Radiation therapy product maker North American Scientific Inc. is hoping that a breakthrough breast cancer treatment not only will revitalize the company's fortunes, but also stave off delisting from the Nasdaq National Market.
Problems integrating a 2003 acquisition and a maturing market for its core prostate cancer treatment product line left the Chatsworth-based company unable to meet growth forecasts, triggering a sell-off that over time has shrunk its market capitalization below $37 million.
North American's shares, which generally traded above $10 in 2002, have fallen 43 percent in the past year alone, closing at $2.19 on April 12.
"We frankly just disappointed people by not hitting our numbers and I can't blame any shareholder for losing some confidence in the company," said Chief Executive Michael Cutrer.
On March 16, North American received a warning from Nasdaq that based on its fourth-quarter filing the company was not in compliance with the minimum $10 million stockholders equity requirement for continued listing on the Nasdaq National Market, generally comprised of large- and mid-cap companies.
The company could move to the Nasdaq Small Cap Market, but instead it expects to submit a plan to Nasdaq officials on how it intends to achieve compliance to remain on the larger market. As an alternative to the shareholder equity requirement, the company could achieve National Market compliance by maintaining a $50 million market cap.
Cutrer said that could be achieved by keeping the share price around $2.80. And to that end, company officials last month announced an initiative to adapt its prostate cancer line to also treat early stage breast cancer, with the new brachytherapy product scheduled to launch at a major radiology oncology meeting in November.
Brachytherapy is a minimally invasive procedure in which radioactive material, sealed in titanium capsules the size of a grain of rice, are implanted into cancerous tissue to deliver a short-range dose of lethal radiation. The targeted approach minimizes the amount of radiation that surrounding healthy tissue might receive.
The approach is being used by a handful of other companies to treat early breast cancers in conjunction with surgery and chemotherapy, but the most commonly used procedure can take up to six weeks and involve inserting multiple catheters into the breast to deliver and later remove the radioactive seeds. North American Scientific's approach would take only five days using a special multi-channel catheter that can insert either low-dose or high-dose seeds in up to a dozen locations in a tumor with only one incision.
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