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Canadian Unknowns Ready For Big Gains!

|Includes: ARFXF, LED Medical Diagnostics Inc (LEDIF)

First Pick - LED Medical Diagnostics (OTCQB:LEDIF)

LED Medical Diagnostics sells the cordless and compact VELscope Vx. The VELscope Vx is the most powerful tool available for assisting in the discovery of oral abnormalities. The VELscope's distinctive blue-spectrum light causes the soft tissues of the mouth to naturally fluoresce. Healthy tissues fluoresce in distinctive patterns - patterns that are visibly disrupted by trauma or disease. Using the VELscope Vx, a wide variety of oral abnormalities can be discovered - often before they're visible to the unassisted eye. With over 13,000 units for sale, the company is about to transform the way they do business. Details on this transformation are expected in the autumn of 2013, making this a great time to build up a large position in this company.

Recent financial statements suggest that LED Medical Diagnostics is poised for a breakout. 2nd quarter 2013 results have the company nearly breaking even. Expenditures have been cut, and the new partnership with Denmat as the exclusive distributor of the Velscope Vx is gaining traction. Some analysts think that 20,000 VElscope Vx units could be on the market within a year.

Additionally, recent indications are that the company is in the process of developing an early skin cancer detection system based on the same technology that is used by the VELscope Vx. This will give the company a two pronged income stream. Clinical trials are already underway and with the FDA already having given the go-ahead for oral lesion detection, FDA approval for the detection of skin cancer will not be far off.

With a market capitalization of around $25 million, the stock is still cheap, recently trading at around $0.40. Recent trading range is between $0.20 and $0.60.

Second Pick - Amorfix Life Sciences (OTCQB:ARFXF)

Amorfix Life Sciences Ltd. (TSX:AMF) is a theranostics company developing therapeutic products and diagnostic devices targeting misfolded protein diseases including ALS, cancer, and Alzheimer's Disease. Amorfix is a pioneer in the ability to identify unique regions that are buried in normal proteins, and exposed to antibodies when proteins are aberrantly folded. These unique regions are designated Disease Specific Epitopes™ (NYSE:DSE), which can be exploited by Amorfix to develop highly specific diagnostic tools, as well as targets for therapeutics of protein misfolding diseases.

This particular segment of the biotech research field has recently been noticed by many large funds! They have bought up Prothena, the main competitor to Amorfix. Being based in the US, and being traded on a much larger exchange has taken Prothena to a market capitalization of over $300 million this year. No doubt that Prothena is very aware of the success of Amorfix: the Chief Scientific Officer of Amorfix - Dr. Neil Cashman - is on their Scientific Advisory Board.

Dr. Cashman is globally recognized as one of the pioneers in the field of prion biology and protein misfolding diseases. He is a Professor and Canada Research Chair in the Brain Research Center at the University of British Columbia. Dr. Cashman holds the position of Scientific Director at PrioNet Canada, a Network of Centres of Excellence for research into prions and prion diseases.

In addition to this, I'm predicting several development and commercialization partnerships to be completed by Amorfix in the next few months. And my best guess is Takeda Pharmaceuticals. Takeda makes sense. The company has a history of making bold acquisitions, including acquiring Nycomed in September 2011 and Millenium Pharmaceuticals in May 2008. Takeda has also shown a history of embracing new technologies, as evidenced by its acquisitions of LigoCyte in October 2012 and Envoy Therapeutics in November 2012.

Plus, Takeda has publicly signed a collaboration agreement with UBC to jointly pursue breakthroughs in ovarian and breast cancer. This agreement has been in effect since 2010. Dr. Cashman, the same Dr. Cashman who sits on the Prothena SAB, is one of the most prominent researchers in these fields at UBC. That's pretty telling in my opinion. Amorfix is not the only company researching prions, prion diseases and protein misfolding diseases, but Amorfix definitely seems to have the inside track.

Amorfix signing just one licensing agreement to a much larger company such as Prothena or Takeda will fundamentally alter the trading feel of the company. A cash payment in the tens of millions will give Amorfix the cash balance sheet they need for the big large fund companies to notice them, while at the same time, cause a rapid rise in the share price.

Don't let the low volume and low market capitalization confuse you. Amorfix shares are tightly held by Dr. Hans Black and Interinvest hedge fund. And once the licensing and collaborative agreement news starts flowing, Amorfix will be a quick ticket to never before seen new share price heights!