Monday, January 26, 2015

BioRestorative Therapies is the Stem Cell Industry's Best-Kept Secret (CUR, STEM, BRTX)

When an investor thinks of spinal-related stem cell stocks, usually a name like Neuralstem, Inc (NYSEMKT: CUR) or StemCells Inc (NASDAQ: STEM) comes to mind. And well they should. STEM has logged some amazing breakthroughs in the field of spinal cord repair, while CUR has done the same. Not all back problems are spinal cord related though. In fact, most back problems - and therefore the most opportunity - are bone and disc related problems. That's where a young gun like BioRestorative Therapies (OTCBB: BRTX) can step in and make stem cell waves. BRTX has developed an approach to rejuvenate and revive failing spinal discs, potentially ending pain for millions of back-pain sufferers, and circumventing expensive spinal surgeries that are in increasing burden on insurance companies.

The program is called brtxDISC... short for 'Disc Implanted Stem Cells. It's one of three stem cell programs BioRestorative Therapies is working on, though arguably the company's flagship development. Simply put, the brtxDISC technology injects a patient's own healthy cells into a damaged or herniated disc so that disc can be repaired.

As impressive as the technology is, just as impressive and equally important to the opportunity is that BRTX has developed a proprietary stem cell delivery device. Not only is the injection device critical to the success of the stem cell program, but by owning rights to the mechanics of the injection, the company can fend off copycat solutions.

To be fair, it may not be as sexy as the stem cell work being done by StemCells Inc. or Neuralstem, Inc. Then again, by simplifying the target, the odds of success - and approval - are considerably greater for BRTX shareholders. The potential market size may also be bigger.

Every year in the United States alone, approximately 300,000 spinal fusion surgeries are performed. The brtxDISC procedure could e a viable alternative for many of them. Ditto for the 200,000 discectomies and disc replacements performed in the U.S. every year.

The numbers involved aren't chump-change either. Spinal fusions cost around $100,000 for the whole shebang, while discectomies can cost around $$35,000 per procedure.  Disc replacement surgery costs around $40,000 and don't always work all that well. The total cost of the brtxDISC procedure should be around $18,000 if approved by the FDA, and there's no need for the physical therapy that's always required by surgical procedures.

Bottom line: If BioRestorative Therapies can capture just 5% of those spinal fusions, discectomies, and disc replacements that are currently being done every year in the Unites States, that's 25,000 procedures. At $18,000 a pop, that's a $450 million opportunity. BRTX won't get there overnight, but it's not an amount that's not worth putting on the radar.

And here's the really compelling part about a position in the company... brtxDISC isn't the only R&D work it's doing. The other two projects could be just as fruitful.

Time to take a good, long look.

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