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New Treatment Boosts Endocare Shares

Cancer: The Irvine firm announces its Cryocare System was successfully applied to a lung tumor.

September 09, 2000|From Dow Jones Newswires

Shares of Endocare Inc. jumped 13% in heavy trading Friday after the company said that its Cryocare System was used successfully for the first time in the United States to treat lung cancer in a patient.

The news surprised Wall Street analysts who were unaware that the Irvine provider of temperature-based technologies now used to treat prostate and breast cancer was working on a way to use its cryoablation procedure to treat lung cancer, said Robinson-Humphrey analyst Robin Swanberg.

In a CNBC interview Friday, Chief Executive Paul Mikus said the procedure, which uses a probe that freezes tumors, has been used successfully for prostate cancer and breast cancer.

"The application [to] lung cancer now really rounds out the top three cancers in the world," he said.

Cancer patients are treated on an outpatient basis, he said, as the probe targets, freezes and destroys tumors without affecting the surrounding area.

Endocare shares gained $2.25 Friday to close at $19.69 a share in Nasdaq trading. At one point during the day, the price hit $23 a share, a 52-week high for the stock. Almost 2.6 million shares changed hands, nearly 27 times the daily average of 95,600 over the previous three months.

"We did not know about lung cancer, and lung cancer is the largest patient population," Swanberg said. "It adds significantly to their market opportunity. Even though it is one patient and they have to run a trial to publish the data, it is significant."

In a news release issued Friday, Endocare officials said that doctors at Barbara Ann Carmines Cancer Institute in Detroit performed a targeted cryoablation procedure to freeze a lung tumor in a 37-year-old man.

The procedure was noninvasive. Doctors used ultrasound visualization to locate the tumor and placed small cryoprobes through small chest incisions to freeze and destroy targeted cancer cells.

This year, more than 164,000 people are expected to be diagnosed with lung cancer. The disease is expected to kill 157,000 people.

"We have five-year data for prostate cancer, which shows 85% disease-free rates, and this type of data is transferable as we now attack other solid body tumors," Mikus said.

Though Endocare still is losing money, analysts predict the company will turn profitable by late next year or early 2002.

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