Neoprobe had record device sales in 2008; expects exciting 2009

Neoprobe Corp. lost about the same amount of money last year as it did in 2007 — $5.2 million, or 8 cents a diluted share.

But the Dublin, Ohio, company that is spending a lot of money to develop cancer detection and intervention technologies also reported record revenues from medical device sales in 2008 — $7.9 million, up 11 percent from $7.1 million in 2007.

Neoprobe makes detector probes and accessories that enable surgeons to map and biopsy the lymph nodes of patients who have breast cancer or melanoma, a certain type of skin cancer.

The company calls these systems “gamma detection devices” because they use intravenous tracing agents containing gamma radiation to locate the lymph nodes. Solid-tumor cancers such as breast cancer often spread through the lymphatic system — the network of channels and filters that make up the body’s main defense line against disease, according to a description at Neoprobe’s Web site.

Neoprobe’s gamma detection devices enable surgeons to find a patient’s lymph nodes and determine whether they contain cancer cells before removing them.

Through a subsidiary, Neoprobe also makes a line of blood flow measurement products.

But it’s the investigational products Neoprobe is working on that seemed to interest investors during a Wednesday conference call:

• Lymphoseek – A proprietary tracing agent that could be used with Neoprobe’s gamma detection devices.
• RIGScan CR – A hand-held gamma radiation probe, targeting agents and patented surgical methods that enable surgeons to find formerly undetectable tumor deposits and completely remove them.
• ACT — “Activated Cellular Therapy” that can find special lymph node cells, that when removed from the body and multiplied, can be re-injected to help a patient fight disease.

Last year, Neoprobe introduced an enhanced version of its gamma detection system and a wireless version of its gamma detection probe. The company also designed or began to enroll patients in Phase 3 clinical studies of Lymphoseek, and worked with U.S. and European regulators to develop a regulatory pathway and Phase 3 trial for RIGScan CR.

It received the final $6 million installment of a $13 million investment from Platinum-Montaur Life Sciences LLC in New York after meeting research milestones.

This year, the company plans to complete the Lymphoseek trials and to harmonize plans for U.S. and European regulatory approval and Phase 3 studies for RIGScan, Neoprobe’s president and chief executive, David Bupp, told investors on the conference call.

Lymphoseek likely will not be launched commercially until at least 2011, Bupp said.

Neoprobe already has the $4 million in cash it likely will need to get through the final Lymphoseek trials, Brent Larson, the company’s chief financial officer, told investors. Including agreements for more cash investments and potential milestone payments, Neoprobe probably won’t need additional financing in the next 18 months, Larson said.

“In summation, Neoprobe is poised to have a very successful year in 2009,” Bupp said at the end of the investor call. “It’s going to be a challenging one with the current economic conditions. But our gamma device business continues to perform well, and we expect the first quarter to reflect positive results.

“So on an overall basis, the prospects for Neoprobe have never been stronger or more exciting,” he said.

Neoprobe shares rose 1 cent to 54 cents Wednesday. The shares trade among brokers through NASDAQ’s Over-the-Counter Bulletin Board system.