Investments In Radiotherapy Can Prevent Decay In Your Portfolio

Includes: ADMD, IMMU, ISR, TGX
by: Chemistfrog

As the oncology field evolves, researchers continue to find new and improved means of treating cancer with such terms as "immunotherapy," "cancer vaccines" and "antibodies" being prevalent and offering growing hope for cancer patients. These new technologies are certainly making headway, and the fight against cancer is more hopeful because of their contributions. However, many of these new approaches are supplementary or complementary treatments given alongside or after the standard of care treatments of chemotherapy and/or radiotherapy. Despite their respective tradeoffs, chemotherapy and radiotherapy treatments still offer cancer patients the best hope of survival for many cancers. Improvements in each of these not only in efficacy but also in safety are being made daily, trying to preserve or increase the former without sacrificing the latter. Radiotherapy, or radiation treatment, of cancer tumors is an improving science/art with advances made that target tumors while reducing the systemic or even local damage occurring to healthy tissue. Often the last hope for patients with inoperable tumors, some cancers respond well to exposure to a radioactive source whether in the source of a beam or an implant. Below are novel, small capitalization companies offering investors solid upside potential that focus on this tried-and-true technology and its likely continued use in man's fight against cancer.

Advanced Medical Isotopes Corporation (OTCPK:ADMD), also known as AMIC, is a fledgling microcap of roughly $16 million with a surprising level of expertise in the field of radioisotopes. CEO and founder, James Katzaroff, leads an all-star team of experts in radiotherapy, nuclear medicine and radioisotope production. Founded in 2006, the company provides radioisotopes produced in the U.S. in clinical quantities primarily for the medical field for both diagnostic imaging and radiotherapy. According to a recent company presentation, the use of medical isotopes in diagnosis/imaging is growing at a rate of 10% annually providing a solid future for companies in the field. Since inception, the company has procured about $1.5 million in federal funding, a strong indication of the government's confidence in the company's management, business model and technologies.

Headlines from the company's website indicate the breadth of possibilities for growth for this up-and-coming microcap with projections for phenomenal growth in sales, production, a potential acquisition and even development of its own radiotherapy treatment regimen termed "radiogel." A licensing agreement announced on April 10th gives AMIC the exclusive license to produce, have made, use and market the injectable, water-based biodegradable polymer that delivers the radioactive Yttrium-90 microspheres directly to cancer tumors in the form of a viscous and immobile liquid. The treatment is safer to use with reduced radiation exposure to hospital staff and loved ones who would come in contact with the patients. It is injected as a liquid but rapidly becomes a gel that stays in place at body temperature. In this form, it bombards the targeted tumor with high doses of radiation while minimizing local, healthy tissue exposure. While it remains to be seen how the company will utilize this technology, it will likely manufacture and sell or license it to pharmaceuticals to develop in trials which could provide for sustained revenue over the life of the agreement if positive data comes from those trials. Recent financing for this high-risk investment should provide some financial stability for the company and reduce the chance for additional stock dilution for new investors at least for the short term.

Theragenics Corporation (TGX) is a medical device company focusing on surgical products and prostate cancer treatment products in the form of its brachytherapy business. Brachytherapy is the general term covering the implantation of a radiation source near or in an area requiring irradiation. By definition, AMIC's novel radiogel is a form of brachytherapy. However, Theragenics approach uses a solid "seed" or pellet as its medium of choice. The treatment may be temporary in which the pellet is left in the patient's body for a period of time before it is removed or could be more permanent and left inside where it will continue to irradiate the tissue until the level of radiation emitted declines to almost zero after a period of time (depending on the half life of the radioisotope utilized). The company's primary brachytherapy products are TheraSeed and I-Seed. TheraSeed (palladium-103 isotope) was the company's flagship brachytherapy product and has led the way treating over 150,000 men with prostate cancer since 1987 and has more recently been supplemented with the I-Seed (Iodine-125 isotope). The $66 million market cap company has been growing at a solid pace with multiple products including those in specialty needles, vascular and interventional products, and now wound-closure products through its CP Medical subsidiary.

IsoRay Medical's (ISR) primary focus is brachytherapy utilizing the Cesium-131 isotope. Cesium-131 has a higher average energy than any other isotope used in prostate cancer therapy. Couple this with the fact that cesium-131 has the shortest half-life of any other isotope used in prostate brachytherapy (9.7 days for it versus 58 days for palladium-103 and 204 days for iodine-125), and the end results is a brachytherapy seed with which healthcare providers have more control of treatment dose and duration. The company had an impressive 2011 and 2012 with the FDA clearing its GliaSite treatment for brain cancer. The treatment is a liquid radiation balloon catheter device that allows placement of Ce-131 next to brain tumors. With U.S. approval behind it, the company followed up by earning the European CE Mark, allowing immediate sale of the product in 31 European countries. Although trading at an elevated level of about $1.0 per share versus April 13th's $0.40 lows, the market capitalization of the company is still only about $30 million, making it another value-priced company.

Immunomedics, Inc. (IMMU) has two analytical products approved for marketing with one of those approvals by the FDA for its ImmuSTRIP ELISA test method for the detection of Human Anti-Murine Antibodies (HAMA). Their other approved (in Europe and Australia) analytical product is their novel LeukoScan (sulesomab) murine monoclonal IgG antibody Fab' fragment labeled with the isotope technetium-99m. It targets NCA-90 found in granulocytes (a type of white blood cells) and provides a means to use a gamma camera to perform diagnostic imaging. The approval is for determining the location and extent of infection in the bones of patients with osteomyelitis.

These two approvals provide valuable revenue for Immunomedics, but their mention in this article is for their completed phase I/IIb trial of Y-90 Clivatuzumab Tetraxetan for the treatment of late-stage pancreatic cancer. Y-90 Clivatuzumab Tetraxetan is a fractionated radioimmunotherapy (humanized monoclonal antibody labeled with yttrium-90) that targets a mucin antigen found in most pancreatic cancers. Once the cancer cells containing this antigen are targeted, they are exposed to therapeutic levels of radiation through the yttrium-90 isotope. Final results from the two-part trial in which the therapy was given in conjunction with gemcitabine were presented at ASCO 2012 with impressive data for the patient set. Exhaustive data is available through the link, but key was the overall survival for the 31 patient set that had received multiple cycles of the treatment regimen was 9.3 months which compares favorably with the standards of care of advanced pancreatic cancer. With an Orphan Drug designation for the therapy, a phase III trial initiation set to initiate in 2H 2012 will be a solid catalyst to look forward to in the company as well as the continued data acquisition of the 100 patient phase I/IIb set over time.

The aforementioned companies each made the grade of being included due to their solid upside potential and current undervalued market capitalizations. With their low market capitalizations and a volatile 2012 in the markets probably set to continue, the volatility of these companies' common stocks could also remain elevated. Over the mid to longer term, shareholders could benefit from this unique niche in the small pharmaceutical field. Each of these companies has products in or nearing clinical trials which puts them in the spotlight each time trial updates are announced. Advanced Medical Isotopes and Immunomedics each offers investors a little bit more diversity as these companies have a more diverse customer base. Advanced Medical Isotopes could be construed as a good representative member of the group due to its customer base being largely companies and institutions utilizing its radioactive isotope products in addition to radiogel's use in the future. Biotech investors may find this niche group to be a good way to diversify their portfolios but yet remain in a volatile sector with good upside possible due to catalysts ensuing in 2012.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OTCPK:ADMD over the next 72 hours.