How This Little Company Could be with 3x by 2019

Direct-to-consumer and direct response marketing have become massively successful business models, exemplified by companies like Dollar Shave Club and Casper Mattresses, and they’re getting significant valuations from venture investors.
One of the very few public companies doing this successfully is ImmuDyne (IMMD), which is launching two new products and possibly a third this year. Their first could do $5M alone this year, and combined their portfolio of skin care products and supplements could justify 3X or more of upside in the stock with the right marketing execution.

NEW YORK, NY / ACCESSWIRE / May 10, 2018 / Direct-to-consumer businesses are cash machines. That explains why so few of the names the average investors are familiar with – like Dollar Shave Club, Goop, and Warby Parker – go public.

Top-notch digital marketing and brands that lend themselves to online virality have made some of these names hugely successful. Launched in late 2017, the new baldness and erectile dysfunction company Hims is already garnering significant VC funding. According to Wired.com, Hims has raised $40 million in funding from IBP and Redpoint Ventures, valuing the company at $200 million… amazingly, that’s based on just $ 10 million in sales since November of last year. Dollar Shave Club parlayed their $200 million in 2016 revenue into a full-on takeover by Unilever that year…at $1 billion.

With these kinds of valuations, investors have overlooked a small but dramatically growing direct-to-consumer business in ImmuDyne Inc. (IMMD). The company reported gross revenue of $5.054 million in 2017, yet has a market value of only $10 million – shockingly small for a company with 71% Gross Margins. These sales are coming almost entirely from a successful online-marketed hair-loss product called ShapiroMD, which has done almost $4 million since launching in Q3 of 2017, much like Hims! And, the company is about to launch more nutraceutical products this year. This is a growth story – like Hims, Goop, and other consumer care companies, these are high-margin products, and with rising revenue and a slick digital marketing strategy, IMMD could be on track to triple or more in 2018 and 2019.

Why Direct Response Is So Successful

The success of Warby Parker, Dollar Shave Club, and others lies in their strong digital marketing game. Selling directly to consumers carries the potential to collect massive amounts of customer data, and to build brand loyalty.

Warby Parker hit their first-year sales goal in under three weeks, and the Casper mattress company made $100 million during its first full year in business. Hims, which sells erectile dysfunction and hair loss treatments, is, oddly enough, geared towards millennial – they did $10 million in sales in their first few months after launching in 2017. That was enough to attract top VC money, and the company was valued at $200 million with their latest funding round.

The other major shift in the last decade? Data-driven techniques to improve marketing campaigns rapidly, and make the small adjustments that can perfect the user experience and sales. Fifty years ago marketers mocked up marketing material, polled some focus groups, and put their work out into the world. Today, consumers have become numbers for the best marketers, and the advent of products like Google’s (GOOG) Adwords and Facebook Ads allow companies to know exactly what’s working and what’s not within hours of testing a new campaign.

These successes – and those of other online straight-to-your-door retailers like Amazon (NASDAQ: AMZN) and Shopify (NYSE: SHOP) – in the last five years are an indicator that the way we buy “stuff” and spend our money is changing quickly.

Immudyne Growing Sales Rapidly and Expanding Product Portfolio In Immense Supplement Market

In the last year, direct response marketing has been a huge driver of success for the consumer care company ImmuDyne, Inc., and IMMD appears to be significantly undervalued when measured against its growth and market potential.

Immudyne is a direct response marketing company akin to Hims, with most of their revenue in 2017 derived from the hair loss product, ShapiroMD. The company has two commercial stage products as of this Spring, and two development stage products in their portfolio that should launch this year.

ShapiroMD made up a majority of the company’s $5.05 million in 2017 sales. Since its launch last November, the product has grown quickly to outpace the company’s legacy yeast beta-glucan manufacturing business, of which they divested in early 2018 to a number of the company’s founders.

The subsequent focus on direct response marketing was pioneered with the ShapiroMD line, which has since served over 20,000 customers, with great reviews on Amazon.com. This product is growing incredibly fast.

This March, Immudyne launched their second DTC product, INR Wellness, a once-daily immune system nutritional supplement that contains yeast, oat, and mushroom beta-glucans. With this second portfolio product, revenue from this product could quickly rival that of ShapiroMD, as these are similar markets with similar dynamics.

The hair loss market is a self-pay sector with a 10%+ annual growth rate over the last decade, and currently valued at over $7 billion. Supplements, meanwhile, have grown to $130 billion according to Grand View Research.

Immudyne continues to target large markets with their latest product licensing arrangements in skin care, a $180 billion industry according to Statista. The latest, Purpurex, is an especially intriguing addition for 2018. It’s one of the first oral products for solar purpura (commonly referred to as “Senile Purpura”), a skin condition that affects over 8 million older Americans and manifests as bruise-like discolorations on the skin. The supplement is designed to reduce the appearance of bruising, and the path has been tread before by Galderma with a similar product called Excipial – the market is proven out already. Scarology, a topical product for reducing the appearance of scars, will launch in Q2, and Purpurex later in the year.

IMMD Could Rise By 3X or More With New Products in 2018

Immudyne is making rapid headway in the supplement space, and the stock’s valuation could rise significantly this year with new product launches. The company has proven the model with ShapiroMD — remember zero to over $4 million in sales in months — and with the potential for FOUR products on the market by the end of 2018, revenue could be ticking higher as soon as this next quarter.

What’s that worth?

Just look at Hims, which was valued at $200 million despite only $10 million in sales, essentially valuing the company at 20X their Sales in the private market! Dollar Shave Club sold for 5X their sales last year.

Shapiro MD generated almost $4 million in 2017 revenue. INR Wellness and Scarology could be doing the same by the end of this year, and with continued growth, this could be a $10-15 million business in 2018. Even at a conservative 3-5x Sales multiple, IMMD could be worth $30 to $50 million with the right execution, or more than $1.00+ per share.

Owning IMMD has its risks. The company’s balance sheet may need attention this year if they are to continue bringing in new products, and their success is very much driven by marketing execution. As a microcap, the stock is a high-risk high-reward investment, and it could be worth nothing at all.

Direct response marketers aren’t all winners, but IMMD is quickly proving that they’ve got the know-how with ShapiroMD. Two new product launches in the coming months, and possibly a third by the end of 2018, could justify a substantially higher stock price for IMMD. 2018 could be a breakout year for this undiscovered marketing company.

About One Equity Stocks

One Equity Stocks is a leading provider of research on publicly traded emerging growth companies. Our team is comprised of sophisticated financial professionals that strive to find the companies and management teams that will outperform the market and deliver investment returns to our subscribers. We are not a licensed broker-dealer and do not publish investment advice and remind readers that investing involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for-profit business and is usually compensated for coverage of issuers we cover as well as other advisory work we perform. In the case of IMMD, we are reimbursed for actual costs we incur, received 500,000 shares of restricted stock, and may receive additional compensation for Business Development, Capital Markets, and Research Services. The CEO of ImmuDyne, Inc has a business development relationship with One Equity Stocks, LLC. ImmuDyne management was not involved in the writing or modification of this content in any way. Please contact us at info@oneequitystocks.com for additional information or to subscribe to our intelligence service.

SOURCE: One Equity Stocks, LLC

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