Innovus Pharmaceuticals Inc (OTCMKTS:INNV) Is An Undervalued Situation

Innovus Pharmaceuticals Inc (OTCMKTS:INNV) is a name that continues to fly under the radar of most investors. The company has grown revenues from just $700,000 in 2015 to $4.8 million last year and is on track to do $15 million this year, even without an FDA approval for one of its lead products. Despite all of this, the company commands just a $20 million market cap. As we take a closer look, INNV is shaping up to be a perfect discount entry opportunity for long term investors.We have covered INNV on a number of occasions. You can look at our past coverage here and here. As a refresher, INNV is an emerging over-the-counter consumer goods and specialty pharmaceutical company engaged in the commercialization, licensing and development of safe and effective non-prescription medicine and consumer care products to improve men’s and women’s health and vitality and respiratory diseases. The Company is dedicated to being a leader in developing and marketing new OTC and branded Abbreviated New Drug Application products and is actively pursuing opportunities where existing prescription drugs have recently, or are expected to, change from prescription (or Rx) to OTC.While the company is growing significantly, expenses are growing just as fast. The net loss for 2016 was $13.7 million, or $0.15 per share, which included interest expense of $6.7 million, of which $6.4 million was non-cash and related to amortization of debt discounts and the excess initial fair value of the embedded conversion features from the company's 2016 financing. The net loss also included a non-cash expense of $1.3 million for the net change in fair value of contingent consideration. In comparison, the net loss for the year ended December 31, 2015 totaled $4.2 million or $0.08 per common share. So losses are increasing, but this is to be expected at this end of the biotech spectrum.The latest news from the company is that it received the CPNP notification number required to commercialize Sensum+ in all 28 member countries of the European Union. Sensum+ is a non-medicated cream which moisturizes the head and shaft of the penis for enhanced feelings of sensation and greater sexual satisfaction. It is a patent-pending blend of essential oils and ingredients generally recognized as safe that recently commenced marketing in the U.S. The safety and efficacy of Sensum+ was evaluated in two post-marketing clinical survey studies in circumcised and non-circumcised men. A total of 382 men used Sensum+ twice daily for 14 consecutive days followed by once daily for eight weeks and as needed thereafter. Study participants reported a ~50% increase in penile sensitivity with the use of Sensum+.Earlier this month, INNV received the CPNP notification number required to commercialize Zestra in all 28 member countries of the European Union. Zestra is a patented blend of natural oils clinically-proven in double-blind placebo-controlled clinical trials in 276 women to increase in a statistical significant manner the arousal, desire and sexual satisfaction in FSI/AD women. To date, to Innovus Pharma’s knowledge, no product has been approved to treat FSI/AD, a persistent or recurring inability to attain or maintain adequate sexual excitement until the completion of a sexual activity.The big game changer we are all waiting on is FlutiCare. This is the moonshot that we talked about in the past and one that can turn INNV from a $20 million company into a $250 million company overnight. Innovus is looking to pick up FDA approval for over-the-counter marketing in allergic rhinitis in the US (it’s already approved as a prescription pharmaceutical, and is the most widely prescribed asset in its indication) and if the agency gives the company a green light, Innovus will have access to a potentially billion-dollar market in the US alone. On the recent earnings call, CEO Bassam Damaj said:

"We continue our preparation for the launch of FlutiCare in 2017 as approved by the FDA. The management is confident on the prospect of an approval by the FDA in 2017 and we are working diligently on the launch plan and structure not just in retail stores but under our Beyond Human sales and marketing platform as the market since the RX switch has been moving towards a subscription model versus a one unit purchase. And as you know, our Beyond Human platform is very powerful and can reach between 20 million to 30 million potential customers on monthly basis and we believe FlutiCare is approved by the FDA will do very well under our platform with little competition."

Currently trading with a market cap of $20 million, INNV is a compelling story on the OTC Markets. Its current market cap does not reflect this year's expected revenues of $15 million or the potential of FlutiCare. Even without FlutiCare, INNV expects to achieve profitability this year. This will go a long way in getting picked up by more investors and lead to an up-listing to Nasdaq. Overall, INNV looks poised for a banner year.We will be updating our subscribers as soon as we know more. For the latest updates on INNV, sign up below!Disclosure: We have no position in INNV and have not been compensated for this article.