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Advanced Medical Isotope Corporation Message Board

  • tradnfrank tradnfrank Nov 5, 2012 11:37 AM Flag

    Why ADMD is well positioned to capitalize on the growing isotope shortage.

    From the headline:

    In my search for a company that could benefit from closing reactors and one that has the means to supply the U.S. with a commonly used isotope, I found Advanced Medical Isotope Corporation (ADMD.OB). The company is small, and its success will be dependent on Canadian policy and its impact on isotope production. However, ADMD is perfectly positioned to benefit from the shortage of Mo-99, which is the most commonly used medical isotope, along with its derivative, technetium-99m. The NRU reactor, used by Nordion, produces most of the country's Mo-99 and its derivative. Therefore, once the reactor closes, it could leave a gaping hole in the U.S. supply line. The Petten reactor could pick up some of the slack; however, it's nearly 50 years old and has had its share of problems, including being temporarily closed in 2009 to fix corroded pipes. Both Covidien and Nordion are attempting to correct the issue. Covidien will try with its tiny reactors, but won't be able to meet the full demand. Nordion will attempt with its overseas supply, but with increased costs, and the inability to reach certain locations in the isotopes' short lifespan.

    ADMD is surprisingly similar to both companies, and just so happens to have fallen into the perfect situation. ADMD does not own a reactor, but has close ties to Missouri University Research Reactor (MURR). By using a reactor for production purposes, the company would have a similar business model to Nordion, which involves large returns on invested capital along with requiring very little additional capital. The company's joint venture with MURR entails a propriety compact method to produce Mo-99 and believes that it can provide half of the U.S. demand. Finally, the company also plans to expand its presence in Positron Emission Tomography (PET), a $1 billion industry growing at over 25% annually, as well as other fast-growing isotope markets that are widely used in the U.S. The company already has the technology, is producing revenue, and is well positioned to capitalize on the massive shortages that will occur, but must be addressed in the U.S.

    Sentiment: Strong Buy

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ADMD
0.020.00(+2.56%)Jul 25 3:58 PMEDT

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