BSD 2000: The Long Case for BSD Medical Corp.

| About: BSD Medical (BSM-OLD)
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Investors may want to become familiar with Microwave and Hyperthermia therapy. It is the application of intense heat to malignant tumor cells in an effort to irreparably damage those cells and effectively treat cancer.

The reason investors may want to become familiar with this cancer therapy is BSD Medical Corp. (BSM-OLD).

BSM is a pioneer in this innovative field of cancer therapy. According to the company website, BSM is the first company to gain pre-market approval from the FDA for a hyperthermia cancer therapy system. This system is treating breast, head, neck and other superficial cancer.

The company is awaiting final FDA approval of the company’s cancer therapy system, known as the BSD 2000. This system is billed as a more advanced and effective model of the company’s older hypothermia application, the BSD 500. The BSD 2000 was utilized at several respected cancer research institutions during BSM’s clinical trials. These trial sites included Duke University Medical Center, Washington University Medical Center and the Mayo Clinic.

Results from the recent clinical trials are published on the company website and should give cancer patients and investors hope. “Clinical studies using BSD's hyperthermia systems to deliver hyperthermia in conjunction with radiation therapy have shown that 83.7% of patients had some tumor regression, 37.4% of patients had a complete tumor regression and 24.5% had a greater than 50% tumor regression.” In addition, cancer patients can applaud the fact that this therapy is noninvasive.

These great numbers coupled with the numerous credible institutions conducting the trials should assist the company in gaining final approval from the FDA. If approved, the company also has an upgrade for the BSD 2000 --- magnetic resonance imaging [MRI). The BSD 2000/3D will add three-dimensional steering of deep focused energy, and deliver even more precise heat to the tumor.

To promote the new technology, BSM has developed a patient website providing them with information on the new therapy. The company also offers a physician website that gives physicians an additional training and educational resource on the new treatment as well. This aggressive marketing should boost utilization of the therapy and generate buzz around the new system.

BSM was first profiled on Seeking Alpha nearly a year ago by Microcap Speculator . Since then, the stock has traded anywhere from $4 to $7 a share. Yesterday, it closed at $5.81 a share. However, this range could be history if the BSD 2000 is approved.

Investors can take heart in the company’s already profitable business as it currently markets a BSD 500 cancer therapy system. In its last 10-Q, BSM reported more than $17 million in revenues from its sale of TherMatrx, a treatment for men with enlarged prostates, to American Medical System. Currently, the $115 million company trades at a 13 P/E with insiders holding approximately 45% of the company stock.

BSM 1-yr chart
BSM 1-yr chart

Disclosure: Author is long BSM