Saturday, June 18, 2011

All of the Pieces of the Puzzle Coming Together for BSD Medical

I have written about BSD Medical (NASDAQ: BDSM) on this blog a couple of times before.  I believe that they have a solid core technology platform with microwave and radiofrequency tumor ablation systems.  I believe that these forms of therapy will continue to be used as part of cancer treatment regimens.  The current ineffectiveness of chemotherapy, serious health risks of radiation, increasing acceptance by oncologists, and the increasing amount of studies demonstrating tumor ablation effeciveness and safety are all factors that will contribute to BSDM's growth.

However, the lack of marketing and results from treatments using their systems have hampered the company from growing at a rapid pace.  BSDM has addressed these concerns and I believe they are setting the stage to become a major player in the medical device area.  The company now has an established coast-tocoast distribution system in the US.  Despite news about setting a distribution system, purchasing by several hospitals and healthcare systems, and other positive news, BSDM's stock price had been steadily declining.  This presents the most opportune time for buying BSDM stock. 

Their two main competitors in the tumor ablation market are Boston Scientific (NYSE: BSX) and AngioDynamics (NASDAQ: ANGO).  Neither company has a specific focus on tumor ablation.  Their diversification will allow BSDM to gain considerable market share and become a leader in the field.  BSDM is also testing new microwave and radiofrequency systems to be the next generation of products.  This is great because lack of innovation can be the downfall of companies in all areas.

Two presentations at ASCO 2011 featured the use of BSDM's hyperthermia system.  I was impressed by the study analyzing regional hyperthermia treatment in combination with gemcitabine and cisplatin in pancreatic patient who had relapsed after gemcitabine therapy.  These patients are in dire situations and do not have any options.  16/23 had an objective response or achieved stable disease.  The overall survival was 12.9 months and the progression free survival was 5.9 months.

The company also noted a study published in the prestigious scientific journal PNAS demonstrating the power of hyperthermia therapy.  The study was reviewed in science magazine, The Scientist.  Bascially, the study showed that hyperthermia therapy as an adjunct could expand the range of cancers for which new drugs could be used.  Hyperthermia also helps to overcome tumor resistance mechanisms such as DNA repair.

BSDM's stock is up 36.8% since Tuesday June 14, closing at $3.94 on Friday.  However, the stock is in position to continue increasing.  Reports of increased sales and re-ordering of the disposable antennas show that BSDM's systems are in wide use and are increasingly added to current forms of therapy.  I expect their next quarterly results to reflect these developments.   

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