Positron CEO: "It will be evident that we are set to become the leaders in the Cardiac PET market" Print E-mail
By Staff and Wire Reports   
Wednesday, 28 April 2010 07:30
The following is an exclusive interview with the CEO of Positron Corporation (POSC.OB) Patrick G. Rooney. As readers of BioMedReports know, there have been many rumors and speculation, including some regarding partnerships and buy-outs that may be announced next week at the company’s now confirmed press conference in New York City at the Nasdaq MarketSite. We reached out to the company to see if we could get a feel for what sort of announcements will be unveiled there. While we were told that while there will be some significant news, contractually, the company cannot yet disclose the names or identities of some of the industry leading companies which they will be unveiling as new partners or strategic alliances. The following is a transcript of that interview:

BiomedReports: I know you can’t get into too many details about some of the news that you’ll be discussing at the upcoming press conference, but are a few things you can share with us?

Rooney: I think we want to bring to market, exactly the position that the company is in. We do have some big important strategic alliances that we will be talking about for the first time. Some of them are already in contract form and we cannot discuss them until after early May, and others involve radiopharmaceutical companies that will be getting into the radiopharmaceutical market with us, in other words, they have the drug, but they may not have the device to image this drug on.

BiomedReports: Sounds like your company is suddenly getting a lot of attention?

Rooney: The cardiac PET industry is in the beginning of a massive upswing.

BiomedReports: Why is that?

For one, it’s better medicine. All the leading medical organizations have really gotten behind the cardiac PET technology. Organizations like the Society of Nuclear Cardiology, The American College of Cardiology, The American Society of Nuclear Cardiology, basically the whole nuclear cardiology industry has really put the endorsement stamp on Cardiac PET.

(Note: Cardiac PET (or cardiac positron emission tomography) is a form of diagnostic imaging in which patients are evaluated using a PET scanner after intravenously injected with a radioisotope.

This form of diagnostic imaging has traditionally been perceived as cost-prohibitive in comparison to general nuclear medicine cardiac stress testing using single photon emission computed tomography (SPECT). However, due to significant gains in access to scanners, related to the widely accepted role of PET/CT in clinical oncology, cardiac PET is now set to become more widely available, particularly given various clinical and technical advantages that will make this a potential test of choice in the diagnosis of coronary artery/heart disease.)

The standard of care throughout history has been SPECT, but really it’s inferior to our PET technology. The financial reimbursement for these services from places like CMS; Medicare and Medicaid have just increased PET Reimbursement and decreased SPECT reimbursement.

So in the past, where cardiac imaging was, PET versus SPECT, 99% of the 18 million exams per year were done with a SPECT imaging system.

BiomedReports: Why?

Rooney: Because there was a massive distribution of SPECT cameras, the drugs were more readily available and reimbursement is comparable. Also, a SPECT camera cost much less than a PET camera.

BiomedReports: What’s changed?

Rooney: A few things, actually.

The first thing is that now all of reimbursement money from insurers and Medicare/Medicaid has increased for PET and decreased for SPECT. These insurers are now pushing physicians to a better imaging modality, a better medical practice.

BiomedReports: Why are they doing that?

Rooney: Simply because it’s better and it actually saves them money in the long run.

They’ve all said ‘We’ll pay more to get better imaging now.’

It helps everyone down the line.

This bodes well for POSC, I would imagine because our company is the only dedicated Cardiac PET manufacturer in the world. There is no one else. Siemens, Philips Medical and GE Healthcare make PET CTs – those are oncology based; primarily, oncology based. In other words, they can be for cardiac, but there’s radiation exposure, they’re too expensive and actually, they’re too large. Their machines cost more than twice what ours does. I believe that’s a fair number and encompasses a range.

The other thing that has occurred is that there is a worldwide shortage of Moly, or Molybdenum (also known widely as Mo 99), which is necessary isotope used for SPECT imaging. It’s the primary drug used in SPECT imaging procedures. So SPECT imaging has just taken another hit, if you will and we’re seeing physicians in droves move away from SPECT sooner and going to PET.

(Note: Molybdenum is mined as a principal ore, and is also recovered as a byproduct of copper and tungsten mining. On May 18, 2009, the National Research Universal (NRU) reactor in Chalk River, Ontario—operated by Atomic Energy of Canada Limited (AECL)—was taken offline for immediate repair after a heavy water leak was found at the base of the reactor vessel. The NRU reactor is one of the world’s major molybdenum 99 (Mo 99) supply sources; Mo 99 is the raw material used to produce a key isotope used in medical imaging procedures. According to AECL, the reactor normally supplies about 50 percent of the Mo 99 used globally for diagnostic nuclear medicine studies. The U.S. and Canadian medical communities are most affected by the current shortage. With only five major Mo 99 reactors around the globe, and the Chalk River facility producing roughly half of the world’s supply, the situation means Mo 99 will be in short supply.) During the past three years, different reactors have been offline unexpectedly for extended periods of time, creating vast Mo 99 shortages. [See the informative PDF document at the FDA government site authored by Covidien (NYSE: COV)]

This change from SPECT to PET is all happening sooner than most expected. The evolution was already happening, but the reimbursement and Moly shortages have really taken things up a notch.

During the last three months alone, requests for proposals (for equipment pricing and purchases) at our company from the medical industry have increased three-fold.

The recent volcano incident has made a bad situation even worse. They just had a two week shut down in Europe where no Moly was being shipped, so that’s how sensitive the situation has become. You need drugs to image the patient. There is nothing you can do without them.

BiomedReports: What about the isotope you use in your machines?

Rooney: By contrast, the PET isotope is not in short supply. Quite frankly it is very readily available. These are some of the many factors that we’ll be discussing in more detail at our upcoming press conference.

Our competitors, which are really like comparing apples to oranges, are getting hammered. I mean really hammered.

BiomedReports: How else has this affected your company and the future prospects of business?

On the PET side, we are now working on some significant strategic alliances which we will talk about. For example, one of our new markets that has very few PET systems in it is the Canadian market. We look to be selling a significant amount of systems in Canada. With a population of 38 million plus, that is a large market for us to be expanding into.

Compared to the United States, it’s a smaller market, but what’s nice is that we are the only dedicated cardiac PET manufacturer in the world, so the expansion opportunities will continue. We plan on being a leader in the market place not only here in the U.S. (where the market opportunities call for four to six thousand machines), but also outside the U.S. There will be an announcement shortly that will impact those markets opportunities for us in a substantial way.

BiomedReports: What are some of your challenges going forward?

Rooney: One of our biggest challenges is that we’re unknown to most of Wall Street. We’ve been around for 27 years, but that’s mostly been as an academic company. Now it’s a true business enterprise with a market place that is now completely pro PET and in the need of our technology. The stars have aligned.

BiomedReports: Your business also has a pharma side. What can you tell us about that?

On the pharmaceuticals side, we are now working with a number of companies on our automated dose dispensing device. We’ve talked about some of that that as part of the upcoming presentation at the press conference. We have these revolutionary dose dispensing devices which automate, yet comply with exposure regulations while still allowing us to expand and enhance the distribution of radiopharmaceuticals (radioactive pharmaceuticals used in the field of nuclear medicine as tracers in the diagnosis and treatment of many diseases).

These machines are designed for use in both oncology and radiopharmaceuticals.

BiomedReports: What will these developments do for the value or market cap of the company?

When we say that we will be leaders of this Cardiac Pet market, I think that will be evident to everyone within the next few months. Positron is clearly the pioneer in Positron Emission Tomography. We’re the first name in PET. Now our technology has received some validation with the big awards that we’ve been given and by the fact that PET is now the future of radiocardiology.

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