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Earn Real Profits From Virtual Colonoscopy Technology
By Michael Brush
Exclusively for InvestorIdeas.com
October 11, 2007
Colon cancer is the second most prevalent cancer. It’s also a highly lethal. Lung cancer is the most common and most lethal form of all cancers, accounting for 17% of all cancer deaths around the globe.
But it doesn’t have to be this way.
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When these cancers are detected early, they kill only 10% to 15% of their victims.
So why aren’t these cancers caught earlier? Lung cancer can be hard to detect. And what’s thought to be the most effective test for colon cancer -- or colonoscopy -- is not only unpleasant. It can be lethal, too. This helps explain why less than half of people over 50 – who are supposed to get screened regularly for colon cancer -- actually get a colonoscopy.
A London-based company called MGT Capital Investments (MGT) thinks it can change all this by offering some technology which allows doctors to give patients a “virtual colonoscopy.”
MGT offers a computer-assisted detection system that helps doctors carry out less invasive scans for tell-tale colorectal polyps -- and also lung lesions. In a virtual colonoscopy, X-ray “slice images” developed through computer tomography (CT) are reconstructed by computer to provide a virtual image of the colon. The images are then examined for signs of cancer. If polyps are found, the imaging technology can be used to track their progress.
Here are two factors that suggest you might be able to make some money betting that MGT will succeed in selling this technology:
- First, MGT’s chief executive Tim Paterson-Brown just bought $937,500 worth of stock around current prices or at $3.75 per shares.
- Second, the company just did an initial public offering in London which allowed it to raise enough cash so that it now has around $78 million on the balance sheet, or about $2 a share in cash. That could be enough to assure current investors won’t be diluted by more capital raises in the near future, given that the company spent about $7 million in the first half of this year.
MGT’s cancer screening technology is in a division called Medicsight. It also has a subsidiary called Medicexchange which operates Medicexchange.com, a website where vendors can sell imaging-related products used in diagnosis and treatment of various cancers.
Virtual Colonoscopy
MGT’s Medicsight division offers computer-aided detection (CAD) applications that analyze CT scans to detect colorectal polyps and lung lesions. Compared to a standard optical colonoscopy, which uses a fiber optic camera to examine the colon and bowel, virtual screening is less invasive, cheaper and quicker.
A study by the American College of Radiology Imaging Network (ACRIN) released earlier this month endorsed virtual colonoscopy as an effective option. MGT’s Paterson-Brown thinks the study will help his company sell Medicsight’s virtual colonoscopy technology. The market research firm Frost & Sullivan suggests radiologists expect the use of computer tomography procedures to grow by 35% over the next five years.
MGTs virtual colonoscopy technology is approved for use in Europe and Canada. The company is working on approval in the U.S., China and elsewhere. It already has several distribution agreements in place.
The bottom line: You always have to take long-term market growth projections with a grain of salt. And even if the market for this technology is strong, MGT has a big competitor in Siemens (SI). But MGT’s CEO has plunked down a sizeable bet that’s probably worth following.
Disclaimer
At the time of publication, Michael Brush did not own or control shares in any of the companies listed in this column. Mr. Brush is an independent columnist for this web site.
For more on Insiders Corner disclosure, see the disclosure section in About Insiders Corner: http://www.investorideas.com/insiderscorner/. InvestorIdeas.com Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp. InvestorIdeas is not affiliated or compensated by the companies mentioned in this article.
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