Ready to Shake Up the Spinal Industry (SYK, BRTX, MDT)
Small Cap Network
Ready to Shake Up the Spinal Industry (SYK, BRTX, MDT)

Article by James E. Brumley, Small Cap Network


Look out Medtronic (NYSE:MDT), and Stryker Corporation (NYSE:SYK), you're on notice. Your dominance in the spinal surgery and implant market is about to be threatened by BioRestorative Therapies, Inc. (OTCBB:BRTX)... a company that is developing a treatment option for damaged spinal discs that is not only cheaper than surgical alternatives (like fusions or implants), but one that is also less invasive.

Though few would disagree that the current spinal therapy arena's current champion is Medtronic - while Stryker is a major contender - it's an arena that perhaps even SYK and MDT would agree isn't a well defined one. Some back-pain sufferers avoid a surgical procedure because they fear it could cause more suffering, while others forego treatment because insurers won't cover the expense. But, based on what information we do have, the global spinal market is worth about $10 billion per year, $3.2 billion of which was driven by Medtronic products last year. Stryker's spine-driven revenue reached about $1.4 billion. Point being, there's opportunity in the market.

But what hope can newcomer BioRestorative Therapies have in competing with the proverbial 'big boys'? Much more than you might think.

BRTX is not a medical device company, but a stem-cell therapy developer. Its brtxDISC(tm) Program (disc implanted stem cells) - technically ready to enter Phase 1 trials but possibly a candidate to skip directly to Phase 2 - provides relief to bulging and herniated discs using a patients own stem cells, and BioRestorative Therapies' proprietary cell delivery device.

More important, the initial testing of the approach shows great promise. Of the 38 patients who underwent a brtxDISC treatment in preclinical testing, only 3 of them ended up needing surgery after three years.

The real story here, however, ultimately (though understandably) becomes one of money. That's also where BRTX really starts to shine.

Spinal fusions such as the ones made possible by Medtronics' Infuse bone graft technology or even Stryker Corporation's much simpler Reflex spine-plating system can cost up to $100,000 to perform (with $75,000 being at the low end of the typical spine fusion procedure). Disc replacements can cost between $35,000 and $50,000 to perform, while outright discectomies can range in cost from $20,000 to $50,000. And, all of these processes can (and likely will) require rehabilitation costs exceeding six figures.

BioRestorative Therapies' brtxDISC stem cell therapy, however, is a viable alternative to all three procedures, and only costs $18,000 to complete; rehab costs are practically non-existent with the brtxDISC procedure too.

Given the dollar figures, the number of people in the United States that elect to undergo a spinal procedure, and the number of people that elect NOT to undergo a spinal procedure even though they probably should, BRTX believes its market size in U.S. alone is one million patients per year. Even thinking conservatively, that's a multi-billion opportunity - not bad for a $16 million company.

Amazingly, brtxDISC isn't even the company's only project. It's also working on two other stem-cell developments. One of them is Thermostem - a treatment that facilitates the creation of brown fat in the human body, which is known to maintain and regulate metabolism. The technology could potentially be used as a weight-management tool, and perhaps even as a treatment for diabetes.

The other project is brtx-C Cosmetic, which provides an anti-aging result that could be useful within the cosmetic industry.

As for near-term catalysts that could really drive BRTX shares though, all eyes are on BioRestorative Therapies' work in the spinal arena. The company plans to request a new drug application sometime in the second half of this year. That's going to get the market's attention, though savvy traders may want to take a closer look at the stock now, before the rest of the market starts to nibble... or gulp.


For more on BioRestorative Therapies, Inc., visit the exclusive SCN research report here.





BioRestorative Therapies: A Stem Cell Biotechnology Company