Date: 5/22/12
Price: Free
SmallCap Network provides comprehensive research and opinions on CXM, CAPS, SNWV and BIEL.
What a Fragmented Diabetic Foot Ulcer Treatment Market Really Means: SNWV, CAPS, BIEL, CXM
Less than two weeks ago, Cardium Therapeutics Inc. (AMEX:CXM) was all the rage. The stock soared from a peak of $0.13 to a high of $0.59 on news that its diabetic foot ulcer treatment had been approved. Then, CXM suffered the same fate as Bioelectronics Corp. (PINK:BIEL), SANUWAVE Health, Inc. (OTC:SNWV), and Capstone Therapeutics Corp. (NASDAQ:CAPS) - each of which is also working on a foot ulcer treatment - suffered after they announced something encouraging. The stock fell back, and by more than a little, when the euphoria waned and reality set in.
To be fair, Cardium Therapeutics has a good product. Excellagen is a topical gel, and the only collagen-based wound management product available in the United States right now; collagen is used in other delivery formats, but that clearly doesn't solve problems for wound patient, and diabetic wound patients in particular. So, the FDA gave it 510k clearance a couple of weeks ago, and the stock flew off the shelves. Problem is, approval is one thing - selling it is another. While investors can at least expect some sales, this is still a bit of an undeveloped market, and there's still plenty of competition nipping at the heels of CXM.
Bioelectronics Corp. is one of those competitors...or eventually will be anyway. It's taking a different approach though. Rather than a topical ointment, it's using electricity impulses to induce a better healing response. And, it's not just for diabetic-based foot ulcers. A study conducted by Temple University suggests that the BIEL technology may have merit as a treatment for any and all body pain and wounds.
SANUWAVE Health is in the dance too. It completed a key study around the middle of the year that ultimately led to a submission to the FDA. If the regulatory agency approves this so-called dermaPACE (which a device - not a bandage) probably sometimes in early 2012, it could be a real threat to Cardium. The SNWV approach uses acoustic pressure to stimulate new vessel and tissue regeneration.
Then there's Capstone Therapeutics, which is taking the most conventional approach among these four names in that it's creating an actual drug to treat diabetic foot ulcers. Actually, it's a synthetic peptide designed to replace/assist a naturally occurring peptide in the human body that is known to stimulate the body's natural healing process. CAPS is currently seeking partners/licensees to continue the development of its Chrysalin-based product candidates. Though it has partners interest in the peptide technology for other purposes, the diabetic foot ulcer arena does not appear to be priority at this time despite the fact that Capstone's may well be the best option for a diabetic foot wound patient.
While all of these stocks are opportunities, the fact that the market is seeing four VERY distinct solutions to the same problem suggests these biotech names are throwing darts more than moving in a specific direction. That doesn't exactly bode well for the marketability of any of them. Generally speaking, when there's a clear 'best path' to a solution, several companies tend to take that or parallel paths. When there are four solution - each of which could work or not work well - being a shareholder can be a matter of luck as much as it is being savvy. Surely one of 'em is on the right track though.
To be fair, Cardium Therapeutics has a good product. Excellagen is a topical gel, and the only collagen-based wound management product available in the United States right now; collagen is used in other delivery formats, but that clearly doesn't solve problems for wound patient, and diabetic wound patients in particular. So, the FDA gave it 510k clearance a couple of weeks ago, and the stock flew off the shelves. Problem is, approval is one thing - selling it is another. While investors can at least expect some sales, this is still a bit of an undeveloped market, and there's still plenty of competition nipping at the heels of CXM.
Bioelectronics Corp. is one of those competitors...or eventually will be anyway. It's taking a different approach though. Rather than a topical ointment, it's using electricity impulses to induce a better healing response. And, it's not just for diabetic-based foot ulcers. A study conducted by Temple University suggests that the BIEL technology may have merit as a treatment for any and all body pain and wounds.
SANUWAVE Health is in the dance too. It completed a key study around the middle of the year that ultimately led to a submission to the FDA. If the regulatory agency approves this so-called dermaPACE (which a device - not a bandage) probably sometimes in early 2012, it could be a real threat to Cardium. The SNWV approach uses acoustic pressure to stimulate new vessel and tissue regeneration.
Then there's Capstone Therapeutics, which is taking the most conventional approach among these four names in that it's creating an actual drug to treat diabetic foot ulcers. Actually, it's a synthetic peptide designed to replace/assist a naturally occurring peptide in the human body that is known to stimulate the body's natural healing process. CAPS is currently seeking partners/licensees to continue the development of its Chrysalin-based product candidates. Though it has partners interest in the peptide technology for other purposes, the diabetic foot ulcer arena does not appear to be priority at this time despite the fact that Capstone's may well be the best option for a diabetic foot wound patient.
While all of these stocks are opportunities, the fact that the market is seeing four VERY distinct solutions to the same problem suggests these biotech names are throwing darts more than moving in a specific direction. That doesn't exactly bode well for the marketability of any of them. Generally speaking, when there's a clear 'best path' to a solution, several companies tend to take that or parallel paths. When there are four solution - each of which could work or not work well - being a shareholder can be a matter of luck as much as it is being savvy. Surely one of 'em is on the right track though.
Matthew Briar is a paid contributor of the SmallCap Network. Matthew Briar's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
