The Russian financial crisis has created a wonderful buying opportunity for us in one of our favorite stocks, ABMI. As many of you know Brenda and I have spent a great deal of time researching American BioMed. We have talked with Steve Rash, Dr Samuel S. Ahn and other medical professionals and come to the following conclusion: The time to buy ABMI will never get any better.
American BioMed, Inc. manufactures, develops and markets minimally invasive medical devices for the treatment of vascular disease. ABMI is a player in a market that is growing 30 to 35% per year. In fact, the minimally invasive surgery segment is the fastest growing segment of the healthcare industry. One in four Americans suffer from some form of coronary or peripheral vascular disease. Although a small company, American BioMed is developing one of the broadest product lines in the industry. American BioMed is already a premier provider of 100% silicone catheters. Sales increased 38.1% in the first quarter of 1998 compared to the same period in 1997. Second quarter numbers were down due to a delay in sales for the most part due to the need to complete CE Mark approval. This approval will come any day now and the company's third quarter may be the first of many quarters of continued revenue growth:
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Silicone balloon catheters offer many advantages over latex or PVC catheters. The most important of these advantages may be that a silicone catheter will not provoke an allergic response. Increasingly high numbers of latex allergies are being reported. Nearly 1 out of every 5 healthcare workers may be sensitive to latex due to their increased exposure. Even among the general population the number of sensitive individuals may be as high as 6%. This rise in sensitivity, and corresponding litigation, is forcing the healtcare industry to look to alternatives to latex. Frequent use of latex in patients or by healthcare workers can result in sensitization that may place some
individuals at risk for life-threatening allergic reactions. The 100%-silicone design of the company's catheters negates the potential risk of intraoperative anaphylaxis. American BioMed has the right products at the right time.
The Company has the only complete line of 100% silicone balloon catheter line for use in treating vascular disorders. Currently ABMI has 10 FDA approved balloon catheters, six of which are currently marketed worldwide. The company recently began selling the Ahn Thrombectomy Catheter, used for the removal of clots from blood vessels. This unique catheter incorporates a distal dual balloon design to more effectively remove emboli, as well as a proximal indicator safety balloon that allows the surgeon to visually determine inflation volume. The US market for this product is estimated to be as high as $30 million dollars a year.
Other products in R&D include the OmniCath, an atherectomy catheter designed to remove atherosclerotic plaque from obstructed blood vessels throughout the body. This product is entering phase II clinical testing. The OmniCath Atherectomy Catheter System allows physicians to remove atherosclerotic plaque from obstructed blood vessels throughout the body by enlarging the narrowed vessel openings and restoring normal blood flow. When positioned within a target vessel, the plaque is gently shaved away from the vascular wall by a small rotating blade, designed into the catheter, and suctioned out through a vacuum line for further analysis. The OmniCath is designed to reduce or eliminate surgery, lessen surgical morbidity and mortality, and decrease hospital stays with associated cost/rehabilitation. The company commenced Phase II clinical studies in the U.S. in August 1996, and these trials are continuing. This product is protected under six patents. If the FDA approves it's use for all indications, as expected, the OmniCath market opportunities will be in excess of $550 million a year in the U.S. alone.
The OmniFilter, a percutaneous guidewire microfilter that converts a standard guidewire into a temporary microemboli filter. The OmniFilter is used to prevent stroke-causing blood clots from reaching various organs of the body during carotid balloon angioplasty procedures. Its patented "purse string" closure secures clot removal without loss into the blood stream, and its cost-effective design reduces the chance of stroke and prevents distal embolization. Currently under development, prototypes are anticipated to be available by the end of September. This technology is supported by an existing patent. Industry analysts estimate an annual world-wide market of $3 billion, with the U.S. representing about 50% of the market. Product launch is expected in 1999.
The OmniStent, in two separate stent designs, which will be used to hold open weakened blood vessels. Stents are one of the hottest growth areas of minimally invasive surgery. Unique in design, no other company has met the challenge of manufacturing and deploying a bifurcated stent. Made of nitinol, the company's stents have memory properties that allow them to return to a predetermined shape and adjust to the size of the artery. The stents are available in both balloon-expandable and self-expandable delivery systems. This technology is supported by two existing patents and a related Continuation In Part, filed in June 1995. Clinical trials are anticipated to begin in late 1998.
The company currently has over 25 patents and 11 FDA approvals covering it's broad product portfolio, and addresses an annual worldwide market estimated to be in excess of $10 billion and growing.
American BioMed is an ISO 9001 certified company. As a result, the company signed it's first OEM deal with Polamedco in February. The company is currently negotiating other OEM opportunities. American BioMed has also applied for CE Mark which will allow for sales to the 15 countries making up the European Economic Community (EEC). American BioMed expects to receive CE Mark approval within days from now .
In May, American BioMed received a $5 million equity line of credit which will help to fund necessary R&D efforts and market products world wide.
American BioMed is looking at opportunities to increase it's market penetration. A well designed plan to add world class distributors is paying off but the company continues to look for other ways to grow. As such the company is currently communicating with several major U.S. and international medical companies. Management will continue to identify healthcare companies seeking new proprietary products to strengthen their existing market position. By selecting the appropriate strategic alliances, joint venture arrangements, and licensing and distribution agreements, ABMI can become a dominant player in their market.
This material is not to be regarded as investment advice and is only for informative purposes. Before making a purchase or sale of the said securities, we recommend consultation with a registered securities representative.
This material was prepared for the Brenda's Best Stock Picks Update.
If you or any of your friends interested in being on this list e mail have them contact me at jfhenken@ix.netcom.com
Regards, Jeff
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