Protectus Medical, Inc. (PTMD) is kind of a corny name….get it?  Protect Us!

But, it does fit in very nicely with their mission and their main product: a self-sheathing safety syringe.

PTMD is a long-term project, IMHO. The company came public in September backed by a strong PR program.  I mean, they were taking ads out in Barron’s….for goodness sake.  The stock came out at one dollar traded up to $1.70 on very strong volume and it has been a long, slow slide ever since.   Sellers have dominated and the stock has gotten knocked down to one-fifth of its high.

Does that mean that we should forget about them?  Are they done?  I don’t think so.

I did lots of research, called the IR people, read boring 10-Q’s and came out of it with an upbeat opinion of PTMD.  But, let’s talk about the negatives first:

Going Concern: Like every under-capitalized company, PTMD has got cash flow problems.  I take it for granted that they are looking for capital and that was confirmed by the IR people.

No manufacturing and No revenues: When I first did an alert on PTMD, it appeared that they were a great deal closer to actually manufacturing their “revolutionary device”.  It is still going to be some time in 2010 before they have units ready for sale.  The company is looking for both domestic and overseas production for their syringes.

Sellers are in control: It appears from PTMD’s chart that sellers are firmly in control and the downward pressure on the stock price is unmistakable!  When will the stock reach “sellers exhaustion” is difficult to guess (but it could be soon, IMO)

Now the positives:

The product: My sister is a registered nurse and, ironically, we have had conversations about needle sticks.  It is one of the most worrisome aspect of any medical professional’s job.  I can not speak to the efficacy of their product.  All I know is what I read on their site.  PTMD has taken steps to safeguard their technology both domestically and globally with an aggressive patent program.  Needle sticks is a problem in the medical profession and PTMD appears to have a viable product.  They have a video on their site showing the syringe in action(and how it compares with others on the market):  PTMD Syringe Very interesting viewing!

“Hospitals must take the safest device” : During my conversation with the IR people, they said something that I wrote down about hospitals taking the safest device.  What PTMD is offering, once it is on the market, could “sell like hotcakes”.   Frost and Sullivan, a market research firm, states that:

“Safety issues concerning regular syringes are driving the adoption of retractable syringes across the world. For instance, nearly 5.6 million healthcare workers in the U.S. suffer as many as 800,000 sharps injuries-mostly with needlesticks-each year. At this rate, around 2,100 health care professionals are likely to incur a needlestick-related injury every day. On an average, one out of every seven workers is accidentally struck by a contaminated sharp/needle and only one out of three incidents is reported. Companies participating in the world retractable syringes market are making use of these staggering statistics to convince end users on the advantages of using retractable syringes and thereby, increase their market penetration.”                                source:  Frost and Sullivan

I have not taken the time nor do I have the expertise to know if PTMD’s syringe is the best one available on the market, but they certainly believe so.

The Price – I was shocked when the IR people told me the costs of syringes.  A single syringe costs as low as 17 cents to as high as 75 cents…..what syringe companies lose in price they make up in volume, I guess.  One of the “knocks” that I have read against other “safety syringes” on the market are their cost.  PTMD is aware of this and plans on pricing their syringes on the lower end of that range (approx. 20 to 23 cents).  They believe that will alleviate the price objection when they are working with hospitals on accepting their syringes.

The Chart – The “falling knife” has landed…I think.  Since I own shares in PTMD, I have been watching it since almost the beginning.   What was a short term trade for me turned into a long term hold (Didn’t follow my own rules about stop losses).  Since I am in it, I think that now is a better time to watch PTMD.

PTMD might be prime for a short term bounce, but I would watch it long term to see if it can execute on its strategy.  It’s all just “smoke and mirrors” until they get their syringes on the market, but I think the potential of the stock makes is something that should be on the trading radar.  The stock is still trying to find a bottom, but IMO it’s not that far off.

Disclosure:  Long PTMD