EPIX: A Better MRI

11/22/2002 12:00 am EST

Focus:

Tobin Smith

Founder and Chief Research Analyst, NBT Equity Group

"Cardiac disease is the 800-pound gorilla in healthcare," says Tobin Smith, editor of ChangeWave Investing.  "The boomers are overweight, over-stressed, and their hearts need help. Medicare and insurance companies reimbursement rates are going up for advanced diagnosis and non-invasive treatments because they have proven to save billions of dollars over surgery. To benefit from this trend, we are looking at stocks in the cardiac care sector."

"Our first play on cardiac care is a development stage company that our research shows is months away from key FDA approvalsEPIX Medical (EPIX NASDAQ).  We'll add this stock to our Legacy 2010 portfolio. In this portfolio, we look for development stage companies for your speculative money that have the potential to grow 500%-1,000% over the next five yearsor go crashing down in flames if their product or service does not get critical mass or approvals.

Early diagnosis of vascular disease is the key to reducing heart attacks and costly angioplasty. The problem is that current techniques on non-invasive MRI don't do a good enough job; it's too hard to see the arteries well enough to make consistently accurate diagnoses. EPIX is developing drugs to both improve the capability and expand the use of magnetic resonance imaging (MRI) by an order of magnitude as a tool for diagnosing human disease.

“The company's lead product under development, MS-325, is an injectable intravascular contrast agent. This drug essentially makes MRIs look like a color camera is inside your chest and aimed at your arteries. The market for a non-invasive way for physicians to accurately see your arteries is worth billions...and waiting for the FDA's green light will be too late. We'll use a buy under of $7 and look for $15 around FDA approval time.”

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