Read the latest article on Seeking Alpha. Here's the portion on ADMD:
Advanced Medical Isotope Corporation (ADMD.OB) is unlike the majority of small biotech companies, which often pursue a single drug or treatment. The company is focused on two separate but related areas of business. It is already established in the manufacturing and distribution of medical isotopes with applications in imaging, therapy, and nuclear medicine as well as radio chemicals such as F-18, an isotope used in positron emission tomography (PET) imaging for cancer detection, and imaging of the heart and brain. Radiation therapy is making rapid advances as the treatment can be targeted towards tumors and cancerous tissue while minimizing the effect on surrounding healthy tissue. It is often the only option for cancer patients whose tumors cannot be surgically removed. With these diverse uses of radioisotopes, a focus on their supply is a very sound business model for the coming years.
There is a considerable market opportunity in medical isotopes because of the very real possibility of major supply shortages in the years to come. To understand the implications of this shortage, one must understand that isotopes are the basic ingredient in the use of nuclear medicine for diagnosis and treatment. Annually, medical isotopes are used in 18 million procedures in the U.S. and 30 million procedures globally with over 10,000 hospitals using the isotopes. Many of these isotopes are produced by aging nuclear fission reactors that are nearing the end of their useful lives and are not going to be replaced. These isotopes require specific kinds of reactors for their creation -- the reactors used for generating electrical power cannot reliably produce these isotopes.
The most commonly used medical isotopes are molybdenum-99 and its derivative, technetium-99m, currently used in more than 50,000 diagnostic procedures every day in the U.S. alone. The NRU reactor in Canada, which produces about half the total molybdenum-99 produced globally, is scheduled to shut down by 2015. There is no current replacement for this production in North America. Advanced Medical Isotope Corporation is in a good position to take advantage of the shortage because it has entered into an agreement with the Missouri University Research Reactor. The company should be in a position to provide 50% of the U.S. demand, and production will start over the next seven to eight years.
The second area in which the company is focusing is in the area of targeted radiation therapy for solid tumors. The treatment is called injectable radiogel therapy and is a delivery system for yttrium-90, which is an established and approved medical isotope that is used in a number of cancer treatments. The company has a licensing agreement with Battelle, a global independent research and development firm. The agreement gives Advanced Medical Isotope Corporation the license to eight key patents. Radiogel uses a water-based biodegradable polymer that delivers microspheres of yttrium-90 directly into cancer tumors. The liquid polymer, which is injected into the tumor, uses body heat to form a lattice which confines the isotope inside the tumor and reduces its affect on surrounding healthy body tissue. This would greatly benefit cancer patients who cannot be surgically treated. The company expects to have the treatment marketed by 2013 with annual sales estimated between $5 million and $15 million, and peak potential sales in the range of $75 million to $100 million.
The company has a highly respected team of specialists as well as a proven track record in manufacturing medical isotopes. Like all biotechnology investments, this is a high-risk investment because there are many factors like regulatory approvals that the company cannot control. Additional risk is also added due to the nature of the company's securities being traded on the OTCBB with its more limited liquidity and greater potential for upside and downside price manipulation. But I believe these risks are minimized by diversification into the medical isotope supply and a likely clinical candidate through its newly-acquired radiogel technology. Advanced Medical Isotope is an established isotope producer and has set its sights on exploiting the upcoming molybdenum-99 shortage with its MURR joint-venture. The technology that it has licensed for radiogel therapy is from an organization that is highly respected for the quality of its work. Success in either venture could be a huge catalyst for this $17 million market cap company.