- May 13, 2021
INVO Bioscience stands on the cusp of big things. The Lakewood Ranch-based medical device company focused on infertility treatment is about to embark on what it hopes will be its next stage of growth.
“A lot of the pieces have come together for the company,” INVO Bioscience CEO Steven Shum says. “It’s been a long journey. But these last two years, some of the key elements got put on top of the early building blocks and have set the stage to really accelerate our commercial activities.”
A big block was a public offering in November 2020 that raised more than $11 million and moved the company from the over the counter to the Nasdaq market. “We feel that helps open up the door to a broader set of investors who can partner with us as we continue to build the company from here,” Shum says.
‘A lot of the pieces have come together for the company.’ Steven Shum, INVO Bioscience
The raise is a big boost for the company, which posted $1.48 million in revenue in 2019, with an operating loss of $1.78 million, according to public filings. The loss in the trailing 12 months through the 2020 third quarter, filings show, is even greater, at $4.48 million.
Even before the capital offering, INVO Bioscience has also been steadily building up its team, adding staff and new board members and creating a scientific advisory board. A Lakewood Ranch corporate park office has been its official home base since 2019 (the company’s COO and some other employees work there), but the company outsources all of its manufacturing and drop ships its products. Staff is located around the country and world. “We’re very much a virtual company; our team is spread out all over the place,” says Shum, who is based in Oregon. “So COVID-19 has not been overly disruptive to our internal activities.”
It plans to keep its Florida headquarters — utilizing the tax advantages and other business-related benefits of a Sunshine State HQ when it turns a profit. “Being based in Florida will be good for us later on, for sure,” Shum says.
Getting to profitability will require a combination of marketing, customer education and continuing product development for the company, founded in 2007 under the initial name Bio X Cel. It went public in December 2008 via a reverse merger.
Using a process and product first developed by founder Dr. Claude Ranoux while working at a French fertility clinic, the INVO procedure utilizes the INVOcell device for in vivo incubation of eggs and sperm during fertilization and early embryo development. Unlike in vitro fertilization, where eggs and sperm develop into embryos in a lab, the INVO procedure uses the women’s vagina as an incubator during fertilization and embryo development.
This alternative addresses two major issues in the infertility space: affordability and capacity. About 10% of American women have trouble getting or staying pregnant, but IVF is a costly procedure often not fully covered by insurance. The INVO procedure, company officials say, produces pregnancy rates that are comparable to traditional IVF treatments, at about half the cost of a traditional IVF procedure.
Also, there are fewer than 500 fertility clinics in the U.S., which Shum says isn’t a lot relative to patient needs. Fertility treatments additionally require lab equipment and trained staff to run and monitor that equipment. “There are just inherent capacity constraints within the industry,” he says. “That is a challenge even globally speaking in markets where the cost of IVF is much lower, the inherent ability to even treat the volume of patients who need care.”
With the INVO procedure, the incubation period occurs in a patient’s own body and home, not a lab, so less equipment and monitoring are needed. “INVO has a lighter footprint on clinic and lab resources; our device becomes the replacement of that sophisticated lab incubator,” Shum says. “We essentially add capacity to the industry.”
INVO Bioscience laid the groundwork for its next stage of growth by reaching a U.S. commercialization agreement in January 2019 with Ferring Pharmaceuticals, which was already established in the fertility space. Ferring serves as the company’s exclusive distribution partner in the U.S., selling INVOcell directly to fertility clinics and taking distribution tasks off INVO Bioscience’s to-do list. Ferring has annual purchase requirements to retain exclusivity, which escalate each year during the seven-year initial contract. “We teamed up with a good partner and a good brand name in the fertility space, and for a small company it’s a good financial arrangement,” Shum says.
INVOcell is currently available at more than 100 U.S. fertility clinics, so there’s still room for growth there. One company goal for 2021 is working with Ferring to increase awareness of the treatment option among both patients and physicians.
INVO Bioscience is also working to grow its international footprint. The company has forged distribution or joint venture agreements in several African, Asian and European countries. Sales should start happening this year as some of the earlier deals complete the regulatory process, and Shum also expects to add more international partners this year. “I do believe that 2021,” he says, “will be the year we start to generate international activity and sales on our technology.”