IsoRay, Inc.
(AMEX: ISR)
Dwight Babcock, Chairman and CEO
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Juan Costello: Good day from Wall Street. This is Juan Costello, senior analyst with the Wall Street Reporter. And joining us today is Dwight Babcock, the chief executive officer for IsoRay Inc. which trades on Amex and their ticker symbol is ISER. Thanks for joining us today Dwight.
Dwight Babcock: Juan, thanks for inviting me.
Juan Costello: Great, anytime. Now starting off, give us a brief history and overview of IsoRay for some of our listeners here who are new to the story.
Dwight Babcock: Sure Juan. IsoRay is the exclusive manufacturer of Cesium-131 which is an isotope used in the fight against cancer. As you know radiation is probably one of the most vital and potent weapons against cancer. And Cesium-131 represents one of the most significant advances in internal radiation therapy in 20 years. This new weapon on cancer really means that doctors can aggressively treat a variety of cancers throughout the body.
Originally IsoRay started in the market of prostate cancer and was exclusively selling into that area of medical arena. Recently, we’ve determined its viability to expand into all other areas with our FDA-cleared isotope which allows us to treat cancers of all types in all parts of the body.
Juan Costello: Well, certainly and so yeah, talk to us about becoming the first treatment, the world’s first, the update on Cesium.
Dwight Babcock: Well basically again, as I say, we started in the prostate arena. We’ve have to date over six thousand patients with almost no failures. And so we’re very excited and went off to investigate other areas that are isotopes. Cesium-131 could be applied and we’re currently being used in lung, head and neck, eye cancer, colon.
And we’re very excited about some opportunities in the brain that we recently announced which we used either seed and/or liquid in a new product and device we acquired just a couple of months ago and it’s going through final testing and approval for the FDA which is for brain cancer.
Juan Costello: And sir, talk to us a little bit more about some of the trends right now in your sector Dwight, and how well positioned you believe the company is to capitalize on them and grab some share of the market?
Dwight Babcock: Well first off, as one of the leaders now in new therapies using internal radiation, which offers a lot of benefits with an extremely short half-life of only 9.7 days, we deliver a high-energy level and fast dosing to cancers, particularly fast-growing cancers such as brain. In this process, there are no other isotopes that really are equivalent in energy and power such as Iodine and/or Palladium.
The other competitors are external beam and of course you know the damage that typically happens by passing radiation beams throughout your body in an effort to hit a site.
We have recently developed methods by which we place our seeds in braided sutures and/or mesh. In the time of surgery or the removal of a tumor, we place our seeds either in the tumor, adjacent to the tumor, or in the area surrounding where the tumor was removed. So from the inside-out, we’re killing aggressively the cancer that may remain following a surgical procedure particularly when a surgeon has to be somewhat sparing due to other organs in the vicinity. I don’t think there’s any other internal isotope that has that capability compared to Cesium-131 that exists in the marketplace today.
Juan Costello: Certainly and so what else would you say makes the product and the company unique from some of the other players in the sector?
Dwight Babcock: Well I think we’ve been kind of flying under the radar screen being solely a prostate company. And certainly in the last year and a half while we’ve had to restructure ourselves from our expenses and revenue, we are now really pretty focused on all the other alternative sites that are being adopted. And we should be making some pretty significant announcements in the near future.
I think you’ll find us to be probably one of the few isotope companies that can say their making a change in people’s lives, helping them to return to normal lifestyle much quicker than any of the other competitors.
Juan Costello: Perhaps you can walk us through your background experience Dwight and talk a little bit about the strength of the management team there.
Dwight Babcock: Well, I’m certainly pleased with the management team we have. I came from an allied market in the insurance arena and data processing. I really feel that I’m kind of that generalist and financial manager. We have wonderful technical people that work in the R&D process. We have leading scientists that are world-renowned. Our senior staff is second to none.
Our manufacturing is a brand-new facility with an on-time delivery because we are a real-time, individual patient-made seed. We typically have to import our isotope and place it on our seeds within a seven to ten day period and deliver a custom order on time. It’s real-time delivery so to speak.
Juan Costello: Certainly. And what are some of the goals and milestones that the team is hoping to accomplish over the course of the next year?
Dwight Babcock: Well within next year, we expect ourselves to be cashflow positive. We see ourselves growing at a 30 to 40% growth rate this next coming year due to these new cancer sites that we will be treating. We have already and we’ll be talking about in the last quarter seeing a shift of over seven percent of our revenue coming from these new sites which is a dramatic change from the original prostate arena that we held ourselves in. We’re aggressively going out after new sites, new opportunities, and have a number of leading institutions across the country expressing interest to participate with us.
Juan Costello: Certainly. And when it comes to investors and the financial community Dwight, do you believe that the IsoRay story, your message and ultimately the company’s upside potential are completely understood and appreciated by members of the financial community?
Dwight Babcock: I think often to day, we have flown as I said, under the radar. But I think when you really look at it and say, “Here’s a company that has FDA clearances to use their product in any location of the body, has revenue, has manufacturing, and has a sales force out beating the bushes today. It is a superior product to price that we should be getting in Wall Street.
And I think as we increase our revenues as we expect with the brain cancers and other opportunities that we are working on, even in breast cancer, we’ll have opportunities to see this revenue grow dramatically.
Like I say, our first goal is cashflow positive. We reduced our burns significantly probably nearly 800% since I joined the company. So we’re very excited about our future opportunities.
Juan Costello: And, what are some of the drivers behind the company’s results for the full year which saw the company continues to narrow it’s loses?
Dwight Babcock: Well that’s been our focus. We were heading in so many directions with so many projects and we really needed to focus on what are people who are really in need who are suffering with cancer that often had incurable types of processes.
We really redirected our R&D and product development in the last couple of years. And at the same time had to get our cost under control where we couldn’t go willy-nilly out after everything that seemed liked a good idea.
So we focused where people are unfortunately dying and have a real need for another solution. Another arrow in the quiver for the doctor to aggressively go after and treat cancers and that’s what we’re doing. We’re very excited about it.
Juan Costello: Good. And so once again, joining us today is Dwight Babcock, the CEO of IsoRay Incorporated. The company trades on the Amex. Ticker symbol is ISR. Currently trading at 1.18 a share. The market cap is north of 27 million. And so before we conclude Dwight, to recap some of your key points here, why do you believe investors should consider IsoRay as a good long-term investment opportunity?
Dwight Babcock: Well I think our solutions to cancer and the ability to help us move towards a cure type process for cancer treatments. Cesium-131 is the best known internal radiation therapy available today. And I expect that we’ll see this become probably a standard of care in most areas of cancer treatment where someone wants to use internal radiation.
If any of your investors and patients and doctors have an interest, I’d suggest they go to our website at www.isoray.com and get as much information or contact us directly. We’ll be glad to lead them to major institutions and get them the information to help handle this dreaded disease.
Juan Costello: Well we certainly look forward to continue to track the company’s growth as well as report on your upcoming progress. I’d like to thank you for taking the time to join us today Dwight and update our investors on IsoRay.
Dwight Babcock: Juan, thank you for the opportunity. I look forward to talking to you again.