Advanced Medical Isotope Corporation

Advanced Medical Isotope Corporation (OTC: ADMD) is engaged in the development of advanced production systems and processes for bringing previously unavailable medical isotopes to the marketplace and advancing systems for local product production. The field of nuclear medicine has routinely utilized radioisotopes in the diagnosis of disease while new processes are being pioneered for the targeted treatment of diseases such as cancer in preference to surgical techniques. Advanced Medical Isotopes Corporation products support the accessibility to these less invasive therapeutic processes by advancing systems for lower cost production and improving supply availability of medical isotopes to hospitals and clinical treatment centers.

Advanced Medical Isotope Corporation has recently licensed, from a US National Laboratory, the rights to an advanced design compact system suitable for production of a series of medical radioisotopes used in advanced medical imaging diagnostic processes, such as Positron Emission Tomography or PET machines and recent advances in therapy processes used to treat life-threatening diseases, such as prostate cancer and rheumatoid arthritis. AMIC is in discussion on additional technologies to expand our portfolio of offered products and services.

The advent of the compact generators for isotope production has allowed AMIC to pursue a business model for distribution for these compact production machines to regional hospitals, treatment centers and clinics, thus making the short-lived and generally preferred isotopes available to marketplaces which were previously unavailable or cost prohibitive to address.

An example of such a product is the isotope used in PET machines, a relatively new development in advanced diagnostic imaging devices. Currently the standard isotope for the PET machine is Fluorine 18, which due to radioactive decay, loses half of its useful material (50% loss) every 1.8 hours (radioactive half-life ). To supply a PET machine for use within an eight hour window, the manufacturer must produce approximately 30 times the quantity needed for an effective product following transit and preparation time of only 8 or 9 hours. With the AMIC (symbol ADMD) machine, production could be local to the PET machine thus reducing the enormous in process losses of product produced at university or government reactors.

Additionally, the AMIC machine allows consideration of Nitrogen 13, a highly energetic and effective isotope, for this application. Currently, use of Nitrogen 13 is not practical due to its half-life of only 10 minutes, as less than 0.1% of the product remains after 2 hours. With the AMIC machine, production of the isotope can be accomplished at the diagnostic facility allowing use of previously impractical but preferred diagnostic and imaging isotopes.

Division Purchase

Advanced Medical Isotopes announced the conclusion of the purchase of the Life Sciences Division from Isonics in August. The company is continuing with the same source of quality supply as previously shipped.

Within the life sciences industry, the utility of stable and radioisotopes is far-reaching. Isonics recognized the broad market potential of this industry and responded by executing a versatile, multitiered development program to supply isotopes for use in life science applications.

There are a variety of stable isotopes that are commonly used in medical imaging and therapy applications. In their enriched form, or when converted to a specific radioisotope in a cyclotron or nuclear reactor, isotopes are incorporated into chemical compounds that concentrate into specific parts of the body following implantation, injection, inhalation, or ingestion.

The most common of these applications is cancer imaging and treatment applications, such as brachytherapy for which iodine-125 and palladium-103 are used. Other applications include carbon-14 and phosphorus-32 or -33, which are used in medical research, as well as oxygen-18, which is used in diagnostic imaging. Isonics offers a host of isotopes, which are used in various applications and services.

Oxygen 18

In August, Advanced Medical Isotopes initiated shipments to leading universities and several international hospitals of Oxygen-18, a key ingredient for the production of Fluorine-18. The increasing usage of Fluorine-18 is essential to the expanding utilization of the development of positron emission tomography (PET). The growing usage of PET affords the ability to evaluate the metabolic and functional activity of cells, affording great promise for the diagnosis of many major diseases, including oncologic imaging for a variety of cancers, brain tumors, heart disease and Alzheimers.

The global market for oxygen-18 is approximately $25-30 million per year and has been growing at approximately 20% annually. The principal drivers of this market are the 600,000 PET studies conducted annually in the U.S., which are up more than fourfold from the 145,000 that were performed four years ago. The largest application of PET studies is in oncology, followed by cardiac research, and new drug developments. The market for PET is currently over $1 billion, and is expected to grow by approximately 25% annually.

Market Opportunity

The Marketplace

Over the past few decades, isotopes have become vital tools for use in medicine, industry, and scientific research. Isotopes, including both radioisotopes and stable isotopes, play a particularly important role in medical diagnosis, treatment, and research. Currently, more than 12 million nuclear medicine procedures are performed each year in the United States, and approximately one-third of all patients admitted to U.S. hospitals undergo at least one medical procedure that employs the use of medical isotopes.

Diagnostic radioisotopes are used for imaging internal organs. The advantage over conventional radiology is that imaging with radioisotopes reveals organ function and structure, which provides additional data for a more accurate diagnosis and early detection of abnormalities. Therapeutic isotopes have proven effective in treating cancer and other illnesses by cell-directed localized radiation therapy, substantially reducing the adverse side effects of chemotherapy or radiation. Current medical applications involve the diagnosis and treatment of three major disease classes: cancer, vascular disease, and arthritis.

Government projections indicate the growth rate in medical isotope use will be significant over the next 20 years. The US diagnostic radiopharmaceuticals market is expected to grow between 7% - 14% and range from $2.7 billion to $18.7 billion by 2020. The therapeutic radiopharmaceutical market is expected to grow between 7% - 16% and range from $244 million to $1.11 billion by 2020. The major contributor to this strong growth is the availability of new radiopharmaceuticals. Industry analysts project an aggressive growth predicting revenues at the high end of the federal estimates.

Recently, industry analysts have predicted an explosive growth in the use of therapeutic radiopharmaceuticals, employing sophisticated cancer targeting delivery systems. In a recent article 'New promise for therapeutic radiopharmaceuticals', author Marvin Burns projected that the market for therapeutic radiopharmaceuticals would reach $1.9 billion by 2012, with rapid growth thereafter. Burns identified a dozen firms planning to release new therapeutic products to the marketplace between 2008 and 2010 to treat a variety of cancers, including:

• Lymphoma
• Lung Cancer
• Prostate Cancer
• Breast Cancer
• Colon Cancer
• Pancreatic Cancer
• Myeloma
• Endocrine Cancer
• Liver Cancer
• Skeletal Cancer / Sarcoma
• Brain Cancer
• Melanoma
• Ovarian Cancer
• Multiple Solid Tumors

The entry of new therapeutic radiopharmaceuticals in the mainstream will stimulate the development of a large array of related products targeted to many different types of tumors.

Revenues for the production of isotopes are estimated at 17-20% of the radiopharmaceutical revenues. Based on the projections for radiopharmaceuticals, revenues to isotope producers are predicted to range between $600 million and $4 billion by 2020. AMIC believes that their unique, compact generator systems and expected broad portfolio of products will uniquely position AMIC to capture a significant position in this growth marketplace.

Today, medical isotopes are generally produced in government or university nuclear reactors, particle accelerators, or extracted from existing radioactive materials. Once irradiated, the 'parent' materials are shipped for chemical processing to extract the desired isotopes and discard the non-desired waste products. The isotopes are then combined with a delivery device or carrier material for use in the intended medical procedure.

Radioactive isotopes have a very limited shelf life. Processing and transport from a reactor or accelerator facility necessitates the manufacture of vastly larger quantities of isotopes than are needed for diagnostic procedure or an effective therapeutic dose. AMIC's plan for use of advanced technology compact production systems at local hospitals and treatment centers provides for local production at the facility, minimizing transport losses. Additionally, their distributed production systems now make the previously impractical, highly desired, short-lived isotopes available for diagnostic and therapeutic applications.

The AMIC compact generator systems provide a potential solution to a developing supply problem. Security delays and blockages in the international shipment of medical isotopes have been rendering diagnostic and cancer treatment products useless. Since the U.S. imports 95% of the nation's medical isotopes, this issue poses significant risk to US medical treatment centers.

Factors Accelerating Market Growth

Although analysts have projected a strong growth for medical isotope use, the factors considering demographics and reliability of supply issues indicate these projections may be conservative.

Cancer statistics indicate the likelihood of contracting a cancer related illness dramatically rises with age. With the 'graying' of America, the demand for advanced cancer therapies is expected to grow disproportionately to simple population growth. American life expectancy is now around 77 years, versus 55 when Social Security was created in 1935. Today, almost 14% of Americans are 65 or older, and that figure will jump to 25% by 2025. This graying of America and the prolongation of the average life-expectancy has created a thriving marketplace for several industries; principally among them is healthcare and wellness.

An unanticipated driving force for domestic radioisotope production and supply is the War on Terror. AMIC expects that our approach of distributed compact machines to regional centers throughout the US will fill this unmet demand for isotopes though regional domestic production, thus avoiding the product losses from shipping delays and the security issues of shipping radioactive materials across international borderlines.

Competition

AMIC is developing a portfolio of isotope products suitable for manufacture using these advanced technology devices. Although several of these isotopes are currently available through commercial suppliers or the U.S. government through the national laboratory system, AMIC expects to be able to produce these products at less cost and with minimum losses using the compact generators and a distributed production strategy. ADMD expects to capture a significant share of the radioactive isotope marketplace by resolving the issues associated with reliability and efficiency of supply.

Disclosure: Pentony Enterprises LLC has been compensated five thousand dollars and one hundred thousand restricted shares directly from the company for profile coverage. Pentony Enterprises LLC is not a registered investment adviser or broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.

Management

William J. StokesChief Executive Officer

The Chief Executive Officer is William J. Stokes, with over 30 years experience in the business management of nuclear industry services firms and development of isotope and isotope production facilities.

James C. KatzaroffPresident

James C. Katzaroff is a co-founder and President with an extensive background in technology ventures, business leadership, business finance, and corporate development.

Robert E. Schenter, Ph.D.Chief Science Officer

Robert E. Schenter, Ph.D., a recognized authority on isotope production for the treatment and diagnosis of major diseases, is AMIC's Chief Science Officer and Scientific Advisory Board Chairman. He is active with several Cancer Foundations, an American Nuclear Society Fellow, a member of the Nuclear Regulatory Commission's Advisory Committee on the medical uses of Isotopes, and has testified before Congress on Medical Isotope Supply and Applications.

James MadsenBusiness Systems Manager

James Madsen is AMIC's Business Systems Manager with over 40 years experience in business management and financial planning systems for nuclear industry specialty firms, including the startup and company management of a firm introducing a new brachytherapy seed for prostate cancer.

Peter GibbonsTechnology Engineering Manager

Peter Gibbons is AMIC's Technology Engineering Manager with over 28 years experience in systems engineering, remote systems design and test engineering, and maintenance of mechanical systems operating in complex nuclear environments.

Disclosure: Pentony Enterprises LLC has been compensated five thousand dollars and one hundred thousand restricted shares directly from the company for profile coverage. Pentony Enterprises LLC is not a registered investment adviser or broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.

Disclosure: Pentony Enterprises LLC has been compensated five thousand dollars and one hundred thousand restricted shares directly from the company for profile coverage. Pentony Enterprises LLC is not a registered investment adviser or broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.

Contact Info

Advanced Medical Isotope Corporation

6208 W. Okanogan Ave.
Kennewick, WA 99336

Phone:

(509) 736-4000

Fax:

(509) 736-4007

Email:

sales@isotopia.us

Website:

www.advancedmedicalisotopes.com

Disclosure: Pentony Enterprises LLC has been compensated five thousand dollars and one hundred thousand restricted shares directly from the company for profile coverage. Pentony Enterprises LLC is not a registered investment adviser or broker/dealer. Pentony Enterprises LLC makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.