Brian Marckx, CFA is the Senior Medical Device Analyst with Zacks Investment Research and a popular Seeking Alpha author. I invited Brian to share his three favorite medical device microcap ideas with our readers.
Brian Marckx: Thanks for having me, Joe. I cover about 20 companies currently. Some of my top picks are $CEMI (Chembio Diagnostics), $VRSEF (Verisante Technology), and $SNWV (Sanuwave Health).
Tell us about $CEMI, one of your top picks.
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Brian Marckx: Chembio Diagnostics makes a rapid HIV-testing device that uses oral fluid (saliva) as well as blood as the sample. In my opinion, $CEMI has a big-time technology and very talented management.
Joe Hage: Has the $CEMI technology been cleared for use by the FDA?
Brian Marckx: The oral fluid product is on the market in Brazil and is currently in late-stage testing in the U.S.
Joe Hage: What about $CEMI that catches your attention and makes it a top pick?
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Brian Marckx: The competitive device is sold by $OSUR (OraSure Technologies, Inc). $CEMI’s dual-path platform technology could be superior in accuracy.
Joe Hage: You were saying “patients are fickle” so versus a traditional blood-based test, a saliva-based test might be a low-enough barrier to get a patient to be tested at all. That the concept is to get patients to test at the point of care and perhaps get counseling.
Brian Marckx: Yes, HIV is under-tested and Chembio’s technology being more patient-friendly has the potential to increase compliance.
Joe Hage: Brian, tell us what you like about $VRSEF, Verisante Technology.
Brian Marckx: $VRSEF is a Canadian company which makes a melanoma detection device called Aura. It just rec’d approval in Canada and CE Mark. Aura will launch in Canada, Europe, and Australia. Aura detects all forms of skin cancer, unlike a device made by $MELA (MELA Sciences, Inc).
Dermatologists will be hesitant to use any device without relatively high sensitivity; Aura looks like it could have that.
Joe Hage: How has $MELA done regarding penetration into the dermatology industry and how likely is it that $VRSEF can catch up?
Brian Marckx: $MELA’s MelaFind was just approved by FDA after a lengthy delay due to less than compelling trial data and is just now gearing up for the launch of their device.
$VRSEF will initially launch in Canada, Europe and Australia, all of which, especially Aussie, have high incidence of skin cancer. Following launch in those markets $VRSEF will work towards US approval.
Joe Hage: Got it. Thanks. Tell us about $SNWV, Sanuwave Health.
Joe Hage: I know $KCI just got bought out in October at $68.50 per share. You were saying about a billion of Kinetic Concepts‘ revenue is in DFU? Once Sanuwave’s technology gets cleared by the FDA, how do you see them competing with such a huge player?
Brian Marckx: $SNWV’s dermaPACE is less expensive and looks to be at least as effective as competing products that are already on the market. $SNWV would primarily sell into the specialist market.
Joe Hage: Through distribution or a dedicated sales force?
Brian Marckx: $SNWV the initial game plan is to roll it out with a dedicated sales force.
Joe Hage: Brian, thanks so much for educating us about these micro-caps we otherwise might have missed. When should my readers contact you? #MedDevice
Brian Marckx Thanks for having me Joe. I write frequent blogs on Seeking Alpha, you can find me here http://seekingalpha.com/author/brian-marckx.
I would encourage anyone that has interest in small/microcap names in the med device industry to send me a tweet, email, message.
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