sitions of matter, such as coatings, powders,
and flakes. The current Smith & Nephew
deal only applies to the use of nanocrys-
talline silver for severe wounds and burns.
This leaves open the possibility for Nucryst
to develop dressings for more minor in-
juries, say over-the-counter bandages. And
there's even potential for future products
beyond wound care. The Silcryst technology
can be used to create antimicrobial and
anti-inflammatory coatings for medical de-
vices like implants, stints, and catheters. It's
also likely that it will use its patented manu-
facturing process on other kinds of noble
metals, such as gold and platinum. Gold's
anti-inflammatory effects are a key ingredi-
ent in the treatment of ailments like arthri-
tis, while platinum is used as a cancer-fight-
ing agent. With its proven successful
technology, solid IP, and strong manage-
ment team, there's no reason to think that
Nucryst won't show impressive growth in
the coming years.
Like most young technology and med-
ical companies Nucryst has been plowing
most of its revenues from Acticoat back into
R&D, which has prevented it from achieving
overall profitability. Nucryst ended 2005
with a net loss of $2.6 million ($0.27 per
share) on revenues of $23.6 million. Its cur-
rent R&D efforts are concentrated on a
pharmaceutical product NPI 32101, which
has entered a second Phase II human clini-
cal trial this past October. NPI 32101 is a
topical cream developed to treat atopic der-
matitis, a form of eczema which affects
more than 15 million people in the U.S.
alone. The disease has no known cure, and
current treatments, such as steroid creams,
can have harmful side effects. Although NPI
32101 is a cream formulation, the versatile
free-standing silver nanocrystals could also
be incorporated into creams, gel, solutions,
or tablets for prescription drugs. In addition
to eczema this new drug might be successful
in treating many other skin conditions
marked by infection and inflammation,
such as dermatitis and acne. It may even be
useful for treating gastrointestinal diseases.
That's the "hope" anyway. There are still
some significant risks. Will these the new
products work? Will the company receive
FDA approval? Will it be cost-effective and
easily integrated into the existing healthcare
infrastructure?
And then there is other competition in
the wound management business. Compa-
nies like Johnson & Johnson [JNJ], 3M
[MMM], and Bristol-Myers Squibb [BMY]
all have a hand in the market, alongside Avi-
tar, Covalon Technologies, and Medline In-
dustries. There are a lot of different prod-
ucts out there, and each one has its
advantages for specific kinds of wounds.
Johnson & Johnson's Biopatch has had a
good deal of market success; it also has a sil-
ver-based antimicrobial dressing called Sil-
verCel. Bristol-Myers's silver-based product
is Aquacel Ag.
Despite the competition, Nucryst would
seem to have an edge in advanced antimicro-
bial dressings
--
Acticoat products can be
used on third degree burns, while most of the
other advanced dressings on the market are
only indicated for burns up to the second de-
gree. And while there has been recent hype
over biological dressings, or "artificial skin",
the products haven't fully delivered.
One last concern worth mentioning is
generic brands
--
this is the kind of market
where a large portion of products are refor-
mulated as generics, making it difficult for
companies to maintain control over pricing.
Of course, that's a concern for anyone in the
industry, not just Nucryst.
Nucryst's future is looking brighter.
While the company's new initiatives in
pharmaceuticals might require more cap-
ital and resources, they also represent a
significant opportunity. We're initiating
coverage of NCST with a Buy rating. The
company now has a market capitalization
of approximately $218 million (with
$35.9 million in cash and short-term in-
vestments). I don't believe any near-term
catalysts will cause the stock to run away
from investors in the next few months,
but today's price is right to establish an
initial position.
2
·
April 2006
© Copyright 2006 Forbes/Wolfe Nanotech Report
Nano
in the
News
Invitrogen and Signalomics agree nanotechnology diagnostics deal
Nanosphere member
Invitrogen
[IVGN] and Signalomics have agreed terms to develop nanotechnology-based laboratory approaches to cancer
diagnostics. The initial goal of the collaboration is to develop an imaging agent that can be used to identify colon carcinomas that may require sur-
gical intervention. This will be achieved by the development of nanocrystal reagents, which has the ability to enhance the identification of tumors
in in vivo patient tissue by detecting the presence of a single cancerous cell - improving the ability to excise the tumor more rapidly and completely.
NVEC: An IP Company with Questionable IP
N
Little more than a year ago, spintron-
ics-based MRAM (magnetoresistive ran-
dom access memory) was poised to revo-
lutionize computer memory technology
and portable consumer electronics.
MRAM, which uses electron spin rather
than electron charge to encode informa-
tion, was said to be the holy grail of mem-
ory, potentially combining the density of
DRAM, the speed of SRAM, and the data
integrity of Flash, resulting in 'instant on'
computers and ultra-fast, tiny, and non-
volatile portable devices. When we sur-
veyed the MRAM playing field
(see
"MRAM: And the Winner is...", Novem-
ber 2004) every major player in computer
memory technologies
--
IBM [IBM]/Infi-
neon [IFX], Hewlett-Packard [HPQ],
Samsung, Sony [SNE], and Intel [INTC],
to name a few
--
had a hand in MRAM de-
velopment. At the center of it all was a
small, Minnesota-based company, NVE
Corporation [NVEC]. NVE's intellectual
property portfolio was said to contain key
patents necessary for MRAM develop-
ment, placing the company in prime posi-
tion to reap the rewards of this up and
coming technology. NVE had licensed its
IP to Motorola [MOT] and Cypress
Semiconductor [CY], and between the
two of them NVE and others hoped to see
MRAM commercialization in the begin-
ning of 2005.
Now here we are in 2006 and we have
yet to see MRAM come to the market. Mo-
torola has spun off its MRAM business to
Freescale Semiconductor [FSL], who as of
now does not appear to be licensing NVE's
patents. Cypress, which was using NVE's
patents, has dropped out of the MRAM
game altogether. On top of all this, NVE is
facing a potential class action suit. Given
