Through molecular imaging, therapy, and nuclear medicine, medical isotopes - a form of chemical element with the same atomic number as another element but with a different atomic mass (for the chemistry buffs out there) - are used to diagnose, manage and treat a wide variety of diseases, most notably of which may be cancer. While the precise definition of the science behind a technology is noteworthy, the average investor ideally needs to know what a technology does and how much potential it could have on the market at certain points in the future. It also helps to know the demand for a particular product or technology.
In this case, as mentioned above, medical isotopes are used in the identification and treatment of various diseases - including cancer and heart disease - and their use is already a part of a proven multi-billion dollar market, and demand may be growing due to the evolution of science and other geo-political factors. The medical profession is currently looking to use low-enriched uranium (as opposed to highly-enriched) to create these isotopes due to regulations imposed by global nuclear treaties and concerns that supporting the production of such products in foreign countries could be an incentive to increase their respective supplies of bomb-grade uranium.
Advanced Medical Isotope Corporation (ADMD), a company whose stock has recently set a new 52-week high after tripling in price on the prospects of recently-realized and some still-developing catalysts, may have positioned itself - through its key partnerships and growing distribution channels - as a leader in the US to meet the growing demand for medical isotopes. Additionally, the recent acquisition of a key license to an exclusive technology may have also positioned the company to usher in the next generation of such technology.
As described by Dr. Alan Walter, Chair of the Scientific Committee, in a presentation published on the company's home page, Advanced Medical is developing its proprietary technology to create what he terms as "smart bullets" - meaning isotopes that target only cancerous cells, while leaving healthy cells unharmed. This technology is a step beyond and preferable to the currently-standing chemotherapy and radiation treatments that help to target cancerous cells, but also damage the healthy tissue.
An April acquisition demonstrates AMIC's progress along these lines as the company, at that time, acquired a license and eight patents relating to an injectible radiogel technology that can deliver Yttrium-90 "microspheres" directly into cancerous tissue. Yttrium-90 is an already-established medical isotope with numerous applications in cancer treatment, but its application in the radiogel holds significant advantages over current treatments, especially because the radiogel allows only a minimal amount of radiation to escape, thereby causing little - if any - damage to healthy tissue. In essence, this is the comparison to the "smart bullet" described by Dr. Walter. That noted benefit could quickly enable the product to steal market share from the current standard, should it gain acceptance into the community.
The ADMD share price started move after the announcement of this deal, most likely because the company now had another angle at which to attack a lucrative market already loaded with potential. Shares have settled in a tight range since, however, and are trading at a very attractive market cap, considering the potential of the technology on hand. Also adding to the drop from the highs could have been a mid-August 8k filing announcing the granting of three million shares that became fully-vested at the time of issuance.
That said, with a solid management and scientific team at the helm and numerous technologies and business growth strategies with which to attack the market, ADMD could have the makings of a nice, speculative growth story for investors willing to take the small-cap risk that always accompanies the small-cap reward potential.
The foundations for success are well in place, the portfolio is stocked with currently-distributed products, and emerging technologies could take AMIC to the next level.
There are no sure things in this business, but this is a story that could be worth watching.
Disclosure: No position.
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