Armed with Impressive Partnerships, Can This Emerging Innovator Become 2012's Most Successful Medical Device IPO?
(Thomson Reuters ONE) -
Image-guided surgery has revolutionized the accuracy and cost of performing
surgery - creating minimally-invasive procedures that allow patients quicker
recovery and save clinics, physicians, patients, and health insurers time and
money.
Fluoroscopy, for example, created a non-invasive alternative to open-heart
surgery, with an estimated 1.5MM procedures performed annually. Similarly, the
use of optics introduced endoscopy, with 1.2MM procedures performed each year.
Yet minimally-invasive neurosurgery - or procedures in the brain - continue to
be performed using archaic methods dating back more than 6 decades. These
surgeries often require patients to be awake for their own brain surgery to
describe 'what they are feeling' as the surgeon inserts surgical instruments
into their brain. And because of the highly-complex nature of this surgery, only
300 specialized neurosurgeons in the United States can, potentially, perform a
procedure that takes up to 8 hours under this dated protocol.
According to MRI Interventions (OTCBB:MRIC) (OTC:MRIC), ClearPoint is the only
FDA-cleared imaging system that allows neurosurgeons to see into a patient's
brain in real-time, and accurately pin-point their target. This technology
allows for all neurosurgeons (not just a highly-specialized subset) to perform
minimally-invasive neuro procedures. It's also estimated that procedure time is
cut in half versus surgery using current methods (referring to the dated
standard of care, discussed earlier). This means 3500 neurosurgeons can perform
a minimally-invasive brain surgery in less time, with the patient under a
general anesthesia (remember, under the standard of care the patient has to be
awake in order to respond to 'sensations' as surgery is performed!).
ClearPoint is the first of its kind to provide an easy-to-use, real-time
visualization tool to surgeons performing brain surgeries. The system, a suite
consisting of a computer and monitor, intuitive software, and disposable
components, is designed to fit into hospitals' existing MRI suites. This makes
the transition to the next-generation technology for neurosurgery quick,
convenient, and relatively inexpensive. In fact, ClearPoint procedures are
covered under existing reimbursements codes. More importantly, ClearPoint
procedures cost a hospital far less than a traditional procedure because it
improves accuracy, delivery, and therefore shortens the length of a surgery
(neurosurgeons' time is very expensive, let alone a 'specialized' neurosurgeon).
This means that in the same time required to perform 10 neurosurgeries,
ClearPoint can be used for 20 procedures, which ultimately generates greater
revenue for hospitals, and lowers overhead (neurosurgeon's time, cost of
operating room, etc.). In other words, ClearPoint offers attractive economics to
hospital systems, all the while providing a safe and accurate guide during
surgery and superior patient benefit (think how many patients would prefer being
under anesthesia versus being awake during their surgery). In general,
ClearPoint provides a superior technology benefiting all of its stakeholders
(hospitals, physicians, surgeons, patients, insurers, etc.).
MRI Interventions made its public debut about one month ago, and now trades
under the stock symbol 'MRIC.OB'. It's unclear exactly how much of the
minimally-invasive neurosurgery space the company's ClearPoint system will
engulf; however, leading neurosurgeons and opinion leaders across the world have
spoken highly of their experiences with this MRI-guided technology during
procedures.
So what is all of this worth? Or rather, what is this worth to the retail
investor?
This is a great question and one probably equally as important as the technology
behind MRI Interventions (which, by the way, is not limited to the ClearPoint
system). If investors, today, conservatively value the company at $40MM, based
on the ClearPoint system being installed in relatively few, albeit leading,
centers in the United States and Europe, we can conservatively say that every
20 new centers that adopt ClearPoint add another $40MM to the current valuation.
The opportunity, using adoption of this product as a parameter, is 4500 MRI
scanners in the U.S., and likely an equivalent (or greater) number ex-US. This
means that at 10% penetration (in the U.S. alone), 450 centers will sport
ClearPoint, suggesting a valuation at $900MM, or roughly 22X MRIC's current
price.
The beauty of MRIC's business model is that for every neurosurgery performed,
the hospital pays for a disposable component as part of the ClearPoint system.
This component costs $7300, leaving hospitals - that are generally reimbursed
$25,000 per procedure - a strong profit margin. However, as an investor in MRIC,
sales of disposable components create recurring revenues which then become cash
flows. These cash-flows then allow for a company that has invested over $60MM
developing and protecting their technologies to become self-sustaining and
provide a tremendous return-on-investment to its investors. Speaking of
protecting its technologies - as of their last report - MRI Interventions has
over 60 issued patents and more than 110 patents pending. This explains why
medical device giants like Siemens (NYSE:SI) and Brain Lab chose to partner with
MRI Interventions rather than compete with them. It's also worth mentioning that
Boston Scientific (NYSE:BSX) has entered into a collaboration with the company,
and is looking to license their technology for use in their own devices. This,
in itself, could prove our return-on-investment estimates to be very
conservative indeed.
A full report on MRIC complete with graphics, video links and more is available
at:
http://www.biomedreports.com/2012062798433/ground-floor-opportunity-next-gen-
med-device-maker-seeks-to-become-successful-ipo.html
Healthcare investors and Biotech traders interested in accessing BioMedReports'
new complete database of clinical trials and upcoming FDA and world-wide
regulatory decisions which can be used to make more profitable trades and see
upcoming catalysts can go to:
http://biomedreports.com/fdacal.html
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via twitter at: http://twitter.com/BioMedReports
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Datum: 27.06.2012 - 12:54 Uhr
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