Jeremy L. Dillon
RW Monitor
8/7/2015
Perma-Fix Medical does not expect to submit its techneticum-99m production technology for approval by the Food and Drug Administration this year, Lou Centofanti, CEO of parent company Perma-Fix Environmental Services, said this week, but management does anticipate completing the final scale-up of the production technology to a six-curie limit by the end of 2015. Once the finalized design is finished and tested, Perma-Fix anticipates submitting for FDA approval sometime in the middle of 2016, Centofanti said.
Earlier this year, Perma-Fix said it needed to reconfigure its production process after realizing the market demand called for a larger design that could deliver greater amounts of Tc-99m. According to the company, the latest scaled-up design can withstand up to four curies of radiation while still producing usable doses of Tc-99m. With Canada set in 2016 to stop government spending on the National Research Universal (NRU) reactor, one of the world’s largest suppliers of molybdenum-99 and technetium-99m, the medical isotope industry expects a shortage in the market in the coming years, opening a potentially lucrative opportunity to satisfy the need for the isotope used in millions of procedures annually.
Despite the delay in submitting the necessary regulatory paperwork, Perma-Fix believes it has positioned itself to take over 40 percent to 60 percent of the Tc-99m market, Centofanti said. Analysts place that market at revenue between $400 million and $600 million a year in the United States and another $500 million for the rest of the world. “We are confident that we can focus on a very large fraction that,” Centofanti said. “With a six-curie unit, we are very confident we can go after somewhere between 40 to 60% of the existing market, a little more in Europe and a little less in the US. Nuclear pharmacies are driven by price, and if you provide them two units that are cost competitive with one unit, they would go with the cheaper route. In the end, we have a market we can focus on that would extremely competitive in at six curies. The potential here is mind-boggling.”
Perma-Fix Achieves Net Income for Second Quarter
Perma-Fix Environmental Services announced this week a slight net income of $613,000 for the second quarter of 2015, compared to an operating loss of $2.1 million for the second quarter of 2014. Revenue for the second quarter of 2015 was $16.4 million, versus $12.7 million for the same period last year, while gross profit was up to $4 million versus $1.6 million for the second quarter of 2014. Much of the improved financial results, Centofanti said, could be traced to improvements within the nuclear waste management specialist’s treatment and services segments. “We are pleased to report continued improvement in our financial results, as evidenced by a 29% increase in revenue and a 159% increase in our gross profit,” Centofanti said in a statement. “Revenue in our treatment segment increased 18% to $11.1 million due to higher waste volume, while revenue in our services segment increased 61.5% to $5.3 million due to new contracts that have been awarded.”
Perma-Fix expects to do even better for the full 2015 results. “I’d also add we are far from satisfied given the vast landscape of opportunities we are seeing with our unique resources at our disposal,” Centofanti said. “Due to the timing of shipments, some of the revenue we had expected in the second quarter was delayed and came in during the early part of the third quarter. Nevertheless, our sales pipeline continues to improve. We anticipate government spending to increase as we approach the government’s yearend. And we are off to a strong start in the third quarter, and are extremely encouraged with the outlook for the second half of 2015.”
