IsoRay, Inc (NYSE AMEX:ISR) CEO Interview

IsoRay
(NYSE AMEX:ISR)
CEO: Dwight Babcock

Website

Interview Transcripts:

Juan Costello: Good day from Wall Street. This is Juan Costello, senior analyst at the Wall Street Reporter. And joining us today is Dwight Babcock, the CEO for IsoRay Incorporated. The company trades on the New York Stock Exchange AMEX and their ticker symbol is ISR. Thanks for joining us today Dwight.

Dwight Babcock: Thank you, Juan. Thanks for inviting me.

Juan Costello: Great. Now starting off, give us a brief history and overview of the company for some of our listeners here that are new to your story.

Dwight Babcock: Well, I think as we’ve shared in the past, IsoRay started having a very unique radioisotope called Cesium-131, which offers the shortest half-life and the highest energy factor for an internal radiation therapy. And the business started off in prostate arena, we’ve been doing that for about 5 years. We’re just about to release our 5 year data and have it published. It shows a remarkable result of 98% success for non-reoccurring biological kill in PSA test as the measurement.

It’s interesting that while we were in the prostate arena, we knew that it was going to take a 5 year and elongated period of time to prove the efficacy of the isotopes in prostate; then expanded our horizons by looking at other cancers that were far more aggressive, killing people at a far more rapid rate than prostate cancer. We found that, really we have almost no competition for internal radiation therapy as it’s truest in the prostate where the alternative isotopes of Palladium, do not have enough energy to kill a fast growing cancer such as brain cancer, lung cancer, head-neck cancer and more vicious cancers that we know of.

And the other competitor in the prostate arena, Iodine, its half-life is 58 days. And I think most people intellectually understand that when cancers are doubling in size every 30 days, it doesn’t help to have a cancer fighting agent like Iodine as an alternative with the half-life of giving only half of its cells in some 60 days. So, we think we have a wonderful marketplace as we move into the other killer cancers and stuff. Doctors are – there is no silver bullet for brain cancer and some of the other cancers that exist, so we’re talking about how can we extend life while providing quality of life during that period. Doctors are looking for more and more alternatives when their primary efforts have failed.

Juan Costello: Certainly. And so talking about the recent financing to advance the GliaSite for the IRT – for the internal radiation therapy.

Dwight Babcock: Well, we are very excited. Obviously, the market is very receptive to our offer and our financing because this is an all cash with no warrant coverage, which is very unusual in this marketplace and let’s say, you know, smaller than expected discount to the date of closing which was about Thursday’s pricing. And so, we’re very excited about it, because it really provides the company both short-term and long-term funding to always maintain its AMEX listing which require the $6 million capital equity calculation and it also allows us to enhance the marketing efforts which we’ve just recently launched GliaSite both in the U.S. and internationally. We have a number of institutions and thought leaders that are really jumping on board like Cornell, Columbia, Baylor–that are helping us in different brain solutions and attacking brain cancers of all types. We’re very excited about what it is going to afford us the opportunity to go after.

They are using our seeds in mesh form, they are using the GliaSite, so we have super leaders in this technology that are having great success in metastasized cancers, neo glaucoma’s of the brain, as well as in angioma that’s often the main tumor that grow very rapidly and kills just a lot of brain cells that almost acts like a blood clot on the brain. We all know when we have people’s traumatic injuries that have blood clots; they always try to reduce that pressure.

Juan Costello: And so what are some of the other trends right now in the IRT sector and how well positioned is the company to capitalize and continue to grab market share?

Dwight Babcock: Well, we think we have a unique position because we have primary isotope that is second to none and it is a great alternative, it makes so much sense to place radioactive cancer killing treatment right at the source of the cancer rather than trying to use external radiation to penetrate through healthy cells. So in fact, we kill far less healthy cells in the process. We provide a treatment immediately at the time of removal and resection of a tumor. So it’s an all in one type of process that doesn’t require 30-40 return visits to the hospital’s external radiation, hoping you’re hitting all the margins that may have been left in the process of doing a resection of the tumor. We think we have an outstanding advantage as we go forward.

And frankly, you know, it’s so cost-efficient and effective that we think we’re going to be the poster child for whatever medical solutions come up, whether it is ObamaCare or some other alternative where we are really seeking lowest cost, highest efficacy.

Juan Costello: Certainly. And so perhaps you could walk us through your background and experience there Dwight, and talk a little bit about the management team over at IsoRay.

Dwight Babcock: Right, that was exciting to talk about really successful and dedicated people. When I had the opportunity to go and investigate IsoRay for a Board position, I was so impressed with the talent that we had, the management has now brought in in the last couple of years, Will Cavanagh, an exceptional individual, our R&D department, Fred Swindler, who is the head of our Quality and Assurance, Dale Boyce is our head Physics Specialist and these people are just leaders in the industry of what they do. And they are truly supported by the local management staff at the facility and manufacturing, we are just in time true manufacturer, so every order is custom made. We have at 99.9 success rate in delivering our product on time.

Juan Costello: And, so what are some of the goals and milestones here that you and the team are hoping to accomplish over the course of the next year?

Dwight Babcock: Well, I guess it’s important to note that unlike many people, who are promoting cancer solutions and whatnot, we are a solution that exist today, we are commercially viable, we are out there and we think that that is one of the major attributes rather than a future promise or hope. We are a solution today, that has just thought leaders from around the world are now approaching us with troubled cases that they have that have failed to respond, and we’re able to try to give them some sense of what our products can do; whether it could be beneficial for their patients. Expect to see our sales start to climb in the GliaSite where we just introduced it the first year. We have probably done 15 cases in the U.S. We’ve just shipped overseas, catheters supply for some of initial cases that are expected to start up within this next 30 days in Germany, so we’re very excited about that. We’re seeing a lot of lung cancer and odd cases using our mesh. That is growing in both numbers and institutions in the number of cases.

So, I would say that right now, we are looking at – I think of last year, we probably reported about 7% of our business came from non-prostate cases. At this point in time or I would say the groups latter quarters 12% and I think at the end of the year, we’ll probably report about 20% of our patients here are from non-prostate so we are very happy with that growth.

In the meantime, we still have some initial results being gathered by other institutions on our prostate. Indiana has been in the middle of the study that they are very excited about and we are hearing good things. We have a number of other physicians that are practicing on a daily basis using our products having great results. [Indiscernible] [0:03:26] reported 96% success with this population of a couple of hundred patients, so we’re seeing at both at the major medical institutions and the community institution, lots have accepted our product.

Juan Costello: Right. Dwight, I guess you sort of answered my next question– you are best known for the Cesium-131 therapy. And as you continue to speak with investors and the financial community, do you believe that the company story and the upside and, you know, specifically the GliaSite upside are completely understood and appreciated by them and if not, is there anything that is, do you think that investors or the financial community are missing from the story?

Dwight Babcock: Well yeah, we are trying to get the story out and we really did not push to get the story out ahead of when we thought we were really going to start at least from the time being. but I think that is ultimately what the investors are looking for. But I think we are at that inflection point, we expect revenues to increase. We think that they has occurred, it’s a stepping stone, it’s a growing annuity type of gain and revenue that we expect to happen quarter-over-quarter, and we expect that next 12 months that we’re going to be cash flow of positive, so we’re very excited.

Juan Costello: Well, great. And so once again joining us today is Dwight Babcock, the CEO for IsoRay Incorporated. The company trades on the New York Stock Exchange AMEX, ticker symbol is ISR, currently trading at 1.17 a share. The market cap is north of 34 million. And before we conclude here Dwight, to recap some of the key point, your key points, why do you believe investors should consider the company as a good investment opportunity today?

Dwight Babcock: Well, I think, we are the poster child of the lowest cost solution that exists today with the greatest efficacy. I think you’re going to find that we’re getting more and more adoptions worldwide now by people hearing about our products, we are having more and more presentations done at national and international convention speaking of the benefits of Cesium. I think the only direction for IsoRay is up at this point in time.

Juan Costello: Well, we certainly look forward to continuing to track the company’s growth and report on your upcoming progress and we’d like to thank you for taking the time to join us today and update our investor audience on IsoRay.

Dwight Babcock: Well, thank you Juan. I appreciate the time you afforded me.

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