Competitive Technologies Issues Another Stunning Press Release

Of the stocks I've written about, Competitive Technologies (CTT) has performed the worst prior to July 30. The Company owns manufacturing and worldwide distribution rights to a highly effective and demanded pain relief device and reported, in May, guaranteed sales of $25M in 2009 and $50M in 2010. Investors were apparently induced into "panic-mode" by Q3 FY09 earnings which, like recent years for CTT, stank. The selloff since then was entirely unwarranted and gave me the opportunity to 4x my position 30% cheaper than I initially bought in. It sincerely amazed me that a quarterly report consistent with recent performance would cause a NYSE traded stock to tank, given that the Company's bright future prospects remained unchanged and no revenues were reasonably expected for FY09.

On July 30 CTT issued the following report, outlining a domestic distribution agreement for the device:

Competitive Technologies Signs U.S. Distributor for Pain Therapy Medical Device

FAIRFIELD, Conn., Jul 30, 2009 (GlobeNewswire via COMTEX) -- Competitive Technologies, Inc. (NYSE Amex:CTT) announced today that it has signed an agreement with Innovative Medical Therapies, Inc. (IMT) granting them exclusive distribution rights to CTT's pain therapy medical device in the United States and related territories excluding selected Federal agencies. The contract provides for minimum monthly cash payments to CTT totaling over $1 million for the first five months. These minimum monthly payments increase throughout the term of the agreement with the fourth year minimum payments reaching $9 million and eighth year minimum payments of $21 million. IMT will receive shipments of CTT's pain therapy medical device in return for these payments.

IMT CEO Michael Clinton welcomed the opportunity to bring the pain therapy medical device to the many thousands of people suffering from chronic neuropathic pain, stating, "We believe that this pain therapy medical device will revolutionize pain treatment for many people suffering from intractable pain. No longer will harmful and addictive drugs be the first treatment option. On the contrary, the CTT medical device, having no side effects and substantial clinical success will be the new future to treat chronic sufferers of neuropathic pain."

IMT intends to immediately deliver and begin training leading oncologists and spine specialists, along with their technical staff who have already agreed to further confirm the patient benefits and effectiveness of the CTT medical device.

Seven sales agreements for the pain therapy medical device are now in place for 42 countries around the world accounting for over 50% of the world's population. CTT has exclusive worldwide rights to this device. The device has U.S. FDA 510(k) clearance for U.S. sales, as well as Medical Device CE certification from the E.U., allowing sales throughout Europe and several other countries.

CTT and its partner, GEOMC Co. Ltd. of Seoul, Korea, have completed a strategic update conference at CTT's headquarters in Fairfield, CT, reviewing the sales and manufacturing progress on the pain therapy medical device. GEOMC has current manufacturing facilities capable of commercially producing 200 pain therapy medical devices per month and the partners have agreed to expand production capacity to an increased production level of 600 units per month to match increased order demand.

Young Hyun Lim, GEOMC's CEO stated, "Our firm has invested over $3 million for the design, tooling and manufacturing facilities for this device. We are quite pleased with the sales progress and are fully committed to ramp up the manufacturing capacity to support the worldwide order pattern."

This medical device has successfully treated over 3,000 patients in Europe and dozens of patients in the U.S. at hospitals and pain therapy centers. CTT's pain therapy medical device is currently being used by clinical investigators at the Virginia Commonwealth University Massey Cancer Center for independent clinical research to examine the device's ability to decrease pain associated with chemotherapy-induced peripheral neuropathy (CIPN).

The device has been used to successfully treat over 20 wounded warriors at the Walter Reed Army Medical Center. The treatments were for pain from loss of limb, back injuries, and other neuropathies. CTT distributor Native Energy and Economic Development, LLC is working with CTT executives and the Department of Veterans Affairs (VA) seeking general funding for the use of the pain therapy medical device at the over 1,500 VA installations

Several patients were successfully treated at Dr. Jeffrey Perry's Pain Diagnostic & Rehabilitation Center on Long Island, New York, where the patients suffered from extreme pain resulting from failed back surgery and bulging or herniated spinal discs.

The University of Miami Hospital is in the process of receiving one of CTT's pain therapy medical devices for treatment trials of patients at their prestigious Pain Management Center.

"This distribution agreement is a major step in our ongoing aggressive sales program for this medical device, " said John B. Nano, CTT's Chairman, President and CEO. "We previously signed an agreement for sales to selected U.S. government agencies, including the Department of Veteran's Affairs (VA), the Department of Defense (DOD), and the Indian Health Service (IHS). We are continuing our review and selection process for additional distributors worldwide. Our device, which offers relief to patients suffering extreme pain, provides a valuable tool to the clinician in offering an effective treatment program that can positively impact the quality of life of a patient without the harmful side effects of painkilling drugs."

The pain therapy medical device utilizes an innovative process by applying a low electrical current to the pain pathway, which results in the patient's brain receiving a "no pain" signal. For more information on the pain therapy medical device, visitwww.CalmareTT.com.

This stock is traded very thinly and is about as volatile as any, so I don't recommend taking a large position. Still, CTT trades for less than it did last year, when it was simply looking for technology to acquire and had very little in its pipeline. Other technology should contribute additionally to shareholder value and, at $20M, this company has great upside, having traded at over $100M in 2005.

Disclosure: Long CTT

Comments

[Danny Furman:]

...Perhaps you don't understand the neurology because you don't have a brain, but even I know that pain is a neurological, not physical phenomenon. Saying a machine can't do what drugs do is HAW HAW ignorant.

www.massey.vcu.edu/new...
www.emaxhealth.com/45/...

Jul 31 09:02 AM

[Danny Furman:]

earned $0.78/share in FY05

Jul 31 10:04 AM

[David Greene:]

Have you been following the progress at CTT, Mr. Furman? They have already announced the sale of 70 units--so it looks like their current quarter could conceivably have revenue for 53 units recognized.

And the clinical trials on the clinical data for patients suffering from Chemotherapy-induced neurapathy started in May. It seems that 6 months would be plenty of time to compile results in a non-invasive trial.

For a company with only about 10 million outstanding, CTT really has all the hallmarks of having a substantial run up in price once they start reporting the revenue increases quarter by quarter. Chronic pain management is a HUGE market--mostly dominated by prescription drugs. But many patients do not respond well to these drugs--and non-invasive treatment would be well-received.

The institutional ownership is gravy---if the sales ramp up like I believe they will, any substantial long term investment buying by the institutions would reduce the real world public float and the demand could get CTT over $5.00/share rather quickly. And the market cap at that price would still be only $50 Million.

Curious about your opinion--or if you are planning to do another report on CTT. Thanks in advance.

DG

Nov 09 08:43 PM