Positron Chariman confirms talks; Partnership or Buy-Out News May Follow Print
By M.E.Garza   
Thursday, 22 April 2010 03:00

Positron Corporation (OTC BB: POSC.OB) has been around for 27 years, but now it finally looks ready to move to the next level. It speaks volumes that recently, the company became the recipient of the “2010 Frost & Sullivan North American Molecular Imaging Systems New Product Innovation Award.”

Frost & Sullivan is a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The New Product Innovation Award is a prestigious recognition and validation of Positron Corporation’s accomplishments (see the chart below to see previous winners of the Frost & Sullivan award), but they may not be the only group ready to acknowledge the company and their technologies.

Rumors of a lucrative buy-out or partnership have been swirling around the company during the past two weeks. Multiple sources told BioMedReports, that details about "a big announcement involving Positron and a much larger, publicly traded NYSE company worth at least $25 billion" could come as early as next Monday.

We reached out to Positron's Chariman of the Board, Patrick G. Rooney and the head of the small molecular imaging company focused on Nuclear Cardiology has confirmed that his company "is currently in discussions with a potential partner in our industry."

Rooney refused to offer any assurances or details about when an agreement might be reached.

As we told subscribers yesterday, the stock price may see substantial gains now that the company had positioned itself to be the leader in the five billion dollar molecular imaging market. Positron's PET (Positron Emission Tomography) scanner, known as the “Attrius”, has robust cardiac specific imaging software and, more importantly, is the only "PET" imaging device in the entire industry (see related video).

Triggered by our alert, shares rose over 43% yesterday, but further confirmation about interest in the micro-cap company could easily send shares into the multiple dollar range.

In a letter to shareholders last month, Rooney informed investors that "Positron has several immediate opportunities with some of the largest companies in the nuclear medicine industry. Any combination of success with these opportunities will have a tremendous positive present and future impact on Positron."

Rooney appears confident that his company will thrive financially given that "the cardiac business is five times greater than the oncology business."

"Everyone has a heart problem not everyone has cancer," said Rooney. "Once you have a heart issue they'll put you on some kind of imaging device to test your heart. It's just where medicine is going.  Everyone over 45 or so is starting to get imaged at the first sign of any heart issues."

Last year, Positron achieved a major milestone, as its joint venture with Neusoft Medical Systems of China received FDA 510k approval on the “Attrius” PET scanner. The event signaled the beginning of Positron’s ability to market and sell its state of the art cardiac PET scanner, the Attrius, in the United States.

In addition, the company's Nuclear Pharm-Assist® technology is set to reshape the radiopharmaceutical distribution in the nuclear cardiac imaging space. Analysts believe Positron will generate extraordinary revenues selling radiopharmaceutical consumables to the large customer base that exists today for SPECT radiopharmaceuticals (7,000+ opportunities) and will leverage the same base as the SPECT industry migrates to PET as the #1 cardiac imaging modality in the world.

"The device is like a large refrigerator that is an automated virtual pharmacy," explains Rooney. "The way the world works now, is that if you are looking for an image of your heart, your doctor calls the radio pharmacy and they order a dose syringe cocktail. It arrives and you get an injection with it.  Currently, companies like Cardinal Health and GE Healthcare control this market and radio pharmacies deliver the radio pharmaceuticals. What our device does is that it compounds what you need on site, so literally we can install these devices at your cardiologist's office and when you walk in, they don’t say 'Hey, come back tomorrow so we can order you a does of radioactivity. With us, you hit some buttons and it comes out of this vending machine, if you will.

"So now literally, instead of opening up brick and mortar for $3 million and selling pharmaceuticals, we can install this inexpensive automated device that is compliant with all United States regulations on exposure issues and you can literally walk in; they hit some buttons and boom! A cocktail comes out in a syringe. They inject you and you get imaged on the spot. It works in emergency rooms- obviously that would work well- but it also works in cardiology offices where it's about patient management, It provides inventory control, it lower exposure issues and, quite frankly, it lowers cost across the board because there is less drive time, less gas consumption, etc.

"We're ready to bring in the imaging, and now we can also bring in the dose dispensing.  We're going to have the full solution so that we can say 'hey doctor, we'll install the PET camera as either a rental or a sell and as far as dispensing pharmaceuticals, here's your vending machine. And just like someone who puts in a vending or soft-drink machine, we sell the products and make our profits there. This device is just basically handed out. It's the same methodology and what happens is that now, we bring everything together. We can sell drugs and cameras to the cardiologist and all of it at a better price, with more efficiency and more effectiveness. That's how we deal with our market."

"What's happening here is that the future of nuclear cardiology is PET," explains Rooney. "It's been said by the Society of Nuclear Medicine and many other organizations. The future is PET for a lot of things, better medicine, more efficiency and there were some reimbursement changes on October 30, 2009. PET reimbursement was increased by 25% and SPECT Scans (Single Photon Emission Computed Tomography) was decreased by 36%.  So what happens is that this deal is worth about $100 for a PET scan and a SPECT scan is now worth about $11 or $12 dollars. So now, doctors are doing 12-15 a day to make or take 20,000 dollars or more a day, 250 days a year. That's a lot of money.

"We applied for FDA approval last January 2009 and we were approved around the beginning of May of the same year and now we have literally seen this massive rush of orders from former SPECT users. Oncology groups that want to go into PET literally come to us and say 'listen you are the only PET manufacturers in the world we want to buy PET. We don't want to buy PET CT like GE , Phillips and Siemens, because it would cost three times as much and there's the exposure issue and we just don't need this monster machine to image the heart. One of the things also, is that source radio activity for SPECT is in just massively short supply. The one used for PET is not an issue. So now doctors are saying: 'The slap in the face was the reimbursement issue. Now it's like a real kick in the pants because we can't even image because we can't get the drugs to image our patients. Thus, PET is coming on even faster and faster."

Is it any wonder the bigger players want in on the game that Positron controls so tightly? What is that worth to them? What will it be worth to investors?

We will keep you posted as this story continues to develop.

Disclosure: Long POSC

"Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'.

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