|Positron's Acquisition of Manhattan Isotope is a game changer|
|By Beth McElhenny & Philip Tate|
|Friday, 16 March 2012 00:00|
Positron (OTC:POSC.OB) shares still look undervalued following news of the acquisition of Manhattan Isotopes Technologies (MIT). MIT is a game changer for the company.
First of all, most of the information contained in this report can be found at Positron’s website. This analysis was written up by shareholders who have followed the company for about two years.
MIT allows Positron entry into the radiopharmaceuticals market. Staffed by former scientists at the Los Alamos National Laboratories, MIT holds patented, exclusively licensed, technology in refurbishing Strontium-82 (the precursor isotope to Rubidium-82) from spent generators.
MIT not only gains Positron immediate entry into radiopharmaceuticals, it plays a key role for Positron with another of Positron’s projects, a cyclotron. MIT will jump-start the cyclotron’s profitability by allowing Positron to gain regulatory approvals and establish a broad customer base prior to the cyclotron’s coming online. MIT is a perfect fit for Positron.
The cyclotron that Positron has in the works is a 70MeV, the world’s largest commercial high energy/high current cyclotron. Financial arrangements for this behemoth are partially complete; the remainder is expected later this year. Positron’s
intent with the cyclotron and radiopharmaceuticals is to supply their customers and other users of PET. The primary product of the cyclotron will be Strontium-82, which is in short supply.
Positron is currently developing an Rb-82 generator with potential access to third party generators.
Positron manufactures and processes radiochemicals at its cGMP and NRC licensed manufacturing facility at Crown Point, Indiana. Upon FDA approval, Positron will enter radiopharmaceutical markets with high demand products as a precursor for its PET radiopharmaceutical initiatives.
Profit margins for radiopharmaceutical are high and range from 40% to 90%.
Note: The U.S. Department of Energy (DOE) is the only other supplier of generators in the U.S. DOE’s policy is not to compete with the private sector, and therefore can be compelled by petition to withdraw from the market when materials are reasonably
available commercially. Do you know of any other company that can ask a “competitor” go away?
Positron markets other products, which comprise its comprehensive, integrated supply chain for
Attrius PET Scanner: Sales of their scanner are set to pick up YOY due to the greatly reduced availability in 2011 of Strontium-82/Rubidium-82 generators that are used in PET. Comparing PET to SPECT, it’s competitor in a large market, the Attrius provides clearer images, emits less radiation, brings a higher reimbursement rate, and leads to superior diagnostic accuracy and better clinical outcomes. Positron expects the Attrius to replace many of the aging SPECT scanners in current use.
Positron also provides services through PosiStar, a comprehensive clinical, technical, and service customer care plan.
Another product, the PosiRx,automates the preparation and dispensing of radiopharmaceutical agents used in imaging in the currently large SPECT market.
This device is housed in hospitals and clinics, provides 24/7 unit dose accessibility giving more control to cardiologists, and it eliminates some loss of revenue by the customer: when patients miss their appointments the drugs are not dispensed, so they aren’t wasted.
Positron projects 100% growth in revenue to $15M in 2012 with comparable growth for the following years through 2015, when the cyclotron is operational. Revenue from the cyclotron is estimated to be $120M per year.
Positron’s business environment is favorable. According to Bio-Tech Systems, total PET sales are forecast to increase greater than tenfold, from $392 million to $4.31 billion, during the period 2010 to 2018.
For more detailed information on Positron’s plans and projections, see their 2012 Business Outlook at the link below.
Positron’s 2012 Business Outlook
Biotech forecasts for growth of PET: http://www.biotechsystems.com/breakingmarketnews/pet-and-spect-markets-should-reach-6-billion-by-2018.asp
PET and SPECT reimbursement: At http://www.positron.com/ Click on "2012
Myocardial Perfusion Imaging Reimbursement"
Cost Efficiency of Cardiac PET
Bracco Diagnostics Resumes Shipment of Cardiogen-82. http://www.devicespace.com/News/bracco-diagnostics-inc-resumes-cardiogen-82/250089
Amerinet Awards Positron Group Purchasing Agreement
Positron seeks to bolster cardiac PET's rubidium-82 supply
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