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  • Owner of unique proprietary dehydration technologies
  • International exposure across three sectors: food, cannabis and pharmaceutical
  • Strong pipeline of deals that is delivering incremental revenue growth
  • Cutting edge development in the field of dehydrating medicines for easier storage and transportation

Dehydration technology could change the world, and soon. We are not exaggerating here. Dried food is something we are already familiar with, but technology is now pushing out the boundaries of what is possible.

TSX.V-listed EnWave Corporation is sitting on a potential tech goldmine with its REV (Radiant Energy Vacuum Dehydration) process. REV is a rapid, low temperature drying method which can allow a product to maintain its essential colour, flavour and nutrients. Using microwaves and vacuum, it provides a uniform drying process which is already highly valued by food producers.

The two main areas the technology has been used in recently are the drying of food products – e.g. fruit, vegetables and dairy products – and cannabis/hemp. For example, REV is already being used to maintain the active cultures in puffed yoghurt snacks, something that cannot be achieved with high temperature conventional drying.

EnWave is already the recognised leader in the development and deployment of this technology, but has been flying under the radar of many investors outside Canada.

The company essentially has two divisions – EnWave Corporation itself manufactures and sells or licenses its technology globally using its dehydration machines, which come in varying levels of scale. It also has a second division, NutraDried Food Company, which manufactures, markets and sells all natural dairy snack products in the US.

Early work in the pharmaceutical sector

We are also very interested in the company’s work in the pharmaceuticals sector. Here, it has the potential to dry vaccines, allowing them to be shipped more cheaply and efficiently. It could also mean that vaccines may be transported without the need for cold storage.

Yes, you read that right. At a time when we are shipping vaccines all over the world in huge quantities and at great expense, EnWave Corporation’s REV technology holds out the prospect of being able to transport them without refrigeration at all. This applies to other medicines as well.

REV offers the pharmaceutical market the opportunity to transport vaccines far more cheaply, produce vaccines on a continuous basis (fewer bottlenecks), and use smaller facilities. When we look at the possibilities it offers for the distribution of vaccines into developing markets, they seem enormous.

EnWave recently announced that it would be working with MedImmune Limited, an affiliate of AstraZeneca, via a material transfer agreement, to facilitate the trialling of REV technology for the dehydration of monoclonal antibody formulations. Proof of concept trials started this summer. We think the deal has major implications for EnWave, as monoclonal antibody treatments are already being used to assist Covid victims.  EnWave has also forged a relationship with Merck for the drying of several vaccines and a strategic partnership with GEA Lyophil, the global leader in pharmaceutical lyophilisation.

EnWave Corporation productivity gains and deal flow

REV also seriously cuts down the drying time for products, from days to hours. Currently many food manufacturers still rely on air drying or freeze drying – e.g. pineapples can take over 72 hours to freeze dry. With REV technology this can be achieved in under two hours. That is a massive productivity margin. For means of reference, air drying of pineapples still takes around 13 hours.

The deal flow coming through EnWave looks substantial. It recently inked an agreement with an undisclosed dairy company in Colombia to support the manufacture of shelf-stable cheese snacks. EnWave typically sells its technology via machines which companies can install as part of their manufacturing process. In the case of Colombia, it has also conferred an exclusivity deal linked to minimum royalty and machine order requirements.

In the last quarter alone EnWave has signed several deals with food manufacturers and distributors, demonstrating the demand for its core dehydration technology. This included a royalty-bearing commercial license agreement with Europe Snacks Group and a global strategic partnership with Dole Worldwide Food & Beverages. The company even installed a 10kW machine for the US Army at Bridgford Foods Corp for the advanced development of Close Combat Assault Rations field testing.

A similar deal was also recently signed with Medical Kiwi, which has also purchased a GMP REV machine to dry cannabis flowers for medical products.

For the cannabis sector specifically, the technology is of especial value – its fast, gentle drying process removes moisture homogenously from cannabis at selected low temperatures below the point of decarboxylation. This means the cannabis derivative retains more terpenes and equivalent or higher cannabinoids when compared to traditional rack or room drying methods.

Solid Q3 results

EnWave recently issued its latest set of financials (to 30 June): it reported consolidated net income of C$670,000 for Q3 2021, compared to a net loss of C$1,16m for Q3 2020. That is a substantial step up in commercial momentum, which the company attributes to the ongoing commercialisation of its technology across all three of its product segments. Consolidated revenue is up 23% while overall revenue from the sale of REV machines has increased by an impressive 121%.

It should be noted that EnWave is continuing to conduct advanced research in dehydration technology on a range of products – e.g. it is trialling its TerpeneMax advanced drying protocol for the cannabis market, as well as product development studies in the all-natural cheese snack space via its NutraDried subsidiary. This is in addition to its work in the biomed space.

What we think of EnWave Corporation

We think EnWave Corporation has a number of factors going for it.

Firstly, it has proprietary technology, which is obviously in demand, and can be deployed globally. Secondly, the REV technology has huge advantages in terms of time, cost and productivity for manufacturers and distributors at a time when supply chains are under increasing pressure. Its applications within the pharmaceutical market are of enormous potential. Finally, the latest set of results look very positive, demonstrating the company’s ability to turn a respectable profit while under the pressures of the pandemic.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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