Strong Showing of Healthcare Firms on FSB 100
by Sara Calabro
Med Tech Sentinel
Fortune Small Business is out with its annual FSB 100, a list of the most successful small public companies in the U.S. Almost a quarter of the list (21 companies) is made up of healthcare-related enterprises. Here’s a look at who made the cut and what makes them worthy:
Palomar Medical Technologies (PMTI), ranked number 8, is a Burlington, MA-based firm that makes pulsed light and laser systems for aesthetic applications such as permanent hair reduction, leg veins, acne, pigmented lesion removal, wrinkle reduction, vascular treatments and tattoo removal.
Somanetics (SMTS) (13), of Troy, MI, makes the INVOS Cerebral Oximeter, a non-invasive patient monitoring system that continuously measures changes in blood oxygen levels in the brain.
United Therapeutics (UTHR) (22), based in Silver Spring, MD, makes drugs for cardiovascular, cancer and infectious diseases. It also works in telemedicine, through its Medicomp subsidiary. Its FDA-approved heart monitor, CardioPAL SAVI, is the first ambulatory device to detect the p-wave, a portion of the ECG that represents atrial activity.
LifeCell (LIFC) (37), of Branchbur, NJ, makes biological products for the repair and replacement of damaged or inadequate human tissue. Its proprietary tissue-matrix technology removes all cells from the tissue without damaging the essential biochemical and structural components necessary for normal-tissue regeneration.
Quality Systems (QSII) (41). This Irvine, CA, subsidiary of NextGen Healthcare Information Systems makes practice-management, medical-records and e-business applications for medical and dental group practices.
A.D.A.M. (ADAM) (42) is a health information company located in Atlanta, GA, that makes physician-reviewed text, medical illustrations, multimedia, interactive tools and technology. One example is A.D.A.M. DecisionAssist, an interactive tool that helps consumers make important healthcare decisions, such as whether to have a particular surgery, proceed with a test or take certain medications.
Lifecore Biomedical (LCBM) (43), based in Chaska, MN, develops dental implant systems, tissue regeneration products, and medical grade hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellar matrix of connective issues in animals and humans. Lifecore’s oral restorative products are surgically placed into the jawbone, which maintains underlying bone structure and provides fixation of restorations.
Pioneer Behavioral Health (49), based in Peabody, MA, offers inpatient and outpatient behavioral healthcare services, clinical research, and Internet- and phone-based referral services across the U.S.
Rochester Medical (ROCM) (51) is a Stewartville, MN, urology company that makes latex-free catheters and adhesives for incontinence.
MEDTOX Scientific (MTOX) (54), based in St. Paul, MN, develops drug-testing devices for use in pharmaceutical drug development, hospital care, and corrections and rehabilitation programs.
Vital Images (VTAL) (55), of Minnetonka, MN, is a medical imaging company that develops 3D software used for clinical diagnosis, disease screening and therapy planning. The software applies computer graphics and image processing to data supplied by CT, MRI and PET scanners.
Meridian Bioscience (VIVO) (58) is a Cincinnati, OH, company that develops diagnostic test kits for certain respiratory, gastrointestinal, viral and parasitic infectious diseases.
Spectranetics (SPNC) (62), of Colorado Springs, CO, makes single-use medical devices, for use in conjunction with its proprietary excimer laser system, for cardiovascular surgical procedures.
IntegraMed America (INMD) (73), of Purchase, NY, provides services to medical practices that specialize in infertility. Services include finance, administration, information systems, marketing and research. The company also sells pharmaceutical products and offers treatment-financing programs for patients.
SonoSite (SONO) (76). This Bothell, WA, company makes hand-carried ultrasound systems that are approximately the size and weight of a laptop computer. Read here about other emerging med tech companies located in the northernmost counties of Seattle.
Providence Service (82), located in Tuscon, AZ, provides counseling and support services in home- and community-based settings. The company’s social workers go into people’s homes to help with things like drug addiction and domestic violence.
Novamed (NOVA) (90) is a Chicago-based company that acquires and develops ambulatory surgery centers (ASCs) in partnership with physicians. The firm divested its practice management business in 2002 to focus exclusively on ASCs.
Streamline Health Solutions (STRM) (92) is a Cincinnati, OH-based workflow- and document-management provider specializing in streamlining business processes for healthcare professionals. The company’s goal is to bridge the productivity gap between paper-based processes and transaction-based healthcare information systems.
Psychemedics (PMD) (93) is an Acton, MA-based company whose technology analyzes hair samples to test for drug use. Comparison studies have shown Psychemedics’ tests to be 5-10 times more effective than urinalysis in identifying drug users.
American Medical Alert (AMAC) (99) provides remote health monitoring devices and 24/7 communication services for senior, disabled and chronically ill patients. An aging population has well positioned this Oceanside, NY, company. Fortune Small Business, in its July/August FSB 100 issue, highlighted the firm’s as a “small stock to bank on.”
Computer Programs & Systems (CPSI) (100), located in Mobile, AL, makes software for managing electronic medical records. Its systems tie together hospitals’ key departments and improve the availability and communication of patient information.
Now in its seventh year, the FSB 100 ranks public companies with revenues of less than $200 million and a stock price of more than $1, based on their percentage growth in earnings, revenue and stock performance over the past three years.
Med Tech Sentinel is a regular contributor to BioHealth Investor
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Beijing Double-Crane Offers New Shares
by Richard Daverman, PhD
ChinaBio Today
Restructures Relationship with Parent Company
Beijing Double-Crane Pharmaceutical Co. Ltd., which trades on the Shanghai exchange, will offer up to an additional 40 million shares of its stock to qualified investors.
A large number of those shares will go to Double-Crane’s parent, Beijing Pharmaceutical Group, which will exchange the shares for the remaining portions of Double-Crane’s five operating divisions that are still in BPG’s hands. After the transaction, Double-Crane will own 100% of the five operating divisions, and BPG will own a slightly larger number of shares of Double-Crane. Double-Crane will also receive some real-estate assets.
The exact number of shares was not released, though BPG will be restricted to a maximum of 30 million shares.
In addition to the BPG shares, Double-Crane will offer shares to outside investors. The company expects to raise 449.42 million RMB ($58.98 million), which will be used to expand Beijing Double-Crane Pharma’s transfusion production lines.
At present, Beijing Pharmaceutical Group owns a 49% stake in Beijing Double-Crane, enough to be considered the controlling shareholder. The realignment is thought to be part of the government’s restructuring of its state-owned pharmaceutical companies.
Beijing Double-Crane Pharmaceutical produces, processes and sells pharmaceutical products, mainly in three broad areas: cardiovascular medicines, endocrine secretion drugs and infusion solutions. In 2006, the company had revenues of 4.05 billion, a decline of 12% from the previous year. Earnings were also 12% lower, at 165 million RMB. Beijing Double-Crane blamed the downturn on a change in the number of consolidated entities under its control.
The shares of Beijing Double-Crane ended the day at RMB 18.07. There are 441 million shares of the company outstanding (before the restructuring), giving the company a market capitalization of 8 billion RMB ($1 billion).
RELATED READING:
- China Aims to Modernize Traditional Chinese Medicine
- China Sets Lofty Goals for its Bioindustry
- Healthcare Park to be Built in Suzhou, China
ChinaBio Today is a regular contributor to BioHealth Investor
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Friday’s Top Biotech & Medical Stocks
by H.S. Ayoub
BioHealth Investor.com
Biotechnology
GENAERA CORP [GENR] +14.74%
ADVANCED LIFE SCIENC [ADLS] +13.62%
CHELSEA THERAPEUTICS [CHTP] +13.39%
AURIGA LABORATORIES [ARGA.OB] +12.38%
REXAHN PHARMACEUTICL [RXHN.OB] +9.14%
Diagnostic Substances
ICAGEN, INC. [ICGN] +9.29%
AKORN INC [AKRX] +8.04%
IMMUCELL CP [ICCC] +6.96%
AMER BIO MEDICA [ABMC] +5.04%
PRESSURE BIOSCIENC [PBIO] +4.30%
Drug Delivery
MATRIXX INITIATVS [MTXX] +4.60%
COLUMBIA LABS INC [CBRX] +4.33%
INSITE VISION INC [ISV] +2.04%
BIOVAIL CORP [BVF] +1.80%
ACURA PHARMACEUTICAL [ACUR.OB] +1.38%
Drug Manufacturers
DUSA PHARM INC [DUSA] +8.07%
NEUROLOGIX INC [NRGX.OB] +7.34%
ELITE PHARMA INC [ELI] +7.11%
PROVECTUS PHARMA [PVCT.OB] +6.67%
AP PHARMA INC [APPA] +6.31%
Drug Related Products
IMAGENETIX INC [IAGX.OB] +19.20%
NATROL INC [NTOL] +4.67%
ZILA INC [ZILA] +3.73%
NATURAL ALTERNATIV [NAII] +2.21%
LABOPHARM INC. [DDSS] +1.77%
Generic Drugs
HELICOS BIOSCIENCES [HLCS] +7.86%
ISOLAGEN INC [ILE] +3.66%
HI-TECH PHARMACAL [HITK] +1.70%
CATALYST PHARMACEUTI [CPRX] +1.24%
Medical Appliances & Equipment
LECTEC CORP [LECT.OB] +20.00%
IRIDEX CP [IRIX] +9.36%
SPECTRASCIENCE NEW [SCIE.OB] +8.91%
ZOLL MEDICAL CP [ZOLL] +8.14%
ATS MEDICAL INC [ATSI] +8.02%
Medical Instruments & Supplies
CRYOCOR, INC. [CRYO] +17.05%
CAS MEDICAL SYS INC [CASM] +11.43%
MILESTONE SCIENTIFIC [MLSS.OB] +10.00%
EP MEDSYSTEMS INC [EPMD] +9.64%
HEMOSENSE INC. [HEM] +7.43%
Medical Laboratories & Research
AETERNA ZENTARIS [AEZS] +2.67%
RADNET INC [RDNT] +1.71%
OSI PHARMACEUTIC [OSIP] +0.36%
PSYCHEMEDICS NEW [PMD] +0.30%
- Thursday’s Top Biotech & Medical Stocks
- Wednesday’s Top Biotech & Medical Stocks
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CryoCor: Another Small Med Company Rallies Like Mad
by Douglas A McIntyre
24/7 Wall St.
CryoCor (CRYO) had revenue of $540,000 last year, and a loss of over $15 million. It did not do much better in 2004 or 2005. But, as of this morning, the company sports a market cap of $81 million.
Nice work, if you can find it.
CryoCor’s shares are up on a deal with Boston Scientific (BSX). The two companies “are collaborating on the development of cryoablation, or extreme cold, to treat irregular heartbeat, or, cardiac arrhythmias,” according to The Associated Press.
Continue article at 247WallSt.com
RELATED READING:
- Against Odds, CryoCor Gets Advisory Panel Nod
- FDA Gives CryoCor the Cold Shoulder
24/7 Wall St. is a regular contributor to BioHealth Investor
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Valuing Biotechs
by Brett Scott
Sizz’s Biotech Blog
Valuing stocks can be a bit of an art and determining a value for biotech companies is even tougher, especially for biotechs without any products at market. So today I’ll outline one of the methods I like to use when valuing companies. This method is called Risk-adjusted net present value, and it is fairly specific to the biotech industry.
Risk-adjusted net present value (rNPV) attempts to value a company by taking into account not only the future cash flows, but also the probabilities that those cash flows will even take place. This is especially useful for small biotechs that have not yet obtained FDA approval for a product. In using rNPV, we are able to find a company’s value while taking into account significant events that could affect the stock price (like moving from Phase II to Phase III trials).
NPV is the same as a discounted cash flow analysis. It finds the present value of a firm’s future cash flows. rNPV is similar. It is the present value of future cash flows, but those cash flows are adjusted by the probability of effect.
So, what are these cash flows? And, what are these probabilities?
These assumptions are crucial to our analysis of a small biotech.
1. Probabilities
Based on historical numbers, drugs in clinical trials have been approved by the FDA at the following rates:
Phase I: 20%
Phase II: 30%
Phase III: 67%
New Drug Application: 85%
(*These rates can differ +/- 5% based on differing types of drugs)
These percentages are the probabilities that we can use in finding rNPV. However, these percentages are the probabilities of a drug in each stage obtaining FDA approval. The percentage of drugs moving from one stage to another is the following:
Phase I to Phase II: 67%
Phase II to Phase III: 45%
Phase III to NDA: 79%
NDA to FDA Approval: 85%
These percentages are the probabilities that we use when a drug moves to a different stage.
2. Cash Flows
Determining a drug’s cash flows can be very difficult. First, we must determine the costs. Secondly, we want to determine the potential revenues.
–Costs:
Costs tend to be determinate on the stage that a drug is in.
Phase I (1 year): $500,000 for animal testing + $12,000 per human subject (20-80 subjects)
Phase II (1.5 yrs): $1 mil for animals + $12,000 per human (100-300)
Phase III (3 yrs): $1.5 mil for animals + $6,000 per humna (1000-3000)
New Drug Application (1 yr): $1.8 million
–Revenues:
A peak sales estimate (which can usually be obtained about 3 years after FDA approval) can be determined by taking the market size and multiplying it by an estimated market share. Also, drugs tend to have a life of around 10 years. Revenues are usually assumed to ramp up, and ramp down with about 5-7 years of peak sales.
Alright, let’s make sense of this information.
As an example, let’s take Fictional Biotech, Inc. FBI has a drug in Phase II trials. This drug treats pancreatic cancer, which has a market of $2.6 billion. FBI’s drug has an estimated market share of 8%, which leads to potential peak sales of approximately $200 million.
Now, let’s take a look at some cash flows. For example purpose, we’ll look at years 1, 3, and 10
Year 1: Costs: -$1.7 mil for phase II testing
Year 3: Costs: -$6.5 mil for phase III testing
Year 10: Costs: 60% of Revenue, Revenues: $200 mil
So, according to the rNPV method, these cash flows must be adjusted by the probability that they will occur.
Year 1: rNPV Cash Flow = (Costs x Probability) = (-$1,700,000 x 100%) This stock is already in phase II, so the probability is 100%
Year 3: rNPV CF = (Costs x Probability that drug will move to phase III testing) =
(-$6,500,000 x 45%)
Year 7: rNPV CF = (Revenues x Cost of Revenue x Probability that drug will obtain approval)
($200,000,000 x 40% x 30%)
To conclude this quick intro to rNPV, to get a value for the company, we find the net present value of all the cash flows that each drug in the pipeline could bring in. We discount at the company’s weighted-average cost of capital, which is usually 20% or more for a small biotech firm.
RELATED READING:
- Short Squeezing Biotechs
- Strategy for Investing in Small Biotechs
- The Biotech Industry: 30 Years of Failure
- Weak U.S. Dollar Good for Biotechs!
- A Closer Look at Five Biotech ETFs
Sizz’s Biotech Blog is a regular contributor to BioHealth Investor
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Against Odds, CryoCor Gets Advisory Panel Nod
by Sara Calabro
Med Tech Sentinel
Two days after CryoCor (CRYO) got word that FDA was not satisfied with safety and efficacy data for the company’s Cryoablation System, the agency’s advisory panel recommended the device for approval. FDA is not required to follow the advice of its advisors, but it typically does. A final decision by FDA is expected in August.
San Diego-based CryoCor is seeking an approval for atrial flutter, a condition where the upper chambers of the heart beat too fast. Unlike other devices on the market that use heat to treat atrial flutter, the Cryoablation System uses extreme cold to destroy damaged cardiac tissue.
This is CryoCor’s second go-around with trying to gain approval for the Cryoablation System. FDA rejected the company’s application last year, prompting CryoCor to amend and resubmit in November 2006.
RELATED READING:
- FDA Gives CryoCor the Cold Shoulder
Med Tech Sentinel is a regular contributor to BioHealth Investor
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China Aims to Modernize Traditional Chinese Medicine
by Richard Daverman, PhD
ChinaBio Today
TCM to Complement Western Medications
Chinese officials announced a new 20-year initiative to modernize traditional Chinese medicine. The goal of the plan is to position the system of centuries-old herbal drugs as a complement to Western medications, rather than to make it into an either-or alternative.
Under the initiative, the aim will be to improve standards, find new applications and standardize planting, production and processing of medicinal herbs. The plan was outlined in a report issued by the China National Center for Biotechnology Development, which is part of the Ministry of Science and Technology.
China wants to build TCM into an industry with revenues of RMB 400 billion ($52.6 billion) each year, though press reports did not specify when that level would be reached.
Presently, 85% of China’s rural population has access to TCM, according to the report. About 3,000 hospitals in China provide TCM treatment, and it is administered in 234 million hospital visits annually.
RELATED READING:
- China Sets Lofty Goals for its Bioindustry
- Healthcare Park to be Built in Suzhou, China
- China Biotech Weekly Review: TCM Goes Mainstream
ChinaBio Today is a regular contributor to BioHealth Investor
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Thursday’s Top Biotech & Medical Stocks
by H.S. Ayoub
BioHealth Investor.com
Biotechnology
INTL STEM CELL CORP [ISCO.OB] +22.45%
PROTALIX BIOTHERAPEU [PLX] +10.87%
SENESCO TECH [SNT] +8.11%
MEDICURE INC [MCU] +6.92%
SUNESIS PHARMACEUTIC [SNSS] +6.77%
Diagnostic Substances
SURMODICS INC [SRDX] +10.57%
GENE LOGIC INC [GLGC] +6.40%
EPIX PHARMACEUTICALS [EPIX] +6.35%
AMER BIO MEDICA [ABMC] +4.39%
ORCHID CELLMARK INC [ORCH] +3.42%
Drug Delivery
NOVADEL PHARMA INC [NVD] +5.45%
COLUMBIA LABS INC [CBRX] +3.12%
DELCATH SYSTEMS INC [DCTH] +1.60%
QUIGLEY CORP THE [QGLY] +1.47%
MATRIXX INITIATVS [MTXX] +1.37%
Drug Manufacturers
NEXMED INC [NEXM] +7.10%
PROTALEX INC [PRTX.OB] +5.47%
ELITE PHARMA INC [ELI] +5.29%
POZEN INC [POZN] +5.01%
PRANA BIO LTD ADS S1 [PRAN] +4.61%
Drug Related Products
QUEST GROUP INTL [QSTG.OB] +23.76%
ZILA INC [ZILA] +11.67%
IMAGENETIX INC [IAGX.OB] +11.61%
PACIFICHEALTH LABS [PHLI.OB] +10.43%
USANA HEALTH SCIEN [USNA] +3.94%
Generic Drugs
CATALYST PHARMACEUTI [CPRX] +2.99%
ISOLAGEN INC [ILE] +2.50%
WATSON PHARMACEUTCLS [WPI] +1.64%
HELICOS BIOSCIENCES [HLCS] +1.57%
CARACO PHARMA LABS [CPD] +0.06%
Medical Appliances & Equipment
ALPHA INNOTECH [APNO.OB] +108.33%
LECTEC CORP [LECT.OB] +11.11%
NON INVASIVE MONITORNG SYS NEW [NIMU.OB] +10.09%
EDAP TMS SA ADR [EDAP] +9.55%
GIVEN IMAGING LTD [GIVN] +8.84%
Medical Instruments & Supplies
CRYOCOR, INC. [CRYO] +89.37%
IMPLANT SCIENCES CP [IMX] +15.94%
QUANTRX BIOMEDICAL [QTXB.OB] +14.29%
YOUNG INNOVATIONS [YDNT] +10.92%
NUCRYST PHARMACEUTIC [NCST] +5.50%
Medical Laboratories & Research
ALLIANCE IMAGING INC [AIQ] +4.17%
ERESEARCHTECHNOLOG [ERES] +3.47%
MEDTOX SCIENTFIC INC [MTOX] +3.39%
PSYCHEMEDICS NEW [PMD] +1.60%
BIO-REFERENCE LAB [BRLI] +0.95%
- Wednesday’s Top Biotech & Medical Stocks
- Tuesday’s Top Biotech & Medical Stocks
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Criminal Investigation Ends Miami Biotech Park Development
by Hisham S. Ayoub, DMD
BioHealth Investor.com
The proposed development of a large biotech park was put to end by Miami-Dade County after a formal investigation was initiated following accusations that the Boston developer Dennis Stackhouse has mismanaged funds, and gave kickbacks to various officials and their families.
The planned Miami biotech park was intended to counter the large biotech project just north of West Palm Beach already in development, which has attracted numerous large clinical organizations, including the Scripps Institute.
This is a huge embarassement, if nothing else, to the image of Miami, and a disappointment to the University of Miami, since UM was excited to leverage its world class medical research to attract a surge in venture funding and licensing agreements.
I guess this completely downplays my earlier article on the biotech boom in Florida.
RELATED READING:
- Miami-Dade Ends Development of Plans for Troubled Biotech Project
- Florida: the Next Biotech Hub?
BioHealth Investor.com
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China Sets Lofty Goals for its Bioindustry
by Richard Daverman, PhD
ChinaBio Today
Investing Rules Must Improve Along with Science
China wants to be number one in the world in bioindustry output by 2015, with total output at a level of two to three trillion yuan ($250 billion to $380 billion) by 2020.
These goals were articulated by Wan Gang, Minister of Science and Technology, in remarks delivered at the Opening Ceremony of the 2007 International Conference on Bioeconomy, being held this week in Tianjin.
Wan expects Chinese bioindustry output to reach 500 to 800 billion yuan ($64 billion to $102 billion) by 2010, which will grow to 1.6 trillion yuan ($205 billion) in 2015. In these numbers he is totaling output from several sectors, including agriculture-oriented biotechnology, medical biotechnology, biofuel technology, environmental biotech and marine biotech.
In terms of important technologies, Wan listed 35 breakthroughs in key biotechnologies, mentioning especially stem cells and genetic modification technology.
But Wan said that more than science was needed. China must also improve the financing of bioindustry and it must encourage investment in the sector. In that same vein, State Councillor Chen Zhili called for improved fiscal, taxation, financing and intellectual property right protection policies as a way to bring bioindustry output to its full potential.
In his remarks, Wan outlined a three-step process in bioindustry development: until 2010, China will seek to accumulate technology; from then until 2015, China will become a world power; from 2015 until 2020, China will seek to maintain its pre-eminence.
RELATED READING:
- Healthcare Park to be Built in Suzhou, China
- China Biotech Weekly Review: TCM Goes Mainstream
- China Biopharma Strikes Deal for Antiviral
ChinaBio Today is a regular contributor to BioHealth Investor
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