Verisante Readies Commercial Launch of Revolutionary Platform To Fight Skin Cancer Epidemic
(Thomson Reuters ONE) -
There is an epidemic of skin cancer and one emerging medical device firm is
poised to capture a big market position and visibility as they prepare to launch
a device which addresses this growing need.
Skin cancer is one of the world's most common cancers, and growing. According to
experts, more than 3.5 million skin cancers in over two million people are
diagnosed annually and each year there are more new cases of skin cancer than
the combined incidence of cancers of the breast, prostate, lung and colon.
Chances are, one in five of those of us reading this report will develop skin
cancer in the course of a lifetime.
A Candian based firm, Verisante Technology Inc. (VRSEF) has been getting more
tradtional media attention than just about any biotech or medical device
manufacturer we have ever focused on. For most American investors, however, the
firm has been flying well below the radar screen. It appears that is about to
change in a big way.
The firm is led by a dynamic young visionary, CEO Thomas Braun. Braun has led
the charge through development, testing and some major regulatory approvals for
the Raman spectroscopy technology device, which biochemically analyzes tissue,
as a platform for cancer diagnosis.
Currently they have two products, the Verisante Core for lung, colon and
cervical cancer detection, currently under development and testing; and the
Verisante Aura for skin cancer detection, which is approved for sale in Canada,
the EU, and Australia. The Aura is indicated for use for the evaluation of skin
lesions that may be clinically suspicious for melanoma, squamous cell carcinoma
and/or basal cell carcinoma when a medical professional chooses to obtain
additional information to rule out one of the above conditions before making a
final decision. The Aura analyses lesions in less than two seconds and detects
melanoma with 99% sensitivity vs. 33.85% for primary clinical diagnosis.
Watch the CNN report on Verisante's Aura device to get a sense of what
differentiates the new product in the market place on the firm's home page.
For Verisante 2012 is a pivotal year. The Company is at the fore of their
transition from a developmental company into a revenue generating product
company. The Company had several positive events so far this year, but the
success of the balance of the year will signal the transformation of Verisante.
As Verisante continues turning expectations into accomplishments, the value of
the Company should reflect its ongoing success.
The beginning of 2012 has been fruitful for Verisante. The following are the
achievement highlights:
In March the Company announced the Aura clinical study results paper ("Real-time
Raman spectroscopy for in vivo skin cancer", was co-authored by Drs. Harvey Lui,
Jianhao Zhao, David McLean and Haishan Zeng.) would be published by the
prestigious American Association of Cancer Research (AACR). The AACR accelerates
progress toward the prevention and cure of cancer by promoting research,
education, communication, and collaboration. It is the oldest and largest
scientific organization in the world that focuses on every aspect of high-
quality, innovative cancer research and its reputation for scientific breadth
and excellence attract the premier researchers in the field.
Verisante announced on May 8th that they completed the design and fabrication of
the beta version of Verisante Aura(TM). The units are intended for safety and
field-testing as a final step prior to the commencement of commercial production
later this year.
In March, Verisante signed an exclusive distribution agreement for Canada with
Clarion Medical Technologies Inc. Clarion has a current line of products that
directly relate to UV damage and skin care treatments, in addition to
dermatological products and devices utilizing optical technologies for a variety
of other medical applications, making Verisante Aura(TM) a natural addition to
this existing product line. "Clinical study results have shown that Verisante
Aura(TM) is a device that has the potential to revolutionize the way skin cancer
is diagnosed," said Dan Webb, CEO of Clarion. "Clarion is very excited to be the
Aura's exclusive distributor in Canada and to be able to bring this life-saving
technology to medical professionals across the country."
Verisante has also received several awards for its science and products in
2012. This illustrates that there is interest in the Company's products prior to
their completion and marketing. Verisante Aura(TM) was recently awarded Popular
Science Magazine's "Best of What's New Award" for 2011, and Verisante Core(TM)
was named one of the top 10 cancer breakthroughs of 2011 by the Canadian Cancer
Society. In addition, the Company was named a finalist for the 2011 Regional
Awards for New Technology by the Canadian Manufacturers & Exporters and the
National Research Council of Canada and named as the year's top ranking
Technology and Life Sciences Company on the TSX Venture 50.
With an exciting first have of 2012 nearly gone, Verisante is not slowing down.
The second half of the year is full of milestones that will put the Company on
the trail towards revenues and earnings. The following are some of the value
generating events that Verisante could achieve during the duration of 2012:
Now that Verisante has completed their beta units, which is the go-to-market
design for the Aura, the Company is in the process of testing the beta units to
make sure the new design performs as the trial units did. The Company expects to
complete this performance testing within the next few months.
Verisante's management has publicly stated that they expect the Aura to begin
production in the second half of 2012. Since the Company just completed the
design and fabrication of the Aura, and still needs to test them, the fourth
quarter 2012 is the most likely time to expect the beginning of production.
With production of the Aura expected in the second half of 2012, one can
anticipate the first sales of units of the Aura. Verisante has a Canadian
distribution agreement in place, so, with production, sales should not be far
behind.
New distribution agreements could also be on the horizon for the Company. The
Aura is approved for sale in Canada, the EU and Australia. The Company would be
wise to pursue distribution agreements with groups within the EU and Australia
similar to the Clarion agreement for Canada.
Implementation of the U.S. strategy for the Verisante Aura is commencing.
Verisante has been working with regulatory consultants getting ready for their
Pre-IND meeting with the FDA. This meeting is expected to take place shortly,
and will give the Company direction on what they have to do in terms of a
Clinical Trial and a pathway to PMA approval. The Company's management expects
the FDA regulatory pathway will take 2 years until PMA approval is received.
Verisante could begin selling the Aura in the US in mid-2014.
Verisante may release data for the CORE clinical study on lung cancer detection
by the end of 2012. The Company looks to achieve regulatory approval of the
Verisante Core in Canada and other markets in the near future.
Verisante currently trades around CDN$0.50/share with a $28M market cap. With
the progress the company is making on the product front (Aura) and the
developmental front (CORE), Verisante looks undervalued at this point,
especially when compared to MELA Sciences, Inc. (NASDAQ:MELA), whose technology
is less effective and far more cumbersome-- yet trades at many multiples higher.
Zack's analysts Brian Marckx has an Outperform rating on Verisante with a $2.60
price target. Verisante is currently burning CDN$300,000/month and had CDN$5.8
million in cash at the end of 2011. Verisante has plenty of cash to achieve its
goals this year. Investors interested in Verisante should consider taking an
initial position in Verisante and increase it as management performs upon the
milestones discussed above. If the Company performs, the upside to Mr. Marckx
target will be an excellent reward on the investment for investors.
Prices have been trading at current levels for some time, so there is little
downside risk here. In fact, we see the biggest challenge for the firm is the
fact that, like many other foreign firms, it trades on the OTCQX-- which is
actually the highest market tier on the over-the-counter market-- but some
American investors are averse to seeing the word "PINK" on any ticker
identification for their favorite company. The reality here is that some of the
top tier companies on the OTCQX are foreign companies including such well-known,
fully reporting, giants as BASF (PINK:BFFAF), Deutsche Telekom AG (PINK: DTEGY),
Roche (PINK:RHBBY) and Adidas (PINK:ADDDF).
The "pink" listing issue should become a non-factor once Verisante decides to up
list-- after shares start trading higher. According to our sources, this has
been the subject of serious discussion within the management team, but for now,
commercialization efforts are front and center for the time being and that's the
way it should be.
We anticipate steady positive news flow and attention for this firm going
forward as catalysts begin to play out. In addition, their clear regulatory
pathway to commercialization and profits should help shares re-price closer to
the $2+ dollar level which analysts see in the short term.
Verisante Investment Highlights
* Revolutionary, patent-protected, platform technology
* Applicable to several forms of cancer
* Clear regulatory pathway that will result in significant early revenue
* Imaging device for the safe detection of skin cancer now approved for sale
in Canada, the EU, and Australia
* Recurring revenue model
* Strategic alliances with leading institutions
* World class scientific capability
* Project management led by experienced, award-winning pioneers
* Medical and technical team led by renowned experts
* Raised $9.5 million in 2011, ensuring sufficient funding through
commercialization
* Aura(TM) named as a top technology innovation, and received a "Best of
What's New" award from Popular Science (2011)
* CoreTM technology named by the Canadian Cancer Society as one of the "Top
10 breakthroughs of 2011"
Disclosure: LONG Verisante Technologies (VRSEF)
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Source: BioMedReports via Thomson Reuters ONE
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Datum: 19.07.2012 - 14:03 Uhr
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