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Competitive Technologies (OTCQX:CTTC) has had a difficult twelve months, including a change in management. However, the turnaround appears to be at hand. The company's proprietary technology for the treatment of chronic pain, known as Calmare(R) or MC‐5A , has been developing some long-awaited sales momentum with entrepreneurial physicians-- physicians who have evaluated the technology in their own offices, with their own patients. Distributors for the Calmare have reported that it is the successful results with their patients who suffer from chronic pain that has been the deciding factor in the sales cycle. Many patients have said they went to "pain free" after the first treatment, although usually ten treatment sessions are advised to assure longer pain-free periods.

Since October of last year, sales agreements for over 150 Calmare units have been signed for purchase domestically over the next two years. And some physicians have been so impressed that they have embarked upon building pain management clinic networks wrapped around the use of CTTC's medical device.

Briefly, CTTC's chronic pain management technology is a non-invasive method for rapid treatment of high-intensity oncologic, neuropathic, and drug-resistant pain through a biophysical rather than a biochemical manner. Calmare is indicated for pain managment by using external electric stimulation to manipulate the signals flowing to the central nervous system (CNS). Compared to conventional electro-analgesia, Calmare substitutes the pain information with synthethic "non-pain", instead of blocking pain transmission as TENS or implanted devices utilizing the "Gate Control" theory. The Calmare unit incorporates electromedical equipment for electronic nerve stimulation and uses the nerve fiber as a passive means to transmit a message of normality to the CNS known as the "Scrambler" theory. This then enables the CNS to modify the reflex adaptive responses - referred to as TEMPR - Transcutaneous Electrical Modulation Pain Reprocessor. It has been successfully used on over 3,000 patients in Europe.The patient experiences longer "no pain" periods after each successive treatment--usually a series of ten 45 minute sessions over two weeks.
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At a shareholder meeting on May 2, the company indicated that its first quarter, 2011 revenues (TBA this Monday, May 16) would be $1.86 Million from the sale of the sale of 72 Calmare units--both domestic and international sales. (CTTC realizes much higher revenues from domestic sales versus international sales due to the current distributorship agreements overseas.) Significantly, CTTC management assured shareholders that the company would report a profitable first quarter and expects to be profitable for the rest of 2011.

Why the confidence in the future sales of the company's flagship technology?

First, the company has applied for insurance reimbursement for Calmare treatment sessions and expects to hear the decision in the near future for the CPT (Current Procedure Terminology) code (Category III) for Scrambler Therapy, for the treatment of cancer-related pain. To date, CTTC has been selling Calmare to clinics that also offer "fee for service" instead of the much preferred "insurance reimbursable" model, so any change on the insurance front would be incredibly positive for future sales. But it is to be noted that the company has turned profitable on sales without reliance on insurance coverage.

Second, media coverage including patient testimonials have been more frequent recently. The Fox affiliate in Providence, Rhode Island aired this news report on April 28.

Third, Calmare technology is the subject of clinical studies at three respected institutions with clinical results expected to be published::

Massey Cancer Center

  • Electrical Stimulation Pain Therapy in Treating Chronic Pain and Numbness Caused By Chemotherapy in Patients With Cancer (additional studies planned)

University of Wisconsin

  • MC‐5A for Chemotherapy Induced Peripheral Neuropathy

Mayo Clinic

  • MC‐5A Scrambler Therapy™ in Reducing Peripheral Neuropathy Caused by Chemotherapy (additional studies planned for this year with expansion into non‐cancer segments)


*It is to be noted that Calmare is already 510-K approved by the FDA for marketing in the U.S., therefore these studies are not required for CTTC to realize revenues from sales in the United States. The technology has a CE Mark for sales in the European Union.

The global pain management market is estimated to reach $60 billion by 2015. In the U.S. alone, chronic pain affects an estimated 86 million adults. A recent ABC News report cited that 80% of all pain medications in the world are taken by Americans and the incidence rate of painkiller addiction has risen dramatically over the past ten years. An interesting statistic was that in 17 states, more fatalities resulted from pain med overdoses than from car accidents. It would be an understatement to say that a non-invasive, non-narcotic pain therapy such as Calmare has a huge market to be tapped.

Of course, as with any equity analysis, the technology or business plan is just part of the investment consideration. The other consideration is the capital structure. Here is where Competitive Technologies should give pause to those investors interested in emerging medical technologies. CTTC has only 13.8 million shares outstanding and a public float of 13.4 million shares. So, at the current price of $1.78, the total market cap is about $24.5 million. Should Calmare technology continue its recent sales success --success that should really ramp up should insurance reimbursement be obtained and/or ongoing clinical studies validate patients' actual experiences in the clinics currently using Calmare --this market cap will look ridiculously cheap.

Disclosure: I am long CTTC

Source: Why Competititve Technologies Could Be Ridiculously Undervalued