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Safety Syringes & Color MRIs: Two Products Paving the Way for Advances in Medicine
By: AllPennyStocks.com News
October 28, 2009
The horizons of medical research are broadening by the day, with particular emphasis on the diagnosis and treatment of patients. Gone are the days when spotting a foreign body in one’s system entailed physically opening up that patient to see what was wrong. The devices made available by this generation of researchers – such as CT Scanners and magnetic resonance imaging (MRI) devices – make the new frontier of medicine that much closer.
But how to make MRI devices more sophisticated, to enable them to make more specific the flaws in our bodies needing to be fixed, earlier in the process, before the diseases in question turn so nasty as to be irreversible. A company out of Charleston, South Carolina, only four years old, is revved up about pointing out those nuances in MRI technology, making them more effective in treating illness, and oh, yes, providing small cap shareholders with a “healthy” return.
Aptly-named Revolutions Medical Corporation (OTCBB:RMCP) is a firm committed to continually developing and distributing new products and tools to the medical industry, whether internally or through acquisitions. RCMP’s goals are to make health care safer and less expensive by reducing risks and cutting time and expenses.
More to the company’s MRI “revolution” further down the page; but first, a word or two about what investors may already know about its product line. RMCP is the creator of the Rev-Vac safety syringe, which it calls a streamlined solution with both price and performance competitive advantages over existing products. Mass manufacturing of the syringe is slated to begin before the end of the calendar year, and medical industry analysis agrees, not a moment too soon.
More than one million health-care workers are unintentionally stuck by needles in the United States every year, and for some of these workers, the consequences can be catastrophic; 1,000 of these mishaps involve major infections, which could result in $1 million worth of treatment each. The company suggests that about 80% of these incidents, and the suffering they bring, could be prevented with the use of safety syringes (indeed, President Clinton signed into law the use of safety syringes in 2000, shortly before he left office). For investors, the potential is huge, too; safety units shipped increased from 900 million to 5.3 billion from 1999 to 2006, with anticipated future annual growth of 10% to 20%, resulting in a possible market topping $1.6 billion by next year.
Among the competitors for the safety syringe dollar is Massachusetts-based Covidien Inc. (NYSE:COV), under whose banner the Kendall brand of safety syringe competes. The Kendall brand manufactures and distributes medical products used in a variety of clinical settings throughout the world, including hospitals, rehabilitation centers, long-term care facilities and patients' homes. Kendall products range from wound care, vascular therapy, urological care, incontinence care and nursing care to needles and syringes.
But the Kendall brand, particularly its Monoject, has its drawbacks, according to industry folks in the know. Its operation requires two hands, one near needle; the safety mechanism is not always reliable, and must retract from injection site, exposing the needle. COV, the parent company, traded around $42.25 late in October.
Another competitor, New Jersey-based Becton, Dickinson and Company (NYSE:BDX), manufactures a line of needles, such as the SafetyGlide, SafetyLok and Eclipse which, too, have their risks. A health-care worker has to move the cover to expose the needle, and must put his or her fingers close to the needle after injection, and yes, has to retract from the injection needle, resulting in needle exposure; and usage of the needle can also cause blood splatter. BDX last traded around $66.70 on the NYSE.
So the road less traveled than the safety syringe is the one marked MRI technology, where Revolution truly plans to turn heads. RMCP is excited about the potential for color and 3D technology to take MRI technology into bold new worlds; specifically, the ability to early identify things like stroke, Alzheimer’s disease and breast cancer.
Whereas competitors abound in the safety syringe end of things, informed opinion points out that there really are none that have a similar MRI product. While there are color MRI systems, they just offer “artistic renditions” days after the fact. No one offers nearly real-time conversion into a color system based on brain structure. Here is where RMCP can truly shine.
The way things are now, based on industry sources, there are 20,000+ MRI units operating in the U.S. alone. They produce only grayscale images, limiting interpretation precision. A radiologist reads 100 to 300 flat gray “slices” to reach a diagnosis, so, identifying subtleties across grey shades and one-dimensional images takes both time and a great deal of experience
The technology we’re talking about consists of software which uses various color masks to produce full-color composite images from gray-scale MRI output. The resulting color images can be quickly viewed individually or all together as what the company calls a “riffle stack”.
This riffle stack consists of the individual MRI images assembled to create a single composite image that contains the data from the individual images. The riffle stack allows a radiologist, using a computer mouse, to page through the images, creating a 3-D appreciation of the colorized MRI output even though the images themselves are not 3-D.
The software program can also segment the data and create a true 3-D image of the area to be examined. For instance, bone, fluid and other tissue displayed in an MRI scan of the head can be electronically eliminated to allow a 3-D rendering of just the brain.
Whenever an MRI tech takes a scan, he or she then clicks once to send the images into the RevMed system, where they are automatically processed and returned – no humans or incremental costs involved. If the diagnosticians want color, that click costs $50; the display enhancement, another $25 on top; 3D, still another $25 (all costs approximate). Thus, the total comes to an economical $100 per MRI scan if the tech fully utilizes the system, following a $10,000-one-time installation and training fee. And as this is a software-as-service product, scan conversions are performed automatically, resulting in almost no incremental cost to RMCP. The result? Anticipated 90%+ gross margins.
It is estimated that there will be 40,000 MRI scans done in the U.S. this year, with 10% – 15% anticipated annual growth as the baby boomers age.
As we can see, the market for this enhanced MRI is significant, but one quietly approaching a capacity crisis. The market is expected to grow to $4 billion by 2010, snapping its fingers at the recession. The downside is that the number of radiologists needed to read scans is static at best, creating a mounting and critical information overload. As a result, new tools are needed to interpret the data produced effectively.
The company is projecting revenues of $2.1 million from the MRI technology and $11.4 million from the syringe business for 2010, leading to total revenue of $14.8 million for next year, more than $40 million the year after. Gross profit is projected at more than $7.3 million for 2010, more than $20 million for 2011. Clearly, this company is making the syringe and MRI business its launch pad for great things to come.
While the stock markets were going south last winter, RMCP was hitting its peak for the last 52 weeks, jumping to 71 cents a share, only scant weeks after climbing out of the ditch at 14 cents in mid-February. The stock was in about the middle of that trading range as October closed, circling around 50 cents. But with the advances being made in the MRI field, investors would likely warm to the colors the company’s new technology is showing to its medical practitioners, and consider this stock, potentially to change their portfolios’ colors to darker shades of black.
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