here: PURE Initiation Report.
PURE is focused on developing and commercializing its proprietary silver dihydrogen citrate (SDC)-based antimicrobial products primarily in the food safety arena. SDC is non-toxic and offers superior efficacy in reducing pathogens when compared with other incumbent products. Persistent foodborne illness outbreaks and product recalls in recent times has resulted in stricter compliance norms, thereby providing huge tailwind for PURE. The new Food Safety Modernization Act, USDA's Salmonella Action Plan and increasing DoJ activity are likely to benefit PURE as companies seek superior food safety solutions to adhere to new standards. PURE's addressable opportunity is large (~$2.5 billion market) and the company is targeting to achieve ~10% market share over the long term (~$250 million revenues). We see PURE as a speculative play on the expanding food safety market, with superior product technology and an experienced management team. The company has made considerable progress over the last few years, with revenues growing ~72% YOY in 9M17. Going forward in FY18, we expect PURE to increase revenues approximately 403% YOY to $9.7 million aided by new customer acquisitions, commercialization of PURE Control®, and entry into new markets (poultry and produce processing).
Increased regulatory scrutiny to benefit PURE
With rules finalized under the Food Safety Modernization Act (FSMA) in 2016, the FDA is stepping up compliance and enforcement efforts through increased inspections of manufacturers and processors, especially in the areas of preventive controls and environmental monitoring programs. In addition, the USDA, under its Salmonella Action Plan, has finalized new federal standards to reduce Salmonella and Campylobacter in poultry. To enforce compliance, the USDA is increasing the frequency and rigor of testing, and will be posting individual companies' food safety performance online. USDA currently estimates ~63% of plants to be out of compliance.
Moreover, the number of foodborne outbreaks and product recalls continue to persist, which negatively impacts the affected brand's value. All these challenges are pushing companies to seek superior food safety solutions, thereby providing tailwind to PURE's products.
Disruptive SDC technology with high entry barriers
PURE is commercializing patented SDC-based antimicrobial products (FDA/USDA approved PURE Control and EPA registered PURE® Hard Surface). SDC test data demonstrate proven superior efficacy over a broad spectrum of pathogens, including E. coli, Salmonella, Listeria, Campylobacter and Norovirus, when compared with other products currently in use in the food industry. PURE Hard Surface shows 90% improvement in pathogen reduction on surfaces vs. incumbent products. PURE enjoys extensive competitive barriers in the form of 12 US patents and the unique EPA, FDA and USDA approvals.
Large market size
Management is focused on commercializing SDC primarily for the food-safety-solutions industry which represents a $2.5 billion opportunity (combined for its 2 products). The company is targeting to achieve a market share of ~10% (or $250 million) driven by launch of PURE Control and accelerating sales of PURE Hard Surface Disinfectant. PURE Control has already received a first sales order in the US produce processing aids market ($300 million size), while revenue from the $350 million plus US poultry processing aids market is anticipated soon (F1Q/2Q18). Further, the company is targeting to begin commercialization of PURE Control for $400 million US beef and pork processing aids market by the end of calendar 2018. The sales pipeline for PURE Hard Surface remains robust with three additional national chains and more than 50 food processors evaluating the product for use.
Initiate coverage with 12-month price target of $2.45
We see PURE as a high risk and high reward play on the expanding food safety industry which has seen increased regulatory scrutiny over the last year amid foodborne related illness outbreaks. The target of $2.45 assumes successful commercialization of PURE Control and more traction for the existing products amid stricter compliance standards. Any delay in the launch of PURE Control could adversely impact our target price. Investors need to note the inherent risks involved.
Please review important disclosures on our website at www.seethruequity.com.
About PURE Bioscience, Inc.
PURE Bioscience, Inc. is focused on developing and commercializing its proprietary antimicrobial products primarily in the food safety arena. PURE technology platform is based on patented silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection and formulates well with other compounds. As a platform technology, SDC is distinguished from existing products in the marketplace because of its superior efficacy, reduced toxicity and the inability of bacteria to form a resistance to it. PURE is headquartered in El Cajon, California (San Diego metropolitan area). Additional information on PURE is available at www.purebio.com.
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
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Contact:
Ajay Tandon
SeeThruEquity
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SOURCE: SeeThruEquity