Investing in the Next Generation Producer of Medical Isotopes in the U.S.

Over the past several years, Advanced Medical Isotope Corporation ADMD has positioned itself to become a leading domestic Company in the fast-growing field of Nuclear Medicine.

ADMD is engaging in the production and distribution of medical isotopes, such as Molybdenum-99 (Mo-99), as well as medical isotope in vivo delivery systems for advanced diagnostic and non-surgical therapeutic applications.

Much of nuclear imaging depends on a steady supply of the isotope Mo-99. A byproduct of nuclear fission, Mo-99 is used to produce another radioactive substance, technetium-99m, which is employed in more than 16 million nuclear imaging procedures every year in the United States alone. These include everything from sentinel node biopsies in cancer surgery to bone scans and cardiac stress tests.

Unfortunately, the supply of Mo-99 and other radioisotopes has been unreliable at best. All of the Mo-99 used in the United States is imported, with the main source being the National Research Universal (NRU) reactor at Chalk River, Ontario, Canada. A shutdown for repairs in May 2009 contributed to a global radioisotopes shortage; while the reactor has been back in operation since August 2010, it is scheduled for closure in 2015.

The shortage showcases a critical gap in the supply chain. Although the United States has many domestic reactors that could produce the radioisotopes, they do not have the necessary processing facilities or the capacity to take time away from other projects to produce Mo-99. As a result, new production strategies are desperately needed. For some procedures, there's simply no alternative, and without a reliable domestic supply of isotopes, nuclear medicine would severely limit doctors' ability to diagnose and treat many diseases.

Already, some clinicians have switched to using thallium-201, which is still commonly produced and used in heart stress studies. Additionally, physicians are finding it harder to get their hands on iodine-131, another radioisotope that is used to treat thyroid cancer, Graves' disease and hyperthyroidism.

Alternatives for many procedures exist, including computed tomography (CT) and positron emission tomography (PET) scanning, using radioisotopes not made in nuclear reactors, but these have drawbacks ranging from increased cost and greater radiation burden to lower image quality.

In response to this ongoing crisis, strategies are being formulated to increase radioisotope production in the United States. These plans include developing a way to produce Mo-99 and other radioisotopes not with a nuclear reactor but rather with newly designed compact systems. Currently these strategies are in the planning stages, including at Kennewick, Washington-based Advanced Medical Isotope Corp. Should such plans work out, it may be possible to produce a wider variety of radioisotopes in addition to Mo-99, each with its own specific medical application.

One such radioisotope worth producing in greater amounts within the United States is actinium-225, whose daughter bismuth-213 is used for advanced research in therapy of leukemia and other cancers, and also holds promise for treating human immunodeficiency virus (HIV). Additionally useful in cancer diagnosis and staging is carbon-11, which has been employed as a radiotracer in PET scans to study both normal and abnormal brain functions related to various drug addictions. It is also used to evaluate diseases such as Alzheimer's. This past February, a research paper in the journal Archives of Neurology reported the use of carbon-11 PET scans to detect in vivo fibrillar beta amyloid in older adults.

Fluorine-18 is the primary PET imaging isotope, and is used for cancer detection, heart imaging and brain imaging. Last year, in a clinical trial at Johns Hopkins University, a PET agent built around fluorine-18 readily and safely distinguished the brains of Alzheimer's disease patients from those of healthy volunteers. The study authors concluded in the June 2010 Journal of Nuclear Medicine that their agent could lead to better ways to distinguish Alzheimer's from other types of dementia, track disease progression, and develop new therapeutics to fight the memory-ravaging disease.

The Global Market for Oxygen-18 (O-18), a rare and stable isotope target for making the PET isotope Flourine-18 (F-18), is approx. $38M and has been growing almost 20% annually. The market for PET-specific isotopes is currently over $1B, growing over 25% annually, providing a great opportunity for AMIC to position itself as a major supplier of O-18 to other major F-18 FDG manufacturers.

ADMD is currently shipping stable isotopes worldwide and is developing a proprietary production method to manufacture Molybdenum 99 (Mo-99) – a method which the Company believes will be the fastest and least expensive with highest yield to solve the current critical shortage of Mo-99.

Comprised of top industry experts for isotope production and application, ADMD offers investors an opportunistic investment vehicle to participate not only in the explosive field of medical isotopes, but if successful, ADMD will be the first domestic producer of Mo-99 in the U.S.