In late January of 2015 I wrote about a company with an incredible product. The company was named Miraculins and at the time they had a $9 million dollar market cap. Their primary product was a device for measuring blood sugar levels without taking blood.
Their Scout DS (for Diabetic Screen) unit cost over $42.5 million to develop but is non-invasive and user-friendly. It can be used successfully by non-medical personnel. It doesn't require the person being tested to have fasted and it's both lightweight and portable. Best of all, the test takes a mere 90 seconds for results.
Management stumbled, the stock crashed and 95% of the value was destroyed. Today the company is back with adult management who are not on their first rodeo. With the fresh management team, they have a new name and are now called Luminor Medical Technologies Inc. (LMT:TSX.V). Good thing because I could never figure out how to pronounce Miraculins.
The hand held portable device has been thoroughly tested in 20 clinical studies and with over 15,000 patients. It works. Thirty-three countries have approved the device. The Scout DS device uses light to determine glucose levels through the skin.
The World Health Organization (WHO) reported 1.5 million deaths due to diabetes in the last year for which they have data, and another 2.2 million deaths annually are caused by pre-diabetes.
Stockhouse did a great interview on the company and this I quote from their piece according to the World Health Organization:
The starting point for living well with diabetes is an early diagnosisóthe longer a person lives with undiagnosed and untreated diabetes, the worse their health outcomes are likely to be. Easy access to basic diagnostics, such as blood glucose testing, should therefore be available in primary healthcare settings.
The primary issue with the Scout DS is not if it works or if it is needed, the issue is how to commercialize the product. Prior management failed not only at marketing the product correctly, they totally blew the cost structure for making the device.
The new President and CEO of Luminor has been through the mill before. He ran a Canadian consulting group for the support of medical start up groups. He also worked for Merck Canada as a Vice President of a division with $600 million in annual revenue. He not only knows how to market the device, he knows how to manufacture it in a cost effective way. His team believes they can reduce the price of producing the device by 2/3 of the prior cost. They plan on selling the devices with a 75% margin.
The low hanging fruit for the company would be to enter into some kind of licensing and manufacturing agreement with countries with large populations and substandard current medical care. China and India immediately come to mind. The WHO estimates that less than 50% of the population of India has access to current diabetes testing. A simple and low cost device for measuring blood sugar would literally be a lifesaver for the country.
Luminor has back of the envelope figures showing a market potential for 100,000 Scout DS units in China where they are aiming for some sort of licensing agreement. India has additional potential for 20,000 Scout DS units. In the US, 50 million Americans live with pre-diabetes and don't know it.
To profit in the stock market, you need only to invest in the irrational behavior of other punters. If the company had a $9 million market cap with substandard management, how rational is it to have only a $3.6 million market cap with someone leading the company who is used to running medical divisions with $600 million in annual revenues?
I understand once burned investors having reservations but when I saw the market cap and read about the qualifications of the new team, I leapt onto the stock. This is a gimmie. All they need to do is sign a deal with either India or China and the stock is going to run a bunch higher. This has ten-bagger potential easily. And the new management guys are well aware they are under the gun. You are not going to have to wait years to see if they have succeeded or not.
Luminor is an advertiser. I participated in their private placement and I have bought shares in the open market. Naturally I am biased. Do your own due diligence.
Luminor Medical Technologies Inc.
LMT-V $0.40 (Feb 05, 2017)
MCUIF-OTCBB 9.2 million shares
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Luminor Medical Technologies Inc. Luminor Medical Technologies Inc. is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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