Company Overview
PetVivo Holdings, Inc. (OTCQB: PETV) is an emerging biomedical device company focused on the manufacturing, commercialization, and licensing of innovative medical devices and therapeutics for animals. With a proprietary portfolio of 19 patents, the company has developed a pipeline of products aimed at addressing prevalent unmet medical needs in the veterinary market, particularly for companion animals like dogs and horses.
The company was incorporated in March 2009 under a different name and entered its current business in 2014 through a reverse merger with PetVivo, Inc., a Minnesota-based company. In April 2017, PetVivo further expanded its capabilities by acquiring Gel-Del Technologies, Inc., another Minnesota-based corporation, through a statutory merger. Both PetVivo, Inc. and Gel-Del Technologies, Inc. became wholly-owned subsidiaries of the company. PetVivo's primary focus is on commercializing and licensing products for the veterinary market, specifically targeting the treatment and management of afflictions in companion animals such as dogs and horses.
Lead Product: Spryng
In September 2021, PetVivo began the commercialization of its lead product, Spryng with OsteoCushion Technology. Spryng is a veterinarian-administered, intra-articular injection designed to help reinforce and augment articular cartilage tissue for the management of lameness and other joint-related afflictions, such as osteoarthritis, in horses and companion animals. This innovative product consists of biocompatible and insoluble particles that are slippery, wet-permeable, durable, and resilient, enhancing the force cushioning function of the synovial fluid and cartilage. Leveraging its proprietary biomaterials that mimic the natural composition and structure of cartilage, Spryng aims to provide a biocompatible, lubricious cushion to the joint, protecting the remaining cartilage and bone.
Spryng is composed of collagen, elastin, and heparin, similar to components found in natural cartilage. These particles aim to reinforce and/or augment the cartilage, enhancing the functionality of the joint by providing cushion or shock-absorbing features and joint lubricity. Unlike many current treatments that only address symptoms, Spryng has been clinically shown to address the root cause of lameness, which is missing or damaged cartilage.
Market Opportunity
The global animal health market is projected to grow from $53.8 billion in 2021 to $71.1 billion by 2026, at a CAGR of 5.8% during the forecast period. Within this expanding landscape, the U.S. animal health market is expected to double from $5.7 billion in 2021 to $11.3 billion by 2023. PetVivo is well-positioned to capitalize on this growth, having commenced the commercialization of Spryng in the second quarter of fiscal 2022 and steadily expanding its distribution network and market presence.
Osteoarthritis, a key target for Spryng, affects approximately 14 million dogs and 1 million horses in the $11 billion companion animal veterinary care and product sales market. However, veterinary clinics and hospitals have very few treatments or drugs for osteoarthritis in pets, as current solutions only address the symptoms rather than managing the underlying cause. This presents a significant opportunity for PetVivo's Spryng product.
Financials
In the fiscal second quarter of 2025, PetVivo reported revenues of $201,000, a 62% sequential increase driven primarily by substantial growth in distributor sales, which were up 147% or $101,000 sequentially and 24% or $33,000 year-over-year. The company has maintained favorable gross margins of 89.5% during this period. However, revenue was down 3% year-over-year at $200,720, compared to $207,370 in the same period of the prior year. This slight decrease was attributed to the company's transition from the equine market to the larger companion animal market, which required onboarding of new sales staff.
For the three months ended September 30, 2024, cost of sales remained relatively flat at $21,160 compared to $21,860 in Q2 2023. The company's operating expenses decreased from $3.13 million in Q2 2023 to $2.35 million in Q2 2024, primarily due to reductions in general and administrative expenses as well as sales and marketing costs related to the commercialization of Spryng.
As a result of these cost-cutting measures, PetVivo's operating loss improved from $2.94 million in the prior year quarter to $2.17 million in Q2 2024. The company's net loss for the three months ended September 30, 2024 was $2.18 million, or $0.11 per share, compared to a net loss of $3.66 million, or $0.28 per share, in the same period of the prior year.
For the most recent fiscal year (2024), PetVivo reported revenue of $968,710, a net loss of $10.96 million, operating cash flow of -$7.42 million, and free cash flow of -$7.73 million.
Growth Strategy
To further accelerate growth, PetVivo has been strategically expanding its sales and marketing efforts. The company has added experienced sales and marketing personnel to support its growing distribution relationships with industry leaders, including MWI Veterinary Supply Co. and Covetrus North America LLC. PetVivo has also been actively participating in major veterinary conferences, such as the American College of Veterinary Surgery Summit and the International Veterinary Academy of Pain Management Forum, to build awareness and showcase the benefits of Spryng among key opinion leaders and decision-makers.
The company has successfully expanded distribution to over 800 clinics across all 50 states, with over 10,000 animals treated to date. PetVivo expects to grow the number of clinics using their Spryng product to over 1,500 clinics before the end of the fiscal year 2025.
Liquidity
Regarding its financial position, PetVivo reported cash and cash equivalents of $126,000 as of September 30, 2024. Subsequent to the quarter, the company raised an additional $312,500 in net proceeds, further strengthening its ability to execute on its growth strategy. The company's debt-to-equity ratio stands at 1.27, with a current ratio of 0.67 and a quick ratio of 0.47. PetVivo ended the quarter with a working capital deficit of $611,630 as of September 30, 2024.
Future Outlook
Looking ahead, PetVivo anticipates continued revenue growth, with the company projecting approximately $1.5 million in revenue for the full fiscal year of 2025, representing over 50% growth compared to the prior year. This guidance remains consistent with the company's previous projections. This optimism is driven by the company's expanding distribution network, the completion of additional clinical studies, and a more efficient operating structure following strategic cost-cutting initiatives.
Challenges and Conclusion
Despite the challenges faced by the company in its early stages, including a notable legal dispute in 2020 with a former employee, board member, and consultant, David Masters, which was resolved through mediation in 2022 for a one-time payment of $180,000, PetVivo has demonstrated resilience and a steadfast commitment to delivering innovative solutions for the veterinary market. As it continues to execute on its growth plan, the company's ability to capitalize on the sizable and growing animal health market opportunity will be a key factor in its long-term success.
PetVivo believes it is now in the strongest position to capitalize on the $5.7 billion U.S. animal health market, which is projected to double to $11.3 billion by 2023. With its innovative Spryng product addressing a significant unmet need in the treatment of osteoarthritis and other joint-related afflictions in companion animals, PetVivo is well-positioned to capture a meaningful share of this expanding market.