Health Discovery Corporation's (HDVY.OB) test may help curb the second-leading cause of cancer death

Is the future of personalized medicine one step closer to reality?

The diagnostics industry and Wall Street are keeping an eye on the reverberating whispers about Georgia based Health Discovery Corp. (HDVY.OB) which uses mathematical techniques to analyze large amounts of data to uncover patterns in biomarkers.

While most industry experts agree that molecular diagnostics technologies will play a starring role in the practice of medicine and public health during the 21st century, the process of separating the gifted thespians from the bit players has become increasingly difficult.

Last October, Research and Markets, the Dublin firm which maintains the latest data on international markets, key industries, new products and trends published a report that showed the number of companies involved in molecular diagnostics had increased remarkably to over 500 companies during the past few years. The majority of those had been identified to be involved in developing molecular diagnostics along with tabulation of 621 collaborations.

What makes Health Discovery Corporation stand out is the application of its patent protected technologies as well as the fact that they have become a quiet leader in the field of molecular and prognostic test development. Already the company boasts partnership agreements with Quest Diagnostics Inc. (NYSE: DGX) and Abbott Laboratories (NYSE: ABT) among several others. Quest alone performs medical diagnostic tests for more than half a million patients each day. Many of those patients are referred to them by about half of the physicians and hospitals in the U.S. It is those same agreements however, that may be the reason the company has been flying relatively low; under the radar screens of most investors for years.

"The diagnostics landscape is as competitive as it is secretive," explains biotech columnist M.E. Garza of BioMedReports. "Clinical laboratories and lab equipment manufacturers, in particular, fight hard to keep a competitive edge and they monitor each other's pipelines and progress like hawks. The slightest tell about which company is about to hit the market with what test products sounds multiple alarms, so companies like Health Discovery Corporation that work in partnership with these firms are held to iron-clad non-disclosure agreements, probably second only to those of the defense industry.

"That helps keep development stage companies somewhat gagged until they reach the commercial stage. Despite being publicly traded companies, many of them aren't allowed to say much about the progress of their own products after they sign partnership agreements with the big players in the clinical lab and manufacturing space. Even as you look back at press releases and public filings, many of the details about the partnerships are shrouded in secrecy, and often times simply reported as 'undisclosed.'"

That hasn't stopped investors and speculators from placing bets that Health Discovery is about to make a significant announcement, which would likely signal a huge shift away from the most commonly used PSA (Prostate-specific antigen) cancer screening test.

For some time now, doctors and their patients have been searching for a better screening standard. Because benign prostate conditions also affect PSA levels, a surgical biopsy is most often necessary to actually detect cancer. Also, since a tumor may be confined to only a small portion of the prostate, without a way to identify the most suspicious regions, a biopsy sample can miss the malignant area completely.

Health Discovery has developed an exciting noninvasive test for clinically significant prostate cancer. According to a presentation made in front of independent broker/dealers and investment bankers in Dallas last week, Health Discovery's prostate cancer tests showed 90% Sensitivity for correctly identifying the presence of Grade 3 or higher prostate cancer cells and 97% Specificity for correctly identifying non-cancer cells (normal and BPH).

"The test can not only tell you if you have an enlarged prostate, it can also tell you with a great degree of accuracy whether you might have cancer as well," Garza explains. "If true, then it does all of this at an earlier stage and it reduces the number of trail and error biopsies. The implications of this development are tremendous for the marketplace, since already over $5 billion a year are spent on these out-dated tests in the U.S. alone. When one considers that this test new test may quickly become the new standard around the world and that men are going to be far more likely to want to get tested, the financial impact this might have for an OTC company trading at around $.30 is staggering."

Recently, a company that infringed upon one of Health Discovery's technologies to develop an ovarian cancer test saw it's shares rise from pennies to over $28 per share.

"What's interesting about that is that the dollars and market potential for that ovarian test pale in comparison to the emerging market opportunity for this prostate cancer test," according to Garza. "It's not even close. That company is still in bankruptcy and it's market-cap is completely bloated. At least one banker who saw the Health Discovery's presentation in Dallas scratched his head at the thought that one company was trading at nearly thirty-dollars while the other was at thirty-cents. He wondered out loud how this could ever have happened."

It is known that Health Discovery has licensed rights to develop the new urine-based test for clinically significant prostate cancer to various partners, but which partner will be the first to market with that test remains to be disclosed. If the first to market is Quest Diagnostics, then the company will aim to quickly grow market share before Abbott begins to sell the diagnostic equipment armed with the same technology to Quest's competitors.

Either way, Healthy Discovery gets royalties and likely becomes the new diagnostics tool of choice for the medical community.

Interestingly, the test uses the company's mathematical algorithms called Support Vector Machines (SVM) and Fractal Genomic Modeling (FGM) pattern recognition. These mathematical tools also have significant application potential in markets outside of medicine. Recently, the company opened and staffed an office in New York City in hopes of better reaching out to leaders in other industries who might benefit from their innovative pattern recognition technology platforms. [Micheal Deosdade covers emerging stocks for various news syndicates]

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