It appears investors are warming up to the idea of hyperthermia therapy for the treatment of cancer as shares of hyperthermia pioneer BSD Medical (BSM-OLD) have risen more than 30% since I wrote about the firm last November. The stock now threatens to break through all levels of technical resistance and test new all-time highs.
Because I am a shareholder and someone who recommended BSM publicly, I feel compelled to find out any information related to the stock’s recent impressive performance and pass it along to other investors.
Many of us following the stock focus on the company’s prospective launch of the BSD 2000. The company anticipates that this device will be utilized to treat cancer with heat while boosting the effectiveness of radiation and chemotherapy through a number of biological mechanisms. The clinical trials featuring this device are successful and show significant cure rates in comparison to using chemotherapy alone. Upon FDA approval, these machines will be available for approximately $350,000 to $500,000, with the company gaining a 60% profit margin on sales. Not bad for a company boasting a market cap of under $200 million.
This is good news, but may not be the key factor pushing the stock higher.
I had a chance to speak with company CEO, Mr. Hyrum Meade, last week. It was his feeling that the recent move in the stock could be attributed to the company’s plan to unveil the MicroThermX 100 microwave ablation system. Mr. Meade says that the company is approaching the FDA with the MicroThermX 100, which is used to treat cancer with heat alone. The device is smaller than the BSD 2000 and is expected to sell for considerably less. According to Mr. Meade, the corporate sales outlook fo the device is rosy with initial expected annual revenues somewhere around $100 million. Couple this with prospective sales from the BSD 2000 and it is not difficult to see why the stock is climbing.
The company is filig a 510(k) with the FDA for the approval of the MicroThermX 100. This type of application is favorable for the company because this process is not as lengthy. The company expects to hear something on the MicroThermX 100 within three months.
Meanwhile, BSM continues working with the FDA for the approval of the BSD 2000. Thus, it appears the company could launch two new products in the cancer therapy market within the next few months. This is great news for prospective patients as well as BSM shareholders.
One other positive note that may feed into the stock’s recent momentum is the company’s upcoming exhibition at the Annual American College of Radiation Oncology [ACRO] meeting in San Diego being held from Feb. 22-24.
I always tell investors to never fall in love with any given stock. I am finding it difficult to follow my own advice with this particular security. I think BSM, which closed last week at $7.47 goes much higher from here.
BSM 1-yr chart
Disclosure: Author is long BSM.