Vivos Inc a Potential Disrupter in the Burgeoning Brachytherapy Market

(Originally published Aug. 21, 2024)

Penny stocks represent just about the riskiest market category available to retail (public) investors. However, if you had some pocket change lying around, for kicks and giggles, you may consider a small exposure to medical device enterprise Vivos Inc (RDGL).

Based in Richland, Washington, Vivos is billed as a radiation oncology medical device firm. Specifically, it has developed the yttrium-90-based RadioGel device, an injectable particle-gel for brachytherapy radiation treatment of cancerous tumors in people and animals. The company has garnered recent momentum for its IsoPet solution for the treatment of solid tumors in animals.

Risk factors for RDGL stock are plentiful. As you might imagine, the speculative entity generates very little revenue, sometimes going years without anything on the top line. It goes without saying that it currently produces no earnings and so valuing Vivos by traditional metrics is difficult.

That said, there are positives that one wouldn’t naturally expect from RDGL stock. For one thing, Vivos has no debt. Second, its Altman Z-Score stands at 106.09, which by the logic of the metric indicates little chance for imminent bankruptcy. Perhaps most significantly as social media advocates of Vivos pointed out, the company’s head executive, Dr. Michael Korenko, has been an active buyer of RDGL.

As many are quick to point out, there’s only one reason why insiders buy securities of their own company.

Massive Market Opportunity

Why should investors consider buying RDGL stock? It really comes down to the growth of the underlying brachytherapy market and the disruptive potential of Vivos’ RadioGel innovation.

According to Grand View Research, the global brachytherapy market was worth $907.76 million in 2022. Between 2023 to 2030, the sector is expected to expand at a compound annual growth rate of 7.1%. By the culmination point, the industry could command a valuation of $1.62 billion.

Now, the difficulty for Vivos is that individual business units within large corporations such as Siemens (SIEGY) and Becton Dickinson and Co (BDX) dominate the space. This is understandable as brachytherapy’s mainline attribute is precision targeting. By engaging in localized treatment (via the placement of radioactive sources directly in or near cancerous tumors), there is minimal damage to surrounding healthy tissue.

However, there are a few drawbacks to brachytherapy, particularly the surgical implantation required. In addition, the methodology is best suited for tumors that are localized and relatively small. It’s less effective for large or metastatic cancers.

Fortunately, one of the major benefits of Vivos’ RadioGel approach is that it’s minimally invasive. RadioGel is a liquid polymer that can be injected directly into tumors, where it solidifies and delivers targeted radiation without requiring surgical implantation of radioactive seeds.

Perhaps most importantly, the Food and Drug Administration (FDA) late last year awarded Vivos a Breakthrough Device Designation, marking a crucial milestone in the treatment of solid metastatic tumors. Therefore, RadioGel may be more adaptable than traditional brachytherapy approaches, adding credibility to RDGL stock.

Technical Dynamics to Consider

Previously, RDGL stock traded hands well above the 20-cent level. So, why did RDGL stock scrash? Unfortunately, hiccups related to Vivos’ application for human trials of RadioGel caused the market to react harshly. The volatility pushed RDGL back into single-cent territory before it marched toward the 12-cent level, where it currently resides.

Shares happen to be sandwiched between the 50-day moving average above (16 cents) and the 200 DMA below (11 cents). Further, the 20-day exponential moving average is serving as resistance against RDGL stock. What is particularly pressing for the bulls is that volume levels have been declining while the price has been rising. Ideally, you’d like to see volume confirm a rally.

Given that there appears to be significant resistance at 13 cents, a higher risk exists of near-term choppiness, if not downright volatility. Subsequently, those bullish on the opportunity may consider a staggered approach: dip your toes into the water but keep the powder keg dry.

Moving forward, it will be critical for RDGL stock to hold the 10-cent line. A dip below that could spark further panic. However, if Vivos maintains this threshold, a gradual, controlled acquisition might not be a bad idea.

Disclaimer: The author holds a long position in RDGL stock.

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