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Guest post by Pharmboy

BSD Medical (NASDAQ:BSDM) develops, manufactures, markets and services medical systems that deliver precision-focused radio frequency (RF) or microwave energy into diseased sites of the body, heating them to specified temperatures as required by a variety of medical therapies. Their business objectives are to commercialize our products developed for the treatment of cancer and to further expand their systems to treat other diseases and medical conditions. Their product line for cancer therapy has been created to offer hospitals and clinics a complete solution for thermal treatment of cancer as provided through microwave/RF systems. Below are pictures of a few of their products.

BSD-500, BSD-2000, BSD-2000/MR/3D

BSD’s patented “phased-array” technology, the lifeblood of the MTX, generates heat that allows doctors to kill massive clusters of cancer cells. How does it work? Using focused radiofrequency or microwave energy, the tumor is heated to approximately 108°F. Heat can kill cancer cells at levels that are safe for normal cells, and can be used to attack cancer in four major ways.

  1. First, heat kills or weakens the cells of the tumor.
  2. Second, heat increases blood flow through the weakened tumor, which can allow therapies to permeate the tumor, not just attack it from the outside.
  3. Third, increased blood flow raises oxygen levels in tumors so that the cancer can be more effectively treated by radiation therapy.
  4. Fourth, when the body senses fever it stimulates the natural immune system, attacking the cancerous cells. For these reasons, hyperthermia is usually used in combination with radiation therapy.

Cancer centers around the country are purchasing BSD systems to increase their compliment of services.

“Hyperthermia is a highly specialized cancer treatment modality. When used in combination with external beam radiation therapy, we will be able to optimally treat a cancer with the goal of maximal containment of the disease. By having this treatment available to us, we can offer our patients the best therapeutic options available based on their particular needs,” said Lanceford Chong, MD, Radiation Oncologist at CTCA.

According to a report, phased-array treatment was effective at multiple stages. When treating early-stage breast cancer, it reduced the tumor size in 80% of subjects. When used to treat large breast cancer tumors, tumor size decreased by 88.4% compared with 58.8% for those receiving chemotherapy. In the November 2010 Journal of the National Cancer Institute, "a phase III study, reported in September at the European Society of Medical Oncology meeting in Berlin, included 341 patients at multiple centers in Europe and at one in the United States. It showed that patients with soft-tissue sarcomas at high risk of spreading, randomized to receive hyperthermia in addition to chemotherapy, had a median disease-free survival time of 32 months. Patients randomized to chemotherapy alone had a median disease-free survival of 18 months. The difference was statistically significant. However, overall survival showed no statistically significant difference."

The company's marketed products are covered under CPT codes as well (CPT 77600 is $500/treatment!). Recently the company priced 1,750,000 shares of its common stock in a registered direct offering at $5.97 per share. In addition, warrants to purchase 875,000 shares of common stock in the aggregate will be issued to the investors. The warrants are exercisable beginning six months and one day after closing, expire 5 years after becoming exercisable and have an exercise price of $7.73 per share. Gross proceeds of the offering, before deducting placement agent fees and other estimated offering expenses payable by BSD Medical Corporation, are expected to be approximately $10.45 million.

The medical device field is rapidly expanding and is ripe for consolidation. General Electric (NYSE:GE), Johnson & Johnson (NYSE:JNJ), Boston Scientific (NYSE:BSX), ArcelolMittal (NYSE:MT), St. Jude Medical (NYSE:STJ), and others are all looking to expand their offerings, and BSDM and its unique offering of cancer treatments would provide instant gratification to their portfolio. The buy recommendation was made in member chat, and we will ride this one into next year!

Disclosure: Long BSDM

Source: BSD Medical – Is Their Run-Up Baked In?