DSS - Impact Biomedical Preparing A Potential Spinoff — What Does This Mean For Investors Of Holding Company DSS Inc (NYSE American: DSS)?
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By Ernest Dela Aglanu, Benzinga
Impact Biomedical, abiotechnology company focused on developing innovative treatments fora wide range of diseases and conditions and one of the key businessesin the DSS Inc. (NYSE American: DSS) portfolio, is preparingfor a potential spinoff that could also have implications for thepharmaceutical industry at large.
The success of this spinoff could presentsignificant growth opportunities for the company. It looks to helpexpand the company’s ownership of a suite ofantiviral and medical technologies, which was valued at $390 million in 2019 by Destum Partners, a global leader ininvestment and advisory services.
The total global pharmaceutical market was estimated at $1.48 trillion in 2022 alone, and as the sector continues toexperience an upward trend, ImpactBiomedical could expect to see growth opportunities.
But one may ask, what isthe fuss about the company spinning off? A spinoff occurs when a company splits off a portion of its business into aseparate company and distributes shares of the new entity tax-free tothe parent company’s shareholders.
Some prominent companies that have pursued spinoffsrecently include 3M Co. (NYSE: MMM), GeneralElectric Company (NYSE: GE), and Johnson &Johnson (NYSE: JNJ).
The good news is such a spinoff can increase ImpactBiomedical’s valuation — and the value of DSS. In May 2020, ImpactBiomedical revealed it had received a valuation of $933 million for a suite of technologyfrom a different independent valuation firm. The valuation may go evenhigher, possibly presenting exciting opportunities forinvestors.
Overall, the spinoff, which is still in the works, may enhanceImpact Biomedical’s research leading to breakthroughs in thedevelopment of new treatments for a wide range of diseases, fromcancer to infectious diseases. It is anticipated that it will enablethe company to focus on its core research and development activitieswithout any distractions resulting in faster innovation and moreprecise targeting of specific disease pathways.
By establishing a new,independent company focused exclusively on its research anddevelopment efforts, the spinoff would enable Impact Biomedical toattract new funding and investment to pursue a more aggressive growthstrategy as it continues to develop its cutting-edge technologies andgroundbreaking research.
The spinoff could warrant a close watch, especially as thecompany says it has established a reputation and loyal following amonginvestors and healthcare professionals.
DSS completed the acquisition of Impact BioMedical in August 2020. In September last year, thecompany dropped hints of the impending spinoff with reports suggesting that the company wasexpected to file an amended S-1. DSS said it aimed to IPO ImpactBiomedical this year, with the valuation to be determined by theinvestment bankers and market demand.
What could be exciting for shareholders is that thecompany plans to keep at least 50% of the spinoff entity, whileshareholders will get a certain percentage. A number of shares will benewly issued to raise capital to support the growth of the newlypublic company.
Since 2019, the company has embarked on a major transformationjourney evolving into a multinational business operating within ninedivisions with over 40 subsidiaries. The divisions and subsidiariesare meant to offer innovative, flexible, and real-world solutions thatnot only provide mutual benefits for businesses and their customersbut also create sustainable value and opportunities fortransformation; Impact Biomedical is an opportunity for an innovativebiotech pure play, and DSS is a way to access Impact and otheropportunities.
Thecompany has reported developing strong footings in biotechnology,product packaging, direct marketing, commercial lending, securitiesand investment management, alternative trading, digitaltransformation, secure living and alternative energy.
ImpactBiomedical’s Products And Development Pipeline
Impact Biomedical drivesmission-oriented discovery and development to pursue new products andtreatment options in specialty biopharmaceuticals and consumerhealthcare. The company reports that its biopharmaceuticaltechnologies have the potential to advance treatment in oncology,neurology, and immunology.
A closer look at the current products anddevelopment pipeline as reported by Zacks Small-Cap Research:
LineBacker: Multi-faceted therapeuticplatform intended for metabolic, neurologic, cancer and infectiousdiseases. In July last year, the company executed a license agreementwith ProPhase Labs Inc. (NASDAQ: PRPH) for its Linebackerportfolio (LB-1 and LB-2), two patented small molecule PIM kinaseinhibitors with significant potential across multiple therapeuticindications.
Equivir: A compound in antiviral infection treatments.Equivir/Nemovir is a novel blend of FDAGenerally Recognized As Safe -eligible natural compounds whichhave potential antiviral effects with additional potentialapplications as health supplements or medication. These compounds aresourced from fruits, vegetables, and other natural substances.
In June of 2022, ImpactBioMedical signed a license agreement with ProPhase Labs to produceand distribute Equivir, which has shown potential as a treatment tolimit the occurrence of or reduce the risk or severity of viraloutbreaks.
Laetose: Laetose technology is derived from a uniquecombination of sugar and other compounds, which demonstrates theability to inhibit the inflammatory and metabolic response of sugaralone. It is a sugar alternative that can potentially lower humanglycemic indexes.
The company believes it is a breakthrough alternative sugarthat could combat diabetes. Using Laetose in a daily diet, compared tosugar, could result in lower sugar consumption and lower glycemicindex/load.
3F: 3F is a unique formulation of specializedingredients from botanical sources with the potential effect as aninsect repellent and an antimicrobial. It can be used either as astandalone repellent or as an additive in detergents, lotions,shampoo, and other substances to provide mosquito protection. Theformulation can also be used as a standalone antimicrobial or as anadditive in detergents, lotions, shampoo, fabrics, and othersubstances.
With asuccessful IPO and spin off of Impact Biomedical, DSS shareholderswould begin to realize the benefits of the company’s strategy ofbuilding shareholder value by distributing stock dividends throughperiodic spin offs.
This article was originally published on Benzinga here .
DSSis a multinational company operating businesses within nine divisions:Product Packaging, Biotechnology, Direct Marketing, CommercialLending, Securities and Investment Management, Alternative Trading,Digital Transformation, Secure Living, and Alternative Energy. DSSstrategically acquires and develops assets to enrich the value of itsshareholders through calculated IPO spinoffs and a parametric sharedistribution strategy. Since 2019, under the guidance of newleadership, DSS has built the necessary foundation for achievablegrowth through the formation of a diversified portfolio of companiespositioned to drive profitability in multiple high growth sectors.These companies offer innovative, flexible, and real-world solutionsthat not only provide mutual benefits for businesses and theircustomers, but also create sustainable value and opportunity fortransformation.
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