The Optiscan Imaging Limited (ASX: OIL) share price is flat today after the company received advice from the United States Food and Drug Administration (FDA).
At the time of writing, the Optiscan share price is trading at 12 cents. This compares to the All Ordinaries Index (ASX: XAO) which is marginally higher at 0.2% to 6,316 points.
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What does Optiscan do?
Optiscan is an Australian-based company that develops endomicroscopic imaging technologies for medical, translational and pre-clinical applications. Optiscan's products enable real-time imaging at the cellular level in human and animal tissue.
The company is used by leading research institutions and hospitals in North America, Europe, Asia and Australia.
Optiscan's newest product is the InVivage device, which uses laser light and confocal optics to screen patients for oral cancer.
FDA update
Optiscan advised it received written feedback from the FDA's Centre for Devices and Radiological Health (CDRH). The letter responded to questions the company had raised about its InVivage device in both January and June 2020.
Following the feedback, Optiscan said its pathway remained on track to apply for a premarket notification (501k) clearance for InVivage. The FDA answered questions regarding the proposed product code, primary predicate device and the use of Convivo device as a reference device.
The company will employ third-party validation, and verification testing will begin in the third quarter to support the submission.
In addition, Optiscan will run a clinical study at the Melbourne Dental School, which is expected to coincide with the verification testing. The trial will aim to illustrate the effectiveness of using a topical imaging agent with InVivage. The testing will start in the current quarter, with submission planned for the first-half of 2021.
Is the Optiscan share price a buy?
Despite Optiscan's stagnated share price today, shareholders have seen large gains over past few months. Since the March low, the Optiscan share price has jumped from 1.5 cents to 12 cents, representing a gain of 700%.
With a market capitalisation of $57 million, I think there is plenty of runway for the company's share price. Of course, this depends on whether it can commercialise its InVivage device and pursue sales opportunities.
I would be inclined to keep Optiscan on my watchlist for now and wait for the clinical study results.
