I last covered Izotropic in October 2019. Since then, the company has made some impressive strides and hit key milestones in its path to FDA approval for its revolutionary CT (computed tomography) technology for early breast cancer detection. Interestingly (and fortunately for us), the market has not realized these developments and the share price remains woefully underpriced. The company’s C$4.8M market cap is hardly indicative of their potential to disrupt the C$5B breast cancer imaging industry. I was also pleasantly surprised by Izotropic’s tight trading float for a company of their size and impressed that 70% of those shares are held by insiders and associates.
Breast cancer is one of the deadliest diseases worldwide affecting more than 1.7M women every year. Over 500,000 of women die from the disease annually. The earlier that breast cancer can be detected, the greater the probability that a treatment plan will be effective. The financial burden on the global economy cannot be underestimated, and the market is expected to grow from C$5B in 2020 to over C$7B in 2025. Several factors contribute to this market growth include an aging population, increased obesity rates, and rising health care costs. The following chart shows the market for breast imaging modalities, which can be broadly grouped into “ionizing” (such as Izotropic’s imaging system) and “non-ionizing” (such as ultrasound). Cost-efficient, early detection of breast cancer is critical to combating these excessive expenses and improving patient outcome.
Current breast cancer detection methods are low resolution, 2-dimensional (or “quasi” 3-dimensional), and often require painful compression of the breast. Ultrasound and MRI imaging do provide a 3-dimensional view of the breast but are largely used to assess abnormalities found in other imaging modalities (such as mammography and tomosynthesis, both of which only produce 2-dimensional images). Typically, a patient will undergo a mammography to detect any breast abnormalities, followed by an ultrasound to determine if the abnormality is solid or liquid. Afterward, a biopsy may be performed with the help of additional ultrasound or a MRI. The patient may undergo multiple rounds of imaging to accurately determine the location of the tumor before a biopsy can be performed. This process is long, costly (follow up screening in the US alone was over C$10B), and fraught with error (20% of mammograms are false negatives). There remains a large unmet need for a high-resolution, 3-dimensional imaging system that can accurately detect breast cancer in its early stages and provide a platform for efficient biopsy of potential cancerous abnormalities.
Izotropic Corporation (CSE:IZO, OTC: IZOZF, FRA:1R3) has developed a disruptive solution to the shortcomings of current imaging methods and has carved a new path for early breast cancer detection and biopsy. The company’s imaging platform, the Izotropic Breast CT Imaging System, produces true 3-dimensional images that are high resolution at incredible speed, taking 500 images in 10 seconds per breast. This technology requires no painful compression of the breast and delivers a small dose of radiation that is isolated to the area of interest (unlike whole-body computed tomography).
With the Izotropic Breast CT Imaging System, the patient lays face down on the system table placing the breast to be imaged in a hole in the table. The imaging hardware beneath the table circles around the breast and creates a series of raw-data images. The platform computer processes these raw images to reconstruct true 3-dimensional, high-resolution images, allowing radiologists to view the breast anatomy from any angle. This is an impressive technologic feat, which you can see in the images below. The Izotropic Breast CT Imaging System can detect lesions and tumors in the 3-5mm range, a vast improvement from the low-resolution scans of mammography that detect tumors with an average size of 11mm. This technologic leap cannot be overstated – the ability to detect tumors as small as 3-5mm could result in 1.5-year earlier detection time and significantly improve the efficacy of treatment.
Dr. John Boone of University of California at Davis has been working with a team to develop the Izotropic Breast Imaging System for the last twenty years. Over US$20 million has been invested to date in developing this revolutionary technology, which simplifies breast imaging for both patients and medical providers in addition to reducing costs. Boone is a medical physicist with 32 years of experience in academia, with broad interests in medical imaging, computed tomography, and breast computed tomography. He is a professor of radiology and biomedical engineering, and recently served as president of the principal medical physics organization in the U.S., The American Association of Physicists in Medicine (AAPM). Boone is co-author of the medical imaging textbook, Essential Physics of Medical Imaging, has also authored more than 200 peer-reviewed papers, and holds 13 U.S. patents. He has been the principal investigator of the Breast Tomography Project at the University of California Davis for the past 18 years, and his laboratory has been at the forefront of the academic development of breast CT technology.
Another key person in the Izotropic story is the CEO, Bob Thast. Over the past 35 years, Thast has served as chairman of the board, chief executive officer, senior executive, and director of several publicly listed companies. He has extensive knowledge of capital markets, financing activities, company management, and a track record of raising and attracting venture, early stage, and operating capital for companies he has directed and managed. Thast has expertise in strategic planning, business development, marketing, recruiting, product distribution, contract negotiation, legal, accounting, corporate governance, and regulatory requirements associated with public companies.
My first conversation with Thast left me with the impression that the Izotropic team had been meticulously constructed to bring expertise to all facets of the medical imaging development process: basic research, regulatory approval, and commercialization/exit. Since that conversation in October 2019, the following key additions to the team have been made:
Izotropic expects to begin its clinical study by Q2 2021 and submit the application for FDA approval by Q3 2022. The company will then look for a licensing partner to begin commercialization.
It is important to note that Izotropic will need to raise money over the next few months to achieve its commercialization objectives. This financing risk is the main reason IZO is currently trading at a C$5M market cap. The market opportunity in breast imaging is enormous, and in my estimation IZO’s patents alone more than support its current market valuation. Rapid progress in demonstrating commercial viability for Izotropic’s Breast Imaging Platform is where the big upside exists for IZO shareholders. An acquisition or licensing deal could occur as early as 2022 if Izotropic hits its milestones.
I have purchased IZO shares on the open market and intend to add to my position over the coming weeks. I believe that anything under C$0.30 per share is extremely attractive and IZO has the potential to be a 10-bagger from current levels over the next 12 months. The key will be achieving the regulatory milestones and finalizing IZO’s first commercial Breast CT imaging model by the end of 2020. Izotropic CEO, Bob Thast, has an extensive track record of nurturing early-stage biotech companies to maturity, and his expertise and commitment to bringing the Izotropic Breast CT Imaging technology to market is a strong predictor of IZO’s enormous upside potential. He personally welcomes any questions from investors at email@example.com.
Izotropic Corporation (CSE:IZO)
Common Shares Outstanding: 29,965,499
2,900,000 x $.20 (average price) = C$580,000
6,509,000 x C$0.20 (average price) = C$1,301,800
Fully Diluted Share Count = 39,374,998
Fully diluted market cap at C$.16 per share = C$5.8 million
Author is long IZO shares at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing and promotional services by Izotropic Corporation.
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