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November 1st, 2011

Sunny Future for Sunridge

Sunridge International, Inc. (SNDZ) has successfully developed and patented the first and only noninvasive and cost effective treatment for glaucoma, a serious disease that is the second leading cause of blindness in the world. This company is swiftly expanding it’s global distribution networks and is looking now to open company-owned clinics in Canada’s promising market. With a market cap of only [X], this undervalued company could grow significantly in the coming year.

Glaucoma is a group of diseases caused by damage to the optic nerve. As the nerve cells die, blindness closes in from the periphery, like a fist closing slowly over the eye. Vision loss and blindness caused by glaucoma is irreversible.

There is as yet no cure for this disease. It is possible, however, to arrest the development or slow the progression. Glaucoma is often associated with abnormally high pressure in the eye (intraocular pressure), caused by an inability of the eye’s fluid to drain properly. Until now, the only options available to address this condition were invasive surgery or medications in the form of eye drops and pills. Surgery offers only temporary relief, and is often fraught with serious side effects. Medications also induce burdensome side effects and studies have revealed that many patients have difficulty maintaining their medication regiment. Poor compliance with medications is a major contributor to vision loss in glaucoma patients.

The treatment Sunridge offers, developed by their wholly-owned subsidiary Ophthalmic International, is called Pneumatic Trabeculoplasty (PNT), and is a noninvasive method of removing some of the built-up fluid behind the eye, thereby reducing the intraocular pressure associated with optic nerve damage. The treatment takes a total of seven minutes and requires only three or four visits per year to an optometrist. Fourteen years and 12 million dollars invested in testing this treatment have demonstrated its efficacy on patients with primary open angle glaucoma, the most common form of the disease. PNT has no significant side effects and is cheaper than what medications amount to.

Sunridge holds worldwide patents on PNT equipment as well as the medical proce- Sunny Future for Sunridge dure itself. The company has received marketing approval for the procedure and equipment throughout Europe, Asia, and Canada and is actively distributed in [X] number of countries around the world.

In [year] company opened a glaucoma-treatment clinic in Scottsdale, Arizona in order to perform trials for future FDA approval. This clinic has proven very profitable and Sunridge now intends to expand this successful model by opening similar clinics in Canada, with Vancouver as the first location. Based on its experience with the Arizona clinic, Sunridge projects that the clinic in Vancouver will be cash-flow positive by its fourth month of operation. Once successful there, the company intends to raise capital for a rapid expansion.

Canada is a very promising market for glaucoma- treatment clinics. According to their National Coalition for Vision Health, at least 300,000 Canadians are affected with glaucoma. Although the annual cost of blindness in Canada is estimated at close to $1 billion, optometry is very rarely covered by the national health care system. For more than a decade, private clinics have been a growing business in Canada. In an article discussing this trend, the New York Times forecast that Canada would see continuous growth in the private health insurance industry. Canadians are already accustomed to paying out-ofpocket for eye care, but all indications suggest that they will have increasingly diverse financial options for procuring the treatments they choose.

Vancouver is a promising location for Sunridge’s first clinic. As of 2009 the city’s population in the metropolitan area was approximately 2.5 million. According to data provided by the company, 2 percent of Vancouver’s population is affected by glaucoma. Sunridge’s market size is therefore approximately 48,000 patients. Even with the capacity to treat only a fraction of that (4.2 percent, or 2,000 patients), Sunridge estimates that the clinic will be profitable in between two and five months. Vancouver is one of the nation’s largest industrial centers and the cost of living is high. This suggests that Vancouver’s is a population that can, and will, do what it can to prevent glaucoma-induced blindness and handicap. An additional boon to Vancouver’s location is that the clinic will be easily accessible to American patients as well.

Although the clinics are a very promising development, Sunridge will maintain a prudently diversified growth strategy. The company will continue to invest in distribution networks around the world. In addition to Europe, India, and China, in February the company signed an exclusive distribution contract for Turkey as well.

Glaucoma is not a problem that’s going to disappear. Currently the disease affects about 70 million people worldwide, and prevalence is increasing. This is due in part to the increasing proportion of older individuals in the populations of all developed countries. Risk for glaucoma increases significantly with age. In 2010 it was estimated that 8.4 million individuals worldwide were blind from primary open-angle glaucoma (the form PNT addresses). This number is expected to rise to 11 mil lion by 2020. By current estimates about 4 million people have glaucoma in the U.S., though half that number do not realize it yet.

Glaucoma is expensive. In terms of Social Security benefits, lost income tax revenues, and health care expenditures, the cost to the U.S. government is estimated to be over $1.5 billion annually. Glaucoma accounts for over 7 million visits to physicians each year. Also, studies in North America reveal that blindness ranks third (after cancer and heart disease) as people’s greatest fear for their health. As glaucoma increases, so too will attention to it, and individuals’ and communities’ efforts to alleviate it.

Sunridge is at the forefront of a growing market with a product that significantly improves upon existing competition. The PNT treatment is attractive in terms of cost, ease, and efficacy. With two very solid and diverse distribution models underway, the upcoming year could see Sunridge expand considerably. If you’ll forgive the pun, this is a company to keep your eye on.

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