Before founding Zynex, Inc. (OTCMKTS:ZYXI) over two decades ago, Thomas Sandgaard was a man who had just moved to the U.S. from Denmark, starting in a one-bedroom apartment, only a humble few thousand dollars to his name. On back of an MBA from Copenhagen Business school and an electrical engineering degree from the University of Southern Denmark, Sandgaard “bootstrapped” his Lone Tree-based medical device maker to become a leading medical device company in the healthcare industry.
Present-day, Zynex continues to grow, with Sandgaard suddenly finding a new need to lease a bigger office and manufacturing space, his eyes on even more gains down the line. Since 1996, the very year Sandgaard paved his way to the U.S., Zynex has made a name for itself in the pain management and rehabilitation market through leading-edge electrotherapy medical devices.
I had the opportunity to catch up with Mr. Thomas Sandgaard this week and ask him a few key questions.
Pain is no small issue, and Sandgaard understands the magnitude at stake as he looks to a pain management device market poised to hit $6.3 billion within six years’ time and a past 20% a global adult population in chronic pain. The advantage of Zynex’s electrotherapy technology comes with a welcome ease of use and a prescription-strength alternative to pain relief that will help patients without any side effects. The goal is to give patients a better shot at not just surviving their circumstances, but enjoying transformative quality of life.
The “immediate” target dominating the Zynex team’s thoughts is capturing the majority market share gladly left over by rival industry sharks that are no longer battling in the home electrotherapy arena. In fact, Zynex’s biggest threat EMPI walked out of the TENS market this time last year, leaving open market share for the taking to the whopping tune of $250 million “for grabs.” Sandgaard sees as much as $400 million in annual revenue to be seized, adding, “Long term we hope to grow the market even further as many more patient can benefit from using our products.”
This CEO’s expectations are lofty, but achievable, hoping to come close to doubling last year’s annual revenue, which would leave this year on a roughly $23 million high note. Sandgaard’s long-term vision turns upon meaningful gains once more by 2018 as Zynex keeps its rising sales force momentum fired up.
Zynex knows how to make a clever, conscious move forward, having added new products in the wake of the threat of opioid addiction that offer prescription strength drug-free options transitioning past electrotherapy. For Sandgaard, the priority rests on physician education, so doctors know to prescribe Zynex’s NexWave device as a first-line-of-defense in the greater battle against opioid abuse society is witnessing today.
Considering Zynex has secured solid insurance reimbursement for its products, Sandgaard is relishing this as “a sign that health insurers generally support our technology as a cost-effective and sound solution to better pain management.”
For a man that has seen a pain management market evolve from the ’90s to past the turning of the millennium, what does the future of the pain management market look like from an experienced gaze? During these two decades that have come to pass, Sandgaard knows his company has not been a standout market leader nor has it driven the market for pain management- yet. Suddenly, times are changing.
With the ebbing threat of competition pulling a disappearing act, Zynex has a new opportunity, and Sandgaard cheers that his team is “now in a position to drive how our products are prescribed.” The CEO is enthusiastic between soaring profitability gaining tracks and a robust direct sales force benefiting from face-to-face contact with prescribing physicians, what the Danish CEO deems an essential part of his company’s tactic to keep the growth rising.
Meanwhile, taking under account the launch of Zynex’s Blood Volume Monitor, the company has a chance to revolutionize the hospital market for gauging blood loss and internal bleeding in a non-invasive manner. Sandgaard’s company has designed the CM-1500 to respond to blood loss in real time. In a potentially three billion-dollar market, this skill could prove valuable should more and more operating and recovery rooms use these monitoring solutions in the long-term picture.
As time passes, Sandgaard notes that fluid management presents itself as the most pressing unmet need circling hospitals today, with the applications of detecting blood loss and internal bleeding as the clear targets for the company’s non-invasive monitor. Zynex’s ambitious founder underscores “tremendous value” in the ability to spot internal bleeding in recovery “before it is too late,” all while aiding in maintaining fluid balance throughout surgery.
It has been a good year for Zynex, as Sandgaard’s brainchild just tackled all $2.2 million owed in outstanding debt over the summer. In the second and third quarters, Zynex has been able to yield consistently stellar positive cash flow, including costs correlated with expanding sales force coverage. The net impact has been impressive: “a rapid strengthening” of Zynex’s balance sheet.
As far as Sandgaard is concerned, cash flow is enough to not only grow Zynex’s business, bolster company infrastructure to lead to a boost in order volume, all while financing the initial Blood Volume Monitor launch. Additionally, the compelling biotech player just revealed a reservation of up to $2 million in a stock buyback program, all with the intent of making Zynex’s stock price stronger.
Over the next 12 months, Zynex will keep sharp focus on branching out revenue along with upholding EBITDA and net income margins. Sandgaard recognizes an uplisting to a senior exchange with the NYSE American or NASDAQ as a key milestone to be fulfilled, one in which the Zynex team is “working diligently” to accomplish.
Not only is Zynex committed to gaining visibility and reaping new profits, but above all, this is an enterprise dedicated to utilizing the best technology and service standards out there in the industry. Seeking to offer pain relief to suffering patients all while spinning out innovations that could change the hospital and surgery center landscape, Sandgaard’s American dream coming to life has been a fulfilling one indeed. Under the Danish CEO’s leadership, Zynex is a dark horse to watch in the biotech sector.
Zynex is a sponsor of Smarter Analyst. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.