With a large patent portfolio and pending infringement case, Zecotek Photonics (TSXV:ZMS) is well positioned to benefit from growth in the lucrative positron emission tomography scanner market, says Zacks analyst Brian Marckx.
Marckx notes that Zecotek has a sizable patent portfolio that covers all its major products, including lasers, displays, LFS crystals, photo detectors, and other PET component technologies. This, he says, sets the junior apart as the only company to own all the key elements for a high end positron emission tomography (PET), a nuclear medical imaging technique that produces a three-dimensional image or picture of functional processes in the body.
The Zacks analyst says that while the carrying value of Zecotek’s patent portfolio is minimal, the “true tangible value” could be substantial, and that success in its current actions against giants Philips and Saint-Gobain could produce a result that dwarfs the company’s current market cap.
In a research update released October 3rd, Marckx initiated coverage of Zecotek with a BUY rating and a one-year price target of $4.00.
In February of last year, Zecotek filed a lawsuit in the United States District Court of Ohio against Philips and Saint-Gobain, alleging that Saint-Gobain’s LYSO crystals infringe Zecotek’s patent, and that Philips infringes by using those crystals in the PET scanners it sells. In August, the case completed its “Markman Hearing”, an important pretrial procedure that aims to determine the use of relevant key words in a patent claim.
Marckx says the courtroom is not the only place Zecotek is aiming to monetize its intellectual property. He notes that the company is developing and commercializing products built from their IP and has engaged leading IP firm involved in patent strategy and monetization, which includes patent purchasing, licensing, building and partnering.
In July, Zecotek announced it had received a $500,000 order for its patented Lutetium Fine Silicate (LFS) scintillation crystals from its strategic partner Hamamatsu Photonics, one of the world’s leading suppliers to the photonics industry.
At press time, shares of Zecotek were up 9.4% to $.93.
Zecotek is an annual sponsor of Cantech Letter.
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