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Advances in cancer treatment make headlines almost daily with frequent approvals of small molecule chemotherapy drugs still leading the approval numbers for cancer treatment. Even with advances in the science of chemotherapy agents, the drugs' safety and tolerability are still often undesirable - many times necessitating the cessation of treatment due to the devastating side effects. Treatments using high-energy radioisotopes can often replace chemotherapy drugs, particularly when the radiation can be concentrated on localized tumors with few or no metastases. The isotopes may also be used instead of resection, when the location of the tumor(s) makes surgery impossible or too risky.

For many cancers, radioisotopes are still the first-line or second-line choice of many physicians as they may elect a combination of therapies to attack aggressive cancers or to help prevent recurrence. Recent advances in radioisotope administration techniques are making radiotherapy safer and more efficacious with more refined cancer tumor targeting. Not confined only to therapeutic applications, radioisotopes are also commonly used for diagnostic imaging of cancers and other diseases in order to ascertain the extent of the diseases, hone in on the actual location of the tumor, and to map blood vessels in tumors and other locations in which blood flow path knowledge is advantageous.

Following are 3 small radiotherapy companies that may begin obtaining more investor interest in 2013 due to early stage successes and additional news coming soon in radioisotope imaging and therapy applications. If the data continue to impress, upside in these companies' share price could be substantial.

Lymphoseek - Diagnostic Imaging Agent with April 30th PDUFA

Navidea Biopharmaceuticals (NYSEMKT:NAVB) is a $340 million market capitalization pharmaceutical that is developing a promising pipeline of diagnostic products. Its stock has been on a solid uptrend since mid-November's $2.14 low and closed Friday at $3.17, down 1.86% on the day. Its lead product candidate, Lymphoseek, completed phase III trials and is awaiting an FDA decision via its April 30th PDUFA date in which an approval is expected on Lymphoseek's use in diagnosing and imaging breast cancer and melanoma. The imaging agent utilizes technetium-99m (Tc-99m) as its isotope of choice for imaging purposes.

During the mapping procedure, Lymphoseek is injected into the tumor of interest and the agent is allowed to follow the drainage pathway that fluids would normally take in order to determine if and how far, as well as in which direction, in the lymph nodes the cancer might have spread. A gamma detection device is used to map the agent's path through the lymphatic system. If approved, Lymphoseek could be used nationwide to map the spread of cancer and determine how much it has spread, better enabling physicians to determine treatment options and priorities.

The company received a complete response letter from the FDA in September of 2012 in which the regulatory agency noted concerns of third party manufacturer deficiencies. According to the press release, the setback "was not related to any efficacy or safety data filed within the Lymphoseek NDA." I anticipate much increased volatility and interest in Navidea's shares in the upcoming days and think approval is a real possibility. With the large markets of breast cancer and melanoma targeted, revenue could be substantial if Lymphoseek is approved and then marketed wisely.

Navidea submitted a marketing application to the European Medicines Agency (EMA) on December 18, 2012 for general lymphatic mapping not restricted to any particular solid tumor type. According to the press release, it is expected that 2.2 million new cases of solid tumor cancers are to be diagnosed in the European Union this year, a huge targeted market. As anticipation builds for the pending EMA and FDA decisions, I expect investors, potential pharmaceutical suitors, and the healthcare sector will be watching closely. Although I believe approval is likely, this is a risky company with much hinging on the results of the PDUFA. If it does not garner an approval, the pending EMA decision provides a cushion against some of the downside risk, not to mention the progression of the remainder of the company's product line in development. Navidea's stock is now trading just under the $3.50 short-term resistance level. A close above that level is a positive sign and indicative that the current uptrend may continue. A retreat from current levels should be monitored closely in order to find a lower entry price.

Radiogel - Therapeutic Targeted Y-90 Administration

Advanced Medical Isotope Corp (OTCQB:ADMD) is a nano-capitalization company with a current valuation of $15.6 million despite a novel radiotherapy product and a growing product line of radioisotopes provided to healthcare companies for imaging and therapeutic purposes. In April 2012, ADMD announced that it had obtained a license to develop and market a novel radioisotope administration platform known as radiogel. The therapy administers yttrium-90 (Y-90) microspheres in a gel-like media, which is injected directly into the targeted cancer tumors. Once the product warms to body temperature, the gel thickens and traps the radioactive Y-90 isotopes within the tumor where it irradiates the tumor locally, without the dangers associated with the radiation spreading throughout the body. The idea is novel and can be utilized with any relevant imaging device to trace the path of the needle to the optimum area within the tumor for the radiogel to be injected. With little news coming out during the remainder of 2012 mentioning radiogel, the company gave investors an update on the development progress of the cancer therapeutic on February 5th.

ADMD noted in the press release that it had submitted data from the radiogel trial to the FDA and had requested a collaborative meeting to discuss the next steps in developing the therapy. Ready to "hit the ground running", the company noted that it is planning on building a facility in Washington state to produce radiogel.

As pertaining to ADMD's radioisotope production business, the recent update also mentioned in it that the company is planning on building a facility in Richland, Washington in which to house a cyclotron capable of producing Tc-99m isotopes to "adequately meet the clinical needs of large urban centers." This news adds to the growing product line and probable customer base such as that of the December 11, 2012 news that ADMD had formed an alliance with Safety by Design, PC, of Colorado, in collaboration with Colorado State University to provide the holmium-166 (Ho-166) radioisotope in the United States Rocky Mountain region's hospitals and healthcare providers. This partnership further solidifies the company's future and adds to its customer base and networking capabilities and should help to further legitimize its business model and bottom line as it continues its growth.

Now trading at $0.20 with a $15.6 million market capitalization, the potential investment gains from current entry prices could be significant as the company further develops its manufacturing capabilities and moves forward with radiogel in 2013. Although the company should be considered a high-risk investment due to its OTC market listing and development-stage status, I think the company's risk/reward profile is good and worthy of a long position. The investment is certainly not for the faint of heart as volatility typically accompanies a small market capitalization's rise due to pending catalysts, but the rewards could certainly justify the current risk level. Like most development-phase small pharmaceuticals, its valuation should be based on its potential revenue due to markets targeted. There are many such pharmaceutical companies to consider that have higher market capitalizations, with no current revenue and no marketed product. ADMD's valuation may soon begin reflecting such possibilities as the investment world sees more growth and potential in the company as developments unfold.

Y-90 clivatuzumab - Novel Radioimmunotherapy Approach

Immunomedics (NASDAQ:IMMU) is a $223 million market capitalization company with a broad-based approach in its product line with products in development for the detection, diagnose and treatment of multiple cancers. On Thursday the company presented quarterly results and an update on its clinical program developments. Although the company has two approved diagnostic products, LeukoScan® and ImmuSTRIP®, I believe its therapeutic product line will be the share price driver for 2013. More relevant to this article is Y-90 clivatuzumab, a Y-90-labeled humanized monoclonal antibody. The antibody targets a mucin antigen that is expressed in most pancreatic cancers, but usually not normal pancreas or other tissues.

Phase I/II data for Y-90 clivatuzumab was presented at the annual American Society of Clinical Oncology (OTC:ASCO) meeting in 2012. Results of the dose-limiting trial indicated that, when combined with the low dosage gemcitabine, the data indicated promising efficacy for pancreatic cancer with less toxicity than comparable treatments. According to the data, 6 patients (16%) had partial responses (PR) according to computed tomography-based Response Evaluation Criteria in Solid Tumors, and 16 patients (42%) had stabile disease (NYSE:SD) as their best response (58% disease control total). The median overall survival was 7.7 months for all 38 patients, including 11.8 months for those who received repeated cycles (46% of the patients), with improved efficacy at the higher radioimmunotherapy doses. The company has been fairly quiet about Y-90 clivatuzumab since ASCO, but is planning a phase III trial, the final design of which will likely be decided upon after a current phase Ib trial progresses a bit farther. According to Thursday's company update, "This quarter we were able to continue our planned clinical and R&D activities, including the Phase Ib trial of clivatuzumab, which is accruing pancreatic patients with two or more prior therapies ahead of schedule," commented Gerard G. Gorman, Senior Vice President Finance and Chief Financial Officer. "To support a future Phase III program of clivatuzumab in pancreatic cancer, we plan to continue reviewing sources of financing, which may include potential payments from partners, licensing arrangements or other financing alternatives, in addition to monitoring our operations closely," Mr. Gorman added." While Y-90 clivatuzumab appears that it is being readied for the phase III trial, the company will need funding. This funding could be in the form of a stock offering, partnership, licensing or other means of income to take it to the next level.

Friday's $2.94 close is just above the stock's 52-week low of $2.70, trading on the 20-period simple moving average (NYSE:SMA). Short term support is at $2.85 with some resistance at $3.00. As of December 31st, the company had cash and equivalents of $21.4 million, which the company stated as sufficient to fund its operations through "at least the next six months." However, this likely does not include expenses for a phase III trial startup, as the company is obviously attempting to secure financing via some other means for that program. A partnership or some type of nondilutive financing would probably be construed as a positive event, with solid upside there for the company's stock. However, a stock offering could still be in the plans, and investors should consider this when making their investment choice.

These are three clinical-stage pharmaceuticals with much promise in 2013. Although much reward can be had from current entries, additional due diligence is advised with special attention paid to share structure, targeted indications and financials as well as stock technicals. I believe ADMD to have the best entry at current levels with an already proven and growing customer base in its radioisotope production business.

Radiogel, at the company's current valuation, is simply "icing on the cake" and the stock would have little downside if the product runs into issues, but could provide for substantial upside if it proves itself to be effective and marketable. Navidea's Lymphoseek appears to be destined for approval, but nothing is certain when dealing with regulatory decisions and the FDA; so substantial downside could exist if the company is dealt a setback as I believe approval is rapidly being built into the company's near $400 million valuation. IMMU, although it appears to have much going for it with two marketed products and a diverse pipeline, is experiencing downside pressure on its chart with the company's shares trading just off its 52-week lows.

Despite the advances in new and improved cancer treatments, radioisotopes, and the associated treatments, still appear to have a promising and perhaps even growing presence in the fight against cancer and other diseases.

Source: 3 Small Cap Radiopharmaceuticals With An Exciting 2013 Ahead

Additional disclosure: I may initiate a long position in ADMD over the next 72 hours.