IsoRay(NYSEMKT:ISR) is a small biomedical company out of Richland, Washington. They are financially healthy, with over $20 million cash on hand, low cash burn, no debt and a line of patented products, including Cesium-131, a multi cancer treatment that is currently FDA approved for treating brain cancer, prostate cancer, lung cancer, ocular cancer, head and neck cancer, and other cancers throughout the body. Their main product, Cesium-131, has an unbelievably high success rate and minimal side effects compared to other cancer treatments. IsoRay products are covered by Medicare and private insurance. So there are no limitations on receiving payment and reimbursements. IsoRay also hold a CE mark for international sales and just yesterday, they announced passing their annual audit conducted by BSI-British Standards Institution. This is for their International Organization for Standardization-ISO certification 13485. This certification covers design, development, production and sales of IsoRay products in the EU and other countries.
There was some recent misinformation about IsoRay and the incredible results from an independent lung study recently released. On May 19th, 2015, BRACHYTHERAPY An International Multidisciplinary Journal published online the results of a multi year independent lung trial. The study was conducted by Dr. Parashar and Weill Cornell Medical College. The study evaluated the outcomes for WR-wedge resection,WRB-wedge resection plus brachytherapy(Isoray's Cesium-131 was used in the WRB group), and SBRT-stereo tactic body radiation therapy in early-stage non-small cell lung cancer.
The day after these results were published and IsoRay shares price had already doubled in price, there was a very misleading, actually blatantly false, article released by a well known short attack writer and online news service. The apparent attempt to illegally manipulating IsoRay share price down may have actually caused the SEC to open an investigation into the writer/publisher of the article for illegal market manipulation of IsoRay's share price.
Let me clear up all the confusion about this study. The published results were excellent. WR+Cesium-131 had a 96.2% LC-local control, compared to 92.2% in WR and 95.5% in SBRT. The five year survival rate was superior as well. The Cesium-131 group having 100% survival compared to 97.7 in WR and 89.6% in SBRT. Although Cesium-131 treated patients had the best results, what most investors don't realize is just how much better the results actually were. In the conclusion, the study doctors state that all are excellent treatment options, but for "high risk" they "favor use of Cesium-131 brachytherapy." High risk is the key here. Cesium-131 was the only treatment used on the high risk cancers and the other treatments were used on lower risk. This is so important to the result outcomes that the study goes into detail about how and why Cesium-131 actually had much better results than the other treatments.
In the full report, it explains that the lower risk patients were less likely to experience local recurrence of the cancer by as much as 45%. Think about what this means - Cesium-131 treated cancers started out as much as 45% more likely to experience local recurrence than WR and SRBT, yet the Cesium-131 treated patient still had the lowest rate of local recurrence. If this is true, and it appears to be according to the study doctors, this makes Cesium-131 a truly remarkable treatment for high risk cancers. The full study actually goes on to say that, "Cesium-131 was likely the reason for LC equivalences, since the high risk patients normally have a higher local recurrence rate..." Thus making Cesium-131 results truly remarkable.
This was just the latest of several independent clinical trials using Cesium-131. All have all showed far better than expected results and all results have been equal to or better than any other treatments and with far less side effects. IsoRay's products effectively treated cancers that other forms of treatment have failed, even with multiple treatments. Some of the more recent trial results are below:
May 2015: The University of Kentucky released results from its study, Integrating Permanent Interstitial Brachytherapy Using Cesium-131 into the Primary Management of Gynecologic Malignancies. The results showed Cesium-131 has a low morbidity rate and very high local control of the cancer, thereby making it an effective primary treatment for gynecological cancer.
December 2014: The University of Pittsburgh School of Medicine released results from a five-year prostate-specific antigen outcomes in men undergoing prostate brachytherapy with Cesium-131 at a single institution. (Clinical Oncology December 2014 Volume 26, Issue 12, Pages 776-780). The results showed that the patients treated with Cesium-131 had a disease-specific survival of 99.5% after five years.
November 2014: The Society for Neuro-Oncology, Barrow Neurological Institute, presented its results of a five-year cancer study of patients who had various deadly brain cancers. All patients had an average of two and as many as four extensive conventional cancer treatments previous to the study that had failed, all resulting in a recurrence of the cancers in the same locations. Results from the study were astonishing, showing after the patients were treated with Cesium-131, 96% had no recurrence of cancer in the treated area. IsoRay's Cesium-131 literally stopped the cancers that all other methods had failed.
August 2014: Doctors at Weill Medical College of Cornell University in New York published another clinical paper, titled "Phase I/II study of resection and intraoperative Cesium-131 radioisotope brachytherapy in patients with newly diagnosed brain metastases." (Journal of Neurosurgery August 2014, Volume 121, Issue 2, Pages 338-348). Results of the study showed that after treatment with Cesium-131 there were no local recurrences (100% no recurrence of the cancer), no radiation necrosis and minimal toxicity.
All the trials using Cesium-131 are showing 96-100% success rate. That is simply amazing. Cesium-131 appears to be the closest thing to a cure for cancer we have seen so far. Show me any other cancer treatment with those kind of results. The results have been so good in fact, that more and more physicians and medical centers are doing other studies using Cesium-131 to treat other types cancers. The most recent study was announced May 7, 2015, it is a major study of head and neck cancer patients being treated with IsoRay's Cesium-131. It is being conducted by Thomas Jefferson University on patients where current standard of care treatments have failed.
Now the independent study results alone are incredible and definitely appear to be a superior cancer treatment for high risk cancers. This alone will cause Cesium-131 to soon become the standard care in certain cancer treatments. Another distinct advantage, often overlooked by investors, but not by the doctors providing cancer treatments, is the low initial dose rate and shorter half life compared to other permanent isotopes. Not only does the low does rate and short half life significantly reduce patient side effects, but it also reduces radiation exposure to the doctors and other medical staff providing the treatment. This makes IsoRay's Cesium-131 substantially safer and more beneficial to the patient and the doctors as well. This is likely another reason for the recent massive increased interest in Cesium-131 by doctors and medical centers. (This past April, IsoRay had more doctors/medical centers inquire about Cesium-131 than they have in the past two years combined.)
This massive increased interest in Cesium-131 is going to greatly increase IsoRay's revenue. Revenue estimates for the quarter ending June 15, 2015 are expected to grow by 36% to $1.3 million. The following quarter, September 2015, when most of the new sales will begin to be realized, the revenue estimates jump almost 189% to $3.01 million. This is expected to continue year over year with revenue expected to increase a whopping 203% to $13.86 million in 2016.
There is a reason institutional owner ship is up 17.5% quarter to quarter. Mainly because is IsoRay is a great company with an extremely undervalued share price right now of around $1.46. That is where it was before I announced the lung results were going to be released May 8, 2015. I believe once investors block out the misinformation, as the institutional investors have, and actually digest the correct information and the remarkable results of the most recent lung study results, along with the expected revenue increases beginning next quarter, share price should easily surpass the analysts $5 price target.
Disclosure: I am/we are long ISR.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The information in the article above is for educational purposes and is not an investment recommendation. Reader comments and opinions are encouraged. Readers should always perform their own due diligence before investing in any stock.