Category: Baystreet Newswire
Date: Wednesday, September 03, 2014
New York, NY / ACCESSWIRE / September 3, 2014 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has initiated coverage on Medifocus, Inc. (TSXV: MFS.V and OTCQX: MDFZF), a healthcare company focused on developing and commercializing minimally invasive heat-based therapy systems for the treatment of cancerous and benign tumors.
"With the recent acquisition of Prolieve, MFS owns a revenue generating commercial Benign Prostatic Hyperplasia treatment product targeting the BPH drug therapy market. Medifocus also has initiated pivotal Phase III clinical trial for commercialization of its second product, the APA 1000 Breast Cancer Treatment System," stated Ajay Tandon, CEO of SeeThruEquity. "We are initiating coverage with a target price of $0.52."
Additional investment highlights are as follows:
Significant revenue potential for Prolieve
Since its acquisition in 3Q’CY2012, revenues from Prolieve have grown at a robust 221% CAGR through 4Q’CY2013, while user sites have experienced 168% CAGR. Long-lasting and immediate relief from BPH symptoms coupled with minimal side-effects continues to drive market share and revenues for Prolieve. Although Medifocus’ current focus is the surgical and minimally-invasive treatment market worth an estimated $150mn in the U.S., MFS is well positioned to penetrate the ~$8bn BPH drug market by marketing Prolieve as a better alternative to prescription drug therapy and providing mobile service treatment in GPs’ offices. Additionally, MFS is planning foray into the International market and has struck two key strategic agreements in the Asia-Pacific recently to obtain CFDA (China FDA) approval and distribute Prolieve in China and other Asian countries. With only $1.3mn in its books as on March 31, 2014, MFS plans to raise ~$6mn in equity financing in FY15E for executing the market expansion of Prolieve in the U.S. and internationally.
APA 1000 Breast Cancer System in Pivotal Phase III Trials
Medifocus has initiated pivotal Phase III clinical trial for commercialization of its second product, the APA 1000 Breast Cancer Treatment System. The Phase III Breast Cancer treatment study has been approved by both the US FDA and the Canadian Bureau of Medical Devices (BMD). MFS believes there is a high probability of meeting end point, as Phase III criteria is no more stringent than phase II. The company also believes that there could be early approval or licensing deal possible with results from 50% patients. We believe the efforts of MFS to accelerate the APA Phase III study should result in early approval of the system, probably in late 2016 or early 2017. The addition of a second revenue generating product with a recurring business model (disposable probes) similar to Prolieve should favorably impact both the top line and bottom line of MFS. Given the current heightened interest and valuations on the street for Breast Cancer Treatment technologies, any positive news of APA 1000 meeting end point could significantly drive valuation of Medifocus.
High profit margin business model with recurring revenue stream
Medifocus employs a highly profitable business model with a recurring revenue stream for its Prolieve treatment system. At the core of the business model is sale of disposable kits which need to be purchased from MFS. For Urologists with installed Prolieve system, MFS generates gross margins of 68% (Revenues of $900 per disposable kit and cost per kit of $285) while gross margins on the mobile service are higher at 76% (Revenues of $1,200 per disposable kit and cost per kit of $285)
The report is available here: Medifocus Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will also be available on these platforms.
Please review important disclosures on our website at www.seethruequity.com.
About Medifocus, Inc.Medifocus owns two fully developed technology platforms with comprehensive United States and international patent protection: (i) The Endo-thermotherapy Platform-a catheter-basis focused heat technology platform that utilizes natural body openings to deliver precise microwave thermotherapy to the diseased sites. The United States Food and Drugs Administration (FDA) approved Prolieve Thermodilatation System for the treatment of Benign Prostatic Hyperplasia (BPH) was developed based on the Endo-thermotherapy and is currently generating revenue; and (ii) the Adaptive Phased Array (APA) Microwave Focusing Platform, invented by the Massachusetts Institute of Technology, licensed to Medifocus directs precisely focused microwave energy at tumor center to induce shrinkage or eradication of tumors without undue harm to surrounding tissue. Medifocus' APA 1000 Breast Cancer Treatment System, developed from the APA technology platform, has received approval from the FDA and Health Canada to conduct the pivotal Phase III clinical trials. Medifocus believes that these two technology platforms can provide the design basis for the development of multiple cancer treatment systems for surface, subsurface and deep seated localized and regional cancers.
Please visit www.medifocusinc.com, www.prolieve.com and Medifocus Facebook Page for more details.
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
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