Four months ago, Chatsworth-based biomedical company North American Scientific Inc. was riding high. Its stock was in near-record territory at more than $30 a share, and the company had just announced an acquisition of new technology that could give it access to a much broader marketplace.

But since then, North American Scientific’s stock has come crashing back to earth, plunging nearly 65 percent and wiping out nearly all of last year’s gains. As of last week, the stock was trading at about $12 a share, slightly above its 52-week low of $10.63 reached a month ago.

Investors, already skittish about small-cap companies, fled North American Scientific’s stock on fears of increased competition. The company makes radioactive “seeds” used to provide highly localized treatment called brachytherapy for prostate cancer.

“Small-cap pharmaceuticals came under some pressure last year” as investors fled for larger, more established companies, said John Calcagnini, an analyst with CIBC Oppenheimer Corp. in Los Angeles.

Then came word in October that giant Murray Hill. N.J.-based CR Bard Inc. was entering the market. The maker of vascular, urology and oncology diagnostic and treatment products generated sales of $1.1 billion last year, more than 60 times the annual sales of North American Scientific.

“(CR Bard’s) investment in brachytherapy was a small figure, some $5 million or so, but it really scared a lot of people away from North American Scientific,” said Navrose Alphonse, specialty pharmaceuticals analyst with Boston-based Leerink Swann & Co.

What’s more, Alphonse said, one of the hospital group-purchasing organizations last fall published a purchase price for the radioactive seeds used to treat prostate cancer that was some 30 percent lower than North American’s list price. That fed a perception that North American could be undersold, which sent the stock price down further.

“Even though it’s quite likely North American would have charged the same discounted price for a large-volume customer, it still left the impression that a competitor could charge less,” Alphonse said.

Nonetheless, Alphonse is bullish on the stock over the longer-term, saying its price could double within 12 to 18 months. Both he and the company are pinning their hopes on new technology obtained through the purchase of another biomedical research firm, Theseus Corp. This new product, called apomate (pronounced ape-o-mate) uses radioactive imaging technology to provide detailed pictures of heart muscles damaged in a heart attack or tissues impacted by conventional radiation therapy.

Currently, apomate is in phase-two clinical trials on human volunteers at multiple sites around the nation.

“We see a much bigger market for apomate than for our radioactive seeds,” North American Scientific chief financial officer Alan Edrick said. “Just look at the numbers: About 180,000 new cases of prostate cancer are diagnosed in the U.S. each year. But there are 4 million to 5 million heart attack patients each year, and a large percentage of those could require apomate imaging. Plus, you have another 400,000 patients receiving chemotherapy a year.”

In the short run, the September announcement of the $11.4 million acquisition of Theseus sent North American Scientific stock soaring over 50 percent to $30 a share.

But those acquisition costs put North American Scientific in the red. For the fiscal year ended Oct. 31, 2000, the company posted a net loss of $6.0 million (87 cents per share), a sharp reversal from net income of $3.4 million (49 cents per share) in fiscal 1999. Fiscal 2000 revenues were $17.5 million, up from $12.7 million.

And while the potential market for apomate may be huge, there’s no guarantee that North American Scientific will be able to tap into it. In the drug-approval process, nothing can be taken for granted.

Alphonse, though, remains bullish on the stock, saying that investor sentiment will change once phase-three trials for apomate begin, which is expected later this year. Also, by that time, he said, there may be more announcements of hospital group-purchasing contracts for the radioactive seeds.

This latter effort could be helped by two recent announcements. Last fall, North American Scientific teamed up with Santa Barbara-based Mentor Corp., which makes a delivery device for radioactive seeds, to jointly market their respective products.

The company also pushed for and last December received approval for its seeds from C.E. Mark, the European equivalent of the U.S. Food and Drug Administration.