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Coverage Initiated on Developer of Brachytherapy Products for Cancer Treatment
Research Report

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H.C. Wainwright & Co. analyst Jason Kolbert provided the rationale for investment in this company.

In an Aug. 20 research note, Kolbert reported that H.C. Wainwright & Co. initiated coverage on IsoRay Inc. (ISR:NYSE.MKT) after it recently received product approval for a new indication. The firm has a Neutral rating and a $1 per share target price on the biotech, whose current share price is around $0.54 per share.

In July, the FDA approved the use of GammaTile in the treatment of recurrent brain cancer. It is a collagen wafer containing IsoRay's cesium-131 (Cs-131) seeds, which is used in brachytherapy, a treatment form in which a radioactive source is placed in or near a tumor. GT Medical Technologies, a private company, manufactures the product. "GammaTile could be big," Kolbert wrote.

He pointed out the use of GammaTile could become the new standard of care for patients after surgical resection of brain tumors. This is because few treatment options exist in the space and, thus, the market less competitive. It's also because the product, "in the right cases, should be capable of achieving superior control of tumor growth versus other modalities with less damage to healthy tissue," he added.

The use of GammaTile in the recurrent brain tumor indication "has the potential to become an important new source of revenue for IsoRay," highlighted Kolbert, especially if sales of IsoRay's Cs-131 seeds for use in prostate cancer are any indication. Last year they accounted for much of IsoRay's 2017 revenues of $4.7 million and are anticipated to help the company generate $5.8 million in 2018. "We estimate that IsoRay today has approximately a 5% share of the brachytherapy market and believe that number can rise with time," especially with its internal sales force now in place.

Also, in terms of potential market size for GammaTile use in the new indication, "primary and secondary brain cancers represent up to 225,000 patients, most of whom are resected," Kolbert relayed.

He noted that Cs-131, with its short half-life and high energy output, could become a "best-in-class" radiation source and preferable over, say, iodine-125 and palladium-103. "Cs-131's features translate into a product able to deliver a higher and more uniform dose of radiation to the targeted tissue in a shorter time period." IsoRay is the only company that sells Cs-131.

In conclusion, Kolbert said, Wainwright is "taking a wait-and-see approach until the revenue prospects for the company become more visible and we have greater clarity around the commercial plans for GammaTile."


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from H.C. Wainwright & Co., IsoRay Inc., Initiating Coverage, August 20, 2018

I, Jason Kolbert, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst's household has a financial interest in the securities of IsoRay, Inc. (including, without limitation, any option, right, warrant, future, long or short position).

As of July 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of IsoRay, Inc.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did receive compensation from IsoRay, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for IsoRay, Inc. during the past 12 months.

The Firm does not make a market in IsoRay, Inc. as of the date of this research report.

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