EnWave Announces Positive Results From Testing Process in Collaboration With Merck
Another exciting breakthrough is under way for EnWave Corporation (TSXV:ENW – $1.25 CAD & OTC:NWVCF – $0.97 USD & Frankfurt:E4U – €0.78). This week the Company reported a very encouraging update on the freeze drying process for the pharmaceutical sector, using its proprietary REV technology. EnWave announced that Factory Acceptance Testing has been completed after a thorough development phase at its own R&D facility in British Columbia, in collaboration with Merck. This has resulted in a positive approval for the technology as part of the manufacturing process for certain pharmaceutical products currently being developed by Merck.
The REV freeze drying technology for the pharmaceutical industry provides the capability for continuous processing such that individual dosage units of vaccines, enzymes, antibodies, proteins, probiotics and other small molecule therapeutics may be rapidly dried and packaged.
Testing work focused on achieving specific throughput and capacity objectives established by Merck to demonstrate the processing can deliver consistent performance with regards to production metrics such as moisture content, homogeneity, processing time, etc.
Following this test phase, Merck has advanced to install a 9kW REV machine at its facility in Pennsylvania to undergo Site Acceptance Testing. The install should be completed within a very short time frame.
Site Acceptance Testing will ensure that the equipment performs at the Merck manufacturing complex in line with the same protocol as the original parameters already achieved at EnWave’s R&D test facility. This phase will use vaccines that mimic the reactions of actual vaccines in vials. Since the previous phase already surpassed the performance standards set by Merck, Site Acceptance Testing is not expected to encounter any issues.
Long Term Development Potential in the Pipeline For New Therapeutics
Once the REV machine has cleared the testing phase, it can commence operations for processing of new pharmaceutical products in the pipeline for Merck. According to FDA guidelines, the REV freeze drying process will be considered part of the production protocol for pharmaceutical products. This means that drugs and therapies already approved by the FDA cannot automatically be produced using REV freeze drying without going through the FDA approval process again. Therefore it is unlikely that existing products will retrofit to REV freeze drying. Instead, the processing will be advanced along with new therapies currently under development, to incorporate REV freeze drying as part of the manufacturing protocol that can be approved by the FDA from the outset.
Merck has several new products under development that will become candidates to utilize the REV machine for the potential launch of products in the future. The development regime would involve somewhere between 2.5 to 3 years to gain FDA approval so the actual commercial payoff for this technology is some time ahead.
However, the benefit of this news is that EnWave has once again demonstrated a successful new application for its REV technology. The potential rollout as part of the manufacturing process for established pharmaceutical companies like Merck represents yet another distinct industrial sector where the REV machines are contributing to efficient production of new products.
Positive Outlook Carried Over to Emerging Partnership With GEA Lyophil
Recall that back in July EnWave reported a marketing initiative with GEA Lyophil of Germany. GEA is engaged in the production of freeze drying equipment servicing the pharmaceutical industry. EnWave and GEA have formed an arrangement granting the option to negotiate sales and manufacture equipment incorporating REV freeze drying technology as part of its line of processing machinery. This breakthrough with Merck will further strengthen the relationship with GEA and enable more negotiating clout to attract new clients.
EnWave is now in discussions with other players in the pharmaceutical sector that may also lead to new sales for freeze drying technology, and perhaps down the line building leverage to recurring revenue generation as new drug therapies are approved by the FDA using this technology.
The approach for the commercialization of REV technology involves the creation of new potential applications followed by a successful sales process to reach out to industry leaders and develop effective manufacturing processes. With each breakthrough, the potential market for the Company expands, as other corporations investigate the technology, both domestically and overseas. Often the implied validation of a new technology by one industry leader is the critical factor to encourage widespread adoption for a larger group in the aftermath. This has contributed to a growth trend that continues through to the present.
Another relevant trend is even more significant: EnWave has demonstrated on multiple occasions that a longer term development cycle may be concluded with favorable results due to the efforts from its R&D team working in collaboration with partner companies to advance innovative solutions.
The latest milestone may lead to additional sales orders as other pharmaceutical companies are encouraged to follow the lead and investigate REV freeze drying to manufacture new products. Given enough development time, it opens the prospect that FDA approval will be achieved for at least one of these new products in the pipeline such that a more significant longer term revenue stream may be secured for EnWave in the future.
The key takeaway to the news this week is that EnWave is a Company based on technology and innovation. The skills of its talented team have directly contributed on numerous occasions to sales and royalty agreements that may pay off for long term shareholder growth. As this core competency is applied to generate further breakthroughs in other sectors, the track record of success for the REV processing technology will continue. Recommendation: BUY.
Next week we will publish the highly anticipated interview with EnWave’s President and CEO Mr. Brent Charleton. We will extensively cover the Company’s developments in the pharmaceutical sector, its financial results, NutraDried, outstanding growth opportunities with Bonduelle, the US military, and the cannabis sector. Moreover, we will discuss the departure of Dr. Durance and the broadening of EnWave’s story in the capital markets.
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