The development of SMI’s technology is expected to significantly improve long-term patient outcomes while substantially reducing overall costs for the healthcare system. In 2004, domestic spending on non-melanoma skin cancer alone topped $1 billion, and by 2010 worldwide spending on melanoma is expected to reach $6 billion. Since approximately 62% of melanomas and 45% of melanoma deaths occur prior to age 65, melanoma places significant burdens on the healthcare system well beyond Medicare. Additionally, published reports estimate the total current annual U.S. market for endoscopic-imaging products at approximately $6 billion/year for gastro-intestinal and lung applications alone.

Intellectual Property

SMI has entered into a license agreement with Carnegie Mellon University for exclusive worldwide license to patents issued to Carnegie Mellon (with our chairman as main inventor). The uses licensed to SMI include spectral imaging for all clinical medical applications, including endoscopy and dermoscopy. In addition, SMI owns as assignee the rights to a U.S. patent covering a non-invasive technique for the potential early detection of cancer using imaging-elastic-scattering spectroscopy.

Applications

SMI's spectral-optical-imaging technology has multiple applications, end-user markets, and potential revenue streams. The company's devices are intended to harness its acousto-optic-tunable filter platform, generating revenue from unit sales, recurring items, and tangential services, including high profit margin software. SMI also intends to generate income from telemedicine (dermatology), device maintenance, optional feature modules, and remote terminals. The company's objective is for SkinSpect™ to become an integral part of the standard of care in melanoma detection. Additionally, SMI's strategy will include the potential acquisition of complementary products and technologies in the dermatological arena. The company plans to commence a similar timeline and development plan for each of the EndoSpect™ and OxySpect™ devices.