WINDSOR, ON / ACCESSWIRE / March 18, 2016 / The Wealthy Biotech Trader (or "WBT"), an investment newsletter focused on showing everyday investors new opportunities in rapidly growing, little-known, biotech, pharma and medical device stocks making news and subsequent market moves, would like to highlight a new stock pick, Advanced Medical Isotope (OTC: ADMD), which WBT believes has the ability to cause a massive paradigm shift in the cancer treatment space, and potentially capture a large segment of the burgeoning internal radiation therapy market. We look to follow this company as they expect to make another FDA submission later this year, which should catapult the stock if they receive the anticipated marketing clearance. We also contrast and compare a few other companies in the industry.
COMPANIES MENTIONED: Advanced Medical Isotope Corporation (OTC: ADMD); Sirtex Medical Limited (ASX: SRX); Accuray Incorporated (NASDAQ: ARAY); IsoRay, Inc. (NYSE: ISR); Actinium Pharmaceuticals, Inc. (NYSE: ATNM)
For over 100 years' oncologists (cancer doctors) have used the archaic radiation "gun" to treat cancerous tumors which is put up to a patient's treatment area (on the outside of the body, but near where the cancer is) shooting harmful rays almost everywhere besides where its needed--on the cancerous tumor inside.
The Next Step Forward: Modern Brachytherapy
Almost as old as radiation treatment itself, brachytherapy is a type of radiation therapy whereby a radioactive substance, such as metal seeds, are placed inside the body near the treatment area, which is slightly more focused than the traditional external "gun" style method, but still very unfocused, dangerous and largely ineffective. Only recently has modern medicine begun to perfect this method of internal treatment, with companies like Advanced Medical Isotope Corporation (OTC: ADMD) paving the way with technology driven solutions to an age old problem.
A long way from the unselective external radiation guns and implanted radioactive products, comes the Y-90 RadioGelä device, a breakthrough therapy in the late stages of development by Advanced Medical Isotope (OTC: ADMD)-- a tiny $8 Million market cap company in the process of making a big mark in the brachytherapy industry projected to reach $2.4 Billion by 2030.
The Y-90 RadioGelä device, which OTC: ADMD holds 8 patents on and trademarks in about 40 different countries, is a biodegradable radioactive gel designed to be injected into any solid tumor as a liquid and then solidifies to hold the radiation in place, effectively taking over the cancerous tumor and destroying it from within. There is nothing on the market like (OTC: ADMD)'s Y-90 RadioGelä device. The devices design features make it suitable for use in a broad range of solid tumors and the company has highlighted potential opportunities in pancreatic and brain tumors. Once the product receives marketing clearance, the Company's solid patent portfolio should secure the cash generation from this idea for many years.
Not only is the delivery system of the Y-90 RadioGel™ device completely novel in a way which multiplies its potential effectiveness, but the radioactive isotope (the cancer killing agent) contained in the gel, yttrium 90, is considered to be the new standard as it has one of the highest theoretical "therapeutic doses" of cancer killing power compared to the many other products on the market.
Further to the extreme potential effectiveness of this product because of its innovative delivery system and extremely strong killing power of yttrium 90, it is actually considered to be safer to the patient sparing healthy cells from being damaged--the well known fear when a loved one receives radiation--as it has a very short average radiation wavelength of 4 millimeters. Other methods utilize isotopes with infinite radiation path lengths, potentially hurting the entire body as its purportedly trying to heal it. Many current patients receiving radiation therapy are quarantined in a private room to protect healthcare professionals and the families of the patients from the harmful rays given off, most of which can be avoided.
On top of all those benefits the company has stated that it feels it can offer treatments below the cost of competing therapies (that are less effective and dangerous), which would be a big hit no matter the outcome of this fall's election (Hillary hates expensive drugs!). Also, when treated with the Y-90 RadioGelä there is no direct need for long expensive hospital stays afterwards (also convenient for the patient).
In business, and more specifically in investing, one looks for companies on the growth path with a sustainable competitive advantage, as Warren Buffet says. ADMD has a product like no other, that could generate the Company massive revenues at the same time as helping many cancer patients in need.
At $0.002, or 2/10's of one cent per share ADMD looks to be a potential lottery ticket considering it seems to be unfairly beat down at these levels due to some unscrupulous convertible debt transactions from about 2 years ago which allowed predatory lenders to drive the stock down by converting debt into stock at lower and lower levels. It appears the company has cleaned up some of that mess and has been financing the company with shareholder-friendly preferred shares. All of the above makes for a poor view from the rear view, but forward-looking investors are now able to pick up 1,000,000 shares for every $2,000 invested.
The next company we will discuss appears to be about 5 years ahead of ADMD, which further highlights their potential given the next company's stock price hit a high this year of $40 (AUD).
Busting Open the Monopoly
Advanced Medical Isotope (OTC: ADMD) is taking internal radiation one step further than current competitor(s). Most brachytherapy (internal radiation) of the past relied on permanently implanting small radioactive metal seeds into a patient in a treatment area--typically for prostate or cervical cancer. This is a very old way of thinking. The type of brachytherapy device (OTC: ADMD) places a safer yet more effective isotope (Y90) inside a cancerous organ and does not dose nearby healthy tissues.
Another company looking to new methods of brachytherapy uses Selective Internal Radiation Therapy, an Australian company called Sirtex Medical Limited (ASX: SRX). Sirtex also uses the wonder-isotope Y-90 to treat liver cancer; only Sirtex uses Y-90 microspheres that are introduced to the liver tumors through their blood supply artery, some of the microspheres then become lodged within the blood capillaries of the tumors and do their killing magic. However, some of this product does travel throughout the body and doses healthy tissue. With a combined 5-year survival rate at a scary 15% (cancer.org), Sirtex has extended the lives of over 5,000 patients last year alone all over the world using its novel approach.
In researching Sirtex we uncovered what appears to be a huge opportunity in the cancer treatment space. For their year ending June 30th, 2016 Sirtex is projected to earn revenues of up to $200,000,000 (analyst estimate, Yahoo! Finance), has a long-standing 40-50% year over year growth rate and EBITDA margins greater than 30%-- these numbers that would make any analyst salivate. Its important to point out Sirtex only treats liver cancer and only has a 2% global penetration.
If this company is generating $200M yearly on one type of cancer, not being the front-line therapy for this indication, and only having a 2% market penetration, what could be the revenue potential for Advanced Medical Isotope Corporation (OTC: ADMD) be if approved?
Both ADMD and SRX have been successful in building a better mousetrap, but instead of just tweaking a design to improve upon it, ADMD has created a mousetrap that catches all the mice without injuring them.
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Some Other Companies Doing Interesting Things in the Radiation Space
Accuray Incorporated (NASDAQ: ARAY) designs, develops, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the body. It offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of various types of cancer and tumors in the body. The company's CyberKnife System automatically tracks, detects, and corrects for tumor and patient movement in real-time during the procedure, as well as enables delivery of precise, high dose radiation while patients breathe normally.
Up 4.35% on the day, ARAY appears to be bouncing off its $5.00 support in what appears to be the potential formation of a double bottom reversal pattern, if the ticker holds that level. On the fundamental front, ARAY appears to have been piling up losses for many years, but the losses appear to be narrowing with analyst's expectations for the year ending June 30th, 2017 at roughly at break-even.
Actinium Pharmaceuticals, Inc. (NYSE: ATNM) is a New York-based biopharmaceutical company developing innovative targeted payload immunotherapeutics for the treatment of advanced cancers. Actinium's targeted radiotherapy products are based on its proprietary delivery platform for the therapeutic utilization of alpha-emitting actinium-225 and bismuth-213 and certain beta emitting radiopharmaceuticals in conjunction with monoclonal antibodies. The Company's lead radiopharmaceutical product candidate Iomab-B is designed to be used, upon approval, in preparing patients for hematopoietic stem cell transplant, commonly referred to as bone marrow transplant.
ATNM is also one that is bouncing off a support line--in a tight channel between $1.70 and $2.70 for about a year now. With situations like this, Wall Street is typically waiting for a catalyst before they will jump back into the stock. If the company sees positive news in the next quarter or so, and regains a strong footing over $4.00, it could trigger a breakout to the upside. The next resistance level after $4 appears to be roughly $6.00. The company is proceeding with its phase III pivotal trial (to advance the drug to commercialization) of lomab-B which could prove to be the needed catalyst as discussed.
IsoRay Medical™(NYSE: ISR) utilizes proprietary technologies to deliver novel brachytherapy approaches to clinicians. IsoRay's Cesium-131 isotope has been used as the primary treatment for prostate cancer in over 7,000 patients. Cesium-131 is being employed as an adjuvant radiation therapy, in the management of non-small cell lung cancer, intra-cranial tumors (including meningiomas), and head & neck malignancies post-surgical resection.
On the topic of technical support and resistance levels, ISR appears to always bounce off the $0.50 level like clockwork (for the past 5 years). With only a cursory look, the company might scare Investors with average gross margins of an anemic 7.2% over the past 4 quarters, but with the sole analyst covering the stock as reported by Yahoo! Finance projecting revenue spikes of 53% and 35% for this year and next, respectively, those margins may improve. More importantly, the company is also reported by the same Analyst to potentially pass the threshold of break-even next year. This may be a situation where a company is under covered by Wall Street, and may start to shine, but Investors may need to weigh the risks and rewards on this ticker as the rate of adoption of this Company's products by the medical establishment will weigh heavily on the final outcome.
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