iCAD Inc.

For other uses, see ICAD (disambiguation).

iCAD Inc. (NASDAQ: ICAD), headquartered in Nashua, New Hampshire,[1] is a medical-device manufacturer. Having acquired another device-maker, Xoft, at the end of 2010, iCAD almost immediately faced a case of mistaken consequences in some Xoft test-study patients.

History

iCad originally focused on image-analysis products designed to help radiologists and other health-care providers detect cancers early. In 2010, in the face of flagging results and stock performance, it acquired Xoft's Axxent system which delivers radiation therapy directly to cancer sites with minimal radiation exposure to surrounding healthy tissue, according to the company. The system was approved in the U.S. for early-stage breast cancer, endometrial cancer and skin cancer, as well as other varieties where radiation therapy is indicated, the initial report on the acquisition stated.[2] The shield used in the system had been cleared by the Food and Drug Administration (FDA) in June 2009 in an abbreviated process used for devices that are considered equivalent to products already on the market. That process, known as 510(k), takes less time than the procedure used to approve a new device, and it generally does not require tests on humans."[3]

Tungsten particles left in test subjects

Within a week of iCAD's closing on the Xoft acquisition, the Axxent FlexiShield Mini, used with its portable radiation device, the Axxent Electronic Brachytherapy System, was found to have left test subjects "riddled ... with hundreds of tiny particles of the heavy metal tungsten in their breast tissue and chest muscles." Twenty-seven of the cases occurred at Hoag Memorial Hospital Presbyterian in Newport Beach, Orange County, California. Eleven of those women have had mammograms, and all 11 showed tungsten. Two other women were treated in a study at Karmanos-Crittenton Cancer Center in Rochester Hills, Michigan. Full implications of the mistake had not been determined as of mid-March, 2011, but the company and the FDA had executed a recall on the FlexiShield Mini and were investigating.[3]

Swedish Covenant Hospital in Chicago offered Xoft’s Axxent Electronic Brachytherapy System treatment,[4] beginning in 2008. The hospital did not participate in the study in which the Axxent FlexiShield Mini — the device that has been recalled — was used in conjunction with intraoperative breast irradiation, nor has the hospital used the Axxent FlexiShield Mini on any patients.

Starting in February, 2011, a series of parallel product liability suits have been filed in Orange Country Superior Court, totaling ten Jane Doe complainants and a number of John Doe spouses by August, 2011, per the September 30, 2011 10-Q filing by the company.[5] The first and later of the plaintiffs, who consented to the experimental treatment, were represented by lawyer Jeff Milman.[6]

In July 2011, Zach's Investment Research initiated coverage of the stock with a neutral rating and "positive on iCAD's fundamentals" but said "we believe caution is warranted until there is more clarity on the potential and likely liability related to a recently filed product liability lawsuit".[7] While the company reported "strong revenue growth" for the first nine months of 2011, it also reported lawsuit and other legal expenses of $1.5 million as a component of a "Non GAAP Adjusted EBITDA" of negative $6.8 million.[8]

In January 2013, an Inflection Point Investing stock analyst wrote in part, under "Risks": "Potential legal liability for a third-party related recall for a Xoft accessory product remains a small concern. We do not feel that this risk is material or anything to dwell upon."[9]

Reimbursement rates raised

In November, 2012, the company's products were granted a more-than-doubled reimbursement rate from U.S. Centers for Medicare & Medicaid Services "for the Company’s Xoft® Axxent® Electronic Brachytherapy System®".[10] The news led to a spike in stock volume and the price began to move, more than doubling by mid-January 2013.[11] At that time, noting the move already made by the stock, a stock analyst reviewed the company's history and situation. With standard caveats, the analyst wrote that recent developments "could cause shares to double in a year and potentially triple over the next 24 months".[9]

Management

CEO, Ken Ferry[9]

References

  1. "icad, Inc. ... At A Glance", Forbes. Retrieved 2011-03-24.
  2. Jarzemsky, Matt, "ICad To Acquire Device Maker Xoft For $13.1M In Cash And Stock", Dow Jones Newswires, December 16, 2010 1:58 P.M. ET. Retrieved 2011-03-21.
  3. 1 2 Grady, Denise, "Riddled With Metal by Mistake in a Study", The New York Times, March 21, 2011 (March 22, 2011 p. D5 NY ed.). Retrieved 2011-03-21.
  4. "Axxent Electronic Brachytherapy". Swedish Covenant Hospital. Retrieved 2011-03-21.
  5. "ICAD INC - FORM 10-Q ...", company U.S. Securities and Exchange Commission filing via faqs.org, November 10, 2011. Retrieved 2011-11-23.
  6. Peters, Sarah, "Hoag patient sues after experimental therapy", Daily Pilot, March 9, 2011 7:59 pm. Retrieved 2011-11-23.
  7. Marckx, Brian, CFA, "iCAD, Inc: Initiating Coverage at Neutral", Zacks.com, July 13, 2011. Retrieved 2011-11-23.
  8. "iCAD Reports Third Quarter Financial Results", press release via MarketWatch, Oct. 26, 2011, 4:49 pm EDT. Retrieved 2011-11-23.
  9. 1 2 3 Inflection Point Investing LLC, "Multiple Drivers Spur A Significant Inflection Point For iCAD", Seeking Alpha, January 15, 2013. Analysis by unnamed individual at IPI who was "long" (owned shares in) iCAD at time of writing. Retrieved 2013-01-17.
  10. "iCAD Reports Significantly Improved Medicare Payment for Intraoperative Radiation Therapy" (press release), via finance.yahoo.com, November 5, 2012. Retrieved 2013-01-17.
  11. iCAD page, Google Finance. Retrieved 2013-01-17.

External links

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