One of the most promising companies in the brachytherapy space is IsoRay Inc. (NYSEMKT: ISR), a Richland, Washington-based company engaged in the development, manufacture and sale of Cesium-131, a radioisotope used in brachytherapy.
ISR’s Cesium-131 has numerous advantages over other radioisotopes. It has superior energy and the shortest half-life, which makes it an effective treatment option not just for prostate cancer but also for other forms of aggressive cancer.
IsoRay’s sole focus over the past decade has been to increase awareness of Cesium-131 among the patient and the medical community. And it has been successful in this regard as evidenced by the company’s shares performance in 2014. Last year, ISR shares were among the top performers on the NYSEMKT, gaining more than 190%.
The gains came on the back of some successful peer-reviewed studies that highlighted the effectiveness of Cesium-131.
On Wednesday, ISR announced its financial results for the quarter ended December 31, 2014. At the end of the quarter, the company had $20 million in cash on its balance sheet and no debt. This is very unusual for an early-stage company like IsoRay. However, the financial situation highlights the astuteness of the management, which took advantage of the surge in stock price last year and completed a secondary offering.
Given ISR’s robust cash position and current burn rate, the company will not need any additional cash for at least the next five years. This completely takes out the dilution risk, which is usually associated with early stage companies like IsoRay.
On the operating front, the company has not been doing too badly either. It remains committed to diversifying its product offerings through institutional-based studies. ISR also remains focused on expanding the use of Cesium-131 to aggressive forms of cancer even as prostate cancer remains the key area.
ISR’s management currently expects the company to gain some market share as well as see some revenue growth, which is a positive. In the past couple of years, ISR’s prostate revenue had seen a slowdown due to weakness in the national prostate cancer treatment market. However, that seems to be changing now, especially after some positive reports such as the one published in the Red Journal in August last year.
Meanwhile, IsoRay is continuing with its strategy of increasing awareness of Cesium-131 through peer-reviews. On Wednesday, the company noted that it is pleased with the release of the third peer-reviewed publication, which supports the use and success of Cesium-131 for prostate cancer. Importantly, one of the studies has data going back to nearly a decade.
Recently, the University of Pittsburg Medical Center (UPMC) released a report that covered a 9-year effort on using Cesium-131 for low and intermediate prostate cancer.
Commenting on the progress made by IsoRay, Chairman and CEO Dwight Babcock, had this to say, “Clinical evidence provided through protocols performed by major medical centers that prove utilizing Cesium-131 is either equal to or better than the current standard of care alternatives, with patients enjoying an improved quality of life, remains the key to IsoRay's success. These studies also aid in generating awareness and ultimately general adoption by community hospitals and physicians, which will in turn drive consumers to our product offerings. To this end IsoRay is totally committed and given this growing acceptance and interest in our now published results, we remain committed to our strategic sales and marketing objectives, which we believe will contribute to long term growth and achieving profitability."
All these developments are certain to have a positive impact on ISR shares, which after last year’s significant rally, have seen a pullback. Year-to-date, ISR shares are down more than 4% and are currently trading at around $1.40. It must be noted though that with no debt and $20 million in cash on its balance sheet, ISR shares look very cheap.
