Verisante Readies Commercial Launch of Revolutionary Platform To Fight Skin Cancer Epidemic
* Reuters is not responsible for the content in this press release.
Thu Jul 19, 2012 8:23am EDT
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. (TSX-V: VRS) (OTCQX: VRSEF) (PINK:VRSEF) (Frankfurt: V3T) 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. (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)