'Doubling Stocks' Editor: Biotech Pick Wins FDA Approval

Editor's note: Yesterday [04/23/2008], just hours after the markets closed, "Doubling Stocks" editor Michael Cohen provided his subscribers with a heads-up regarding a California-based small-cap company that's poised to attack diabetes -- a dreaded disease that impacts some 20.8 million sufferers in the U.S. He promised a full story this morning on what he and Marl, "Doubling Stocks"' customized stock-trading robot, deem to be a timely pick and, sure enough, here it is...

By Michael Cohen
Editor & Publisher -- "Doubling Stocks"

Company: VitalCare Diabetes Treatment Centers [VDTI.PK]
Yahoo! Finance: http://finance.yahoo.com/q?s=VDTI.PK
Company Website: http://www.vitalcaretechnology.com

I'm excited to tell you that, since deciding to make VDTI my stock pick... The company has announced FDA approval of the device used in the therapy I told you about!

For those who've been a member for a few months, you'll know that FDA approval in the medical industry is one of the biggest developments a company like this can make. This development has only served to strengthen what I told you last night, and has given me even more reason to believe VDTI.PK could soar in price.

First, though, let me tell you a little about diabetes -- the problem that VDTI.PK aims to solve...

Diabetes affects 20.8 million people in the United States. That's 7% of the entire population, and treatment of this 7% costs the U.S. economy $174 billion in 2007. And, yet, the problem is only set to get worse.

The cost [to the U.S. government] of treating diabetes has already risen by 32% since 2002. And, since diabetes is caused by obesity [and, thus, unhealthy, fast-food-driven lifestyles], experts agree that the problem is set to get worse. [The current estimate is that those affected will rise by 42% in just a couple of years.]

Diabetes already accounts for 18% of total hospital costs, as hospital costs are six [6] times higher for a patient with diabetes, than for a person without diabetes.

Now, I think we can agree that diabetes is a major problem. It is a condition which is given far less media coverage than cancer, yet it affects 7% of the population and inhibits their daily life indefinitely. [There is no "real" cure.]

But VDTI's [now FDA-approved] solution could ensure that diabetes sufferers live a life where their body functions as normal. Let me explain...

Insulin keeps diabetes sufferers alive, but it's not a cure. All diabetics, no matter how healthy they may seem, will begin developing a secondary medical complication as a result of their diabetes.

Perhaps, unlike any other disease, diabetes adversely affects all aspects of the diabetic person and his or her whole family. All aspects of life are virtually controlled by diabetes. Eating, sleeping, physical activities, sexual function, work, travel, and the overall way that diabetic person feels, are dependent on controlling the disease, and require constant attention.

A diabetic person constantly works to maintain his or her blood-sugar level within a "tight range," as this is all that they can try to do. There are no vacations from this disease -- even for a few hours. And, because there is no cure [and will be no cure for the foreseeable future] the best "cure" available is to ensure that the body continues to function as close to normal as possible.

VDTI has done just that. The company is the sole and exclusive licensor of iCAT therapy. [By the way, iCAT stands for Intracellular Activation Therapy.]

The iCAT therapy uses a special "micro-pulse" insulin pump, with extremely sophisticated proprietary software [algorithms] incorporated into its logic. The pump delivers small "micro-doses" of insulin in a pattern which mimics the way a normal pancreas secretes insulin, which is used by the liver. iCAT Therapy also uses "real-time" measurements of the patient's blood sugar levels and bodywide metabolic rate by the use of a "metabolic measurement cart."

[Note: My understanding of "metabolic rate" is that it is, in fact, just how fast your "whole system" runs. It is the rate you convert energy stores into working energy in your body. And, I have found that the whole problem with diabetes is that it stops your body from making the energy required to live.]

This measurement data is inputted into the pump, which automatically adjusts the next insulin dosage to stimulate a more normal metabolism... So, it is much more advanced than anything at the moment.

Currently, insulin is injected at a constant rate. VDTI's piece of equipment actually measures and calculates exactly what your body needs. Shortly, the body's cells begin to utilize glucose -- the main thing that people with diabetes cannot do normally.

This treatment, therefore, restores the normal functioning of the body, which promotes healing. No other technology or protocol has ever demonstrated this level of success.

And, it was this device which had me excited about the company when I decided to make it this week's pick. But, just the other day, VDTI announced: "FDA Approval of iCAT Therapy"!

The price has not changed. But, overnight, the company has, in my opinion, become intrinsically more valuable -- based simply on this development.

I cannot stress enough that FDA approval, in this industry, is a huge development for a company -- which is why FDA approval is otherwise known as "allowance to market."

Now, I also said last night, that no matter how strong a company looks... If they don't have a viable, clear and realistic route to market -- and, thus, revenue coming in -- I will not invest... And, usually, biotech companies such as this do not have a clear route to financial success.

Most see curing whatever disease as the main obstacle... Although, from an investor's standpoint, no matter how big a medical breakthough is possible, if there is not a clearly defined way of generating revenue, then it is not a business worth investment.

I've already told you how big the diabetes market is -- 7% of the U.S. population suffers from the condition. It most likely affects someone you know. And, in 2007, diabetes cost the U.S. $174 billion. Most of this cost was in terms of medical expenditure.

So, what is VDTI's route to market? In my research, surprisingly [for a bio-tech company], VDTI.PK has a clear route to market and, thus, revenue...

Just yesterday, in the same press release that announced FDA approval, VDTI CEO/Chairman Jimmy McDougald said: "With the only FDA-approved device delivering this treatment, we will expect to sign agreements to start the establishment of iCAT treatment centers immediately."

You see, VDTI.PK has the product completed, it is FDA-approved, and so obviously does what they claim [helps treat diabetes]. VDTI.PK can immediately start using joint ventures to open their own specialist iCAT treatment centers...

Plus, they can even start licensing the treatment for use in already established diabetes clinics almost immediately. [There are thousands of independent diabetes clinics across the U.S.] Each of these clinics will be able to license the iCAT treatment equipment... And, because the equipment is relatively cheap to produce [now, all the scientific work is done], profit margins are spectacular.

Now, everything I've mentioned points towards VDTI.PK being a strong company with a strong and experienced management team. But, up until now, despite this, the company has remained overlooked. And even FDA approval would be a wasted development if there were no investors watching the stock in the first place. [By the way, it is because this company is overlooked that I believe it is so cheap, given what the company has already accomplished.]

Overnight, FDA approval has made the current price an even bigger bargain, in my opinion. However, in last night's e-mail, I also mentioned that, recently, there has been a lot of media attention placed on diabetes and obesity. CBS News' "60 Minutes" even made it one of their top stories just the other day:

http://www.cbsnews.com/stories/2008/04/17/60minutes/main4023451.shtml?source=mostpop_story

When the large media networks lavish attention on a certain problem, in my experience, public companies who address this problem seem to make small, but noticeable, gains. Now, these gains are usually so small, they are not worth pursuing, as even the cost of trading will eat up the small profit on offer. But, with a micro-cap company, I believe this attention could see the stock price soar -- especially, with a relatively new, and overlooked, firm such as VDTI.

And, as this company is also now on the brink of success -- with the announcement of FDA approval -- it is sure to catch the attention of even more investors, as the problem is raised by the mass media.

Best Regards,

Michael Cohen

P.S.: I researched VDTI.PK from their website, press releases, and other public information on this company. It is always advisable that you do your own research, and see for yourself what makes this company special.

Because I chose VDTI based on a great product and a clear route to market -- but also because of mass media coverage of the very problem VDTI aims to solve -- it is, in my opinion, extremely time-sensitive. If you are reading this more than 24 hours after being posted, please don't even bother.

Kari Larson doesn't own stock of any of the companies mentioned in this post.
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