In a Sept. 26 research note, analyst Jason Kolbert shared key takeaways from IsoRay Inc.'s (ISR:NYSE.MKT) recent call by its interim CEO to discuss the Q4/18 financials and provide a corporate update and path forward. "Our read of the call was positive, but we also had the sense that IsoRay needs some time to execute its strategy," wrote Kolbert.
He reported IsoRay's financial results for Q4/18, which ended June 30, 2018. The company achieved its sixth consecutive quarter of revenue growth, he noted. Q4/18 revenues of $1.6 million ($1.6M) reflected a 17% year-over-year increase and a 2% quarter-over-quarter increase.
Expenses, which trended similarly, went up to $3.9M from $3.2M in the same period a year ago, and went up from $2.9M in the previous quarter.
IsoRay posted a net loss of $2.3M for Q4/18 and ended its fiscal year with about $11.6M in cash, the analyst noted.
Kolbert also discussed Build-Blu, a product in development that could allow IsoRay to compete in the intra-operative segment, which accounts for about 25% of the prostate cancer brachytherapy space. This is where physicians, during the procedure, customize the seed placement to the patient's specific anatomy.
Build-Blu is a seed stranding device that can be configured specifically per patient in real time. The product, in the late stages of regulatory approval, is expected to be available in 2019.
Lastly, Kolbert discussed GammaTile and why he considers it "a bit of a wildcard for IsoRay." This year, GT Medical is scheduled to launch commercialization of this product, which is a brachytherapy technology that incorporates radioactive seeds in customizable collagen-based carriers for the treatment of recurrent brain tumors. IsoRay supplies the cesium-131 seeds for GammaTile.
The primary unknown concerning GammaTile, the analyst noted, is how successful GT Medical will be selling it, making it "hard to predict the revenue stream" for IsoRay. On the other hand, he pointed out, the market opportunity in primary and secondary brain cancer is "large," encompassing up to 225,000 patients, most of whom have undergone resection.
Kolbert concluded his report with this: "We will be looking for signs that the company is able to build its market share in prostate cancer and watching for signs that GT Medical is successfully commercializing its new product GammaTile."
H.C. Wainwright & Co. has a Neutral rating and a $1 per share price target on IsoRay, whose stock is currently trading at around $0.49 per share.
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Disclosures from H.C. Wainwright & Co., IsoRay Inc., Sept. 26, 2018
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Jason Kolbert, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of IsoRay, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of August 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of IsoRay, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did receive compensation from IsoRay, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for IsoRay, Inc. during the past 12 months.
The Firm does not make a market in IsoRay, Inc. as of the date of this research report.