Healing or replacing tissues and organs damaged by age, disease, or trauma is no longer the stuff of science fiction thanks to advancements in organ transplants. The only problem is that the current therapy of transplants to treat organ and tissue failures and losses suffers from limited donor supply and often severe immune complications. Luckily, regenerative therapy is addressing most of these challenges, which has created an industry that could be worth over $200 billion by 2030. For investors interested in capitalizing on this massive opportunity, one company that should be closely watched is HippoFi, Inc. (OTCPK:ORHB).  

HippoFi, Inc. (OTCPK:ORHB) develops and delivers cutting-edge healthcare innovations and proprietary technologies through an extensive sales channel network, while implementing first-to-market solutions in the biotech, fintech, and artificial intelligence (AI) markets. The company has three segments: Regenerative Therapeutics, Digital Payments, and AI, and utilizes the same customer channels to commercialize solutions, drive revenue, and improve patient outcomes.

PUR Biologics, HippoFi’s flagship subsidiary and regenerative therapeutics division, offers a portfolio of innovative biological products and proprietary technologies for bone growth in surgical spine procedures and advanced autologous cell therapies for regenerating cartilage in joints and spinal discs. In addition to that, PUR is developing novel, patented, and proprietary related segment products for future 510(k) submissions, featuring treatments using cell therapy and fostering pain management. 

Over the past couple of quarters, HippoFi, Inc. (OTCPK:ORHB) has hit a number of significant corporate milestones that have helped it gain substantial momentum in the regenerative therapeutics market and will be instrumental in unlocking more shareholder value.

For instance, the US Patent Office recently issued a new patent to PUR Biologics for advanced cartilage regeneration and arthritis solutions. This newly granted patent, marks a significant advancement in addressing the debilitating effects of osteoarthritis and cartilage degeneration. At the moment, more than 350 million people across the world and nearly a quarter of American adults have arthritis, clearly illustrating the opportunity for PUR’s solutions. 

This same year, the company was awarded another patent for its groundbreaking technology, which activates immune cells, ushering in a new era of medical treatments for patients with immune-compromised and chronic pain conditions.

Growth through strategic partnerships

HippoFi, Inc.'s (OTCPK:ORHB) potential opportunity in the regenerative therapy market is substantial, and there’s strong evidence to suggest that the company could become one of the key players in this market that is projected to be worth almost $200 billion by 2030.

PUR Biologics' diverse range of biologic products have met stringent quality standards and demonstrated results in several therapeutic areas. That’s why, on June 27, the company obtained national approval to sell its comprehensive portfolio of biologic products throughout the Veterans Health Administration (VHA), which is essentially the largest integrated healthcare system in the United States. 

The VHA currently serves over 9 million veterans enrolled in the VA health care program. With 1,298 healthcare facilities, including 171 VA Medical Centers and 1,113 outpatient sites of care. This channel is set to become a major driver of sales for the company and is HippoFi’s largest sales milestone achievement to date. PUR Biologics continues to add new distributors to our national sales network, including targeting those selling specifically to the VHA.

HippoFi, Inc. (OTCPK:ORHB) also recently revealed that it had signed an exclusive licensing deal with Italian biomedical manufacturing company BPB Medica, which specializes in the design, production, and marketing of high-quality healthcare products for medical use and medical surgery devices in Minimally Invasive Surgery. BPB Medica offers medical products for percutaneous interventions in the spinal, diagnostic, regenerative medicine, and assisted reproduction fields.

The deal sets the stage for the US launch of PURmarrow360, a safe and simple surgical device that has specifically been designed to selectively capture a patient's own bone marrow aspirate (BMA) and mesenchymal stem cells (MSCs). Surgeons can then combine these valuable, patient-specific live cells with any allograft, allogenic, or synthetic bone substitute during surgery. PURmarrow360's launch in the US will be a game changer considering the number of advantages it has over current solutions in the market, as shown below:

"The design of PURmarrow360 represents an advancement in the field of stem cell technology and is a safer and more effective surgical solution than the use of allogenic (cadaver donated) bone grafts containing viable mesenchymal stem cells (MSCs). These cellular bone matrices (CBMs) can carry significant risks that can be eliminated when PURmarrow360 is used as an alternative," explained CJ Wiggins, Executive Chairman and CEO of HippoFi.

Another major milestone for HippoFi, Inc. (OTCPK:ORHB) is its recent partnership with global medical technology company Zimmer Biomet (NYSE:ZBH) that will combine their expertise to introduce a novel synthetic biomaterial for bone growth, set for a 2024 launch. HippoFi has already acquired FDA 510(k) clearance for ActiveOrb technology while also securing an exclusive global license to the underlying technology for the spine market from Zimmer Biomet. Both entities have also engaged in a joint commercialization research agreement, with Zimmer Biomet overseeing the production of the spine-specific product under the PUR Biologics brand.

Last year, HippoFi, Inc. (OTCPK:ORHB) signed a distribution partnership with industry segment leader Precision Spine that has so far driven major demand and sales growth across the company’s products. The deal allows HippoFi to sell Pur Biologics products alongside Precision Spine's implant portfolio, with the partnership expected to speed up the commercialization of the regenerative products through Precision Spine's brand recognition.

HippoFi still continues to establish exclusive and global sales channels through partnerships with top Orthopedic and Spine companies, continuing to grow its distribution network. Currently, the company’s 207 sales distributors offer the complete PUR biologic line to its existing customers, which comprise 280 hospitals and roughly 340 spine surgeons who perform 800 of these surgeries per month. 

To put things in perspective, a study by Transparency Market Research predicts that the spine biologics market's value will increase to at least $3.5 billion by 2031, driven by the creation and marketing of sophisticated stem cell treatments. 

Financials 

Hippofi’s path to profitability is quite clear, despite the fact that it did not generate material revenue for FY22 through the first six months of FY23E. During this period, HippoFi, Inc. (OTCPK:ORHB) engaged in R&D and shifted its model and focus following the PUR Biologics acquisition in late 2022. However, now that the acquisition has been closed and The VHA, BPB Medica, and other strategic partnerships have been finalized, it appears that sales will start ramping up in the second half of the year. 

As a matter of fact, Goldman Research analysts issued a research report with a revenue forecast of $2.9 million for FY23, which would only reflect two quarters worth of business. Looking further ahead, Goldman Research projects revenue of $28 million for FY24E and $75 million in FY25E, driven by the current line and relationships, along with the timing of an estimated 510(k) product and other in-licensed technology. 

These projections are quite achievable considering ORHB’s multiple addressable markets, like spinal biologics and immunotherapy, which are expected to surpass $3.5 billion and $200 billion, respectively, in the near term. Add that to the fact that the company’s proprietary PURmarrow360 innovation is applicable to approximately 91.6% of the 1.62 million spinal fusions currently being performed in the US, and it's clear why investors should keep an eye on this stock. At the moment, Goldman Research has a price target of $0.38 for ORHB over the next 12 months, which implies a potential upside of over 10x from current prices.

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