SEEKING ALPHA?After 3-plus years of trial and review of Stereotaxis’ Niobe remote magnetic technology for cardiac ablations, Japan’s Pharmaceuticals and Medical Devices Agency (similar to FDA in the US) issued regulatory approval in March 2013.

Soaring EP ablations marketplace*

That approval was followed by the news in October 2013 that Japan’s Ministry of Health, Labor and Welfare had bestowed a C2 classification for Stereotaxis’ Niobe system recognizing it as a “new, distinctive technology with clinical benefits”. The C2 classification is the highest of five reimbursement categories for medical devices in Japan.

So we are at the cusp of the second largest medical device market globally (behind only the US) opening up for Stereotaxis. What could that mean for sales overall? Here are some numbers around hospitals and EP procedures that the Company shared earlier this year via a press release in May 2013:

“The Japanese market represents a major growth opportunity for Stereotaxis?its medical devices market is the second largest in the world following the US. In order to provide for an incentive for the development and use of more innovative medical devices in the country’s healthcare system, the government has created a very attractive reimbursement environment.

?Additionally, along with the highest life expectancy among developed nations at 82.9 years, Japan has a rapidly aging population. Seniors, our primary patient target, represent 23% of the total population and are expected to reach 40% over the next 50 years. The rate of complex EP ablations is anticipated to rise with the aging population.

?There are currently 570 hospitals performing about 38,000 EP procedures annually. By 2018, this number is expected to increase to over 42,500 procedures per year. For obvious reasons, the Japanese people are very mindful of radiation risk, making the demonstrated safety benefits of procedures on the Niobe system particularly appealing”.

Stereotaxis note that there were an estimated 38,000 EP ablation procedures in 2011 growing to 75,000 in 2018. Of that market, they estimated there were 17,000 Atrial Fibrillation (AF) procedures in Japan in 2011 growing to an estimated 48,230 in 2018. AF is one of Stereotaxis key EP ablation procedures.

Global growth opportunity, including China

There is still a very large portion of the large global market, including the US, available to Stereotaxis. In their Q3 Investor Presentation there is a slide showing how big the opportunity is: 543,493 worldwide EP procedures in 2012 growing to 724,496 worldwide EP procedures in 2015.

Within those estimates, Atrial Fibrillation shows the highest growth rate and AF is a key procedure for the Niobe system.

With respect to the rest of Asia, success in Japan could lead to greater penetration of other markets. Specifically management has been positive on the Company’s prospects in China.

With only 7 installed Niobe systems there to date, China represents another large, untapped market for them.

Here is how they described the China market in its Q2 investor presentation: The fastest growing hospital equipment market in the world (cath lab unit sales over 20% annually)

EP procedures rapidly growing (will reach 100,000 AF procedures by 2020)

High respect for U.S. medical technology and physicians

Stereotaxis technology regarded as the future of EP

The one market that has shown how dominant Stereotaxis’ technology can be is the Nordic region, where Stereotaxis has become the standard of care.

*Electrophysiology (EP) ablation is used to help correct arrhythmias through Catheter Ablation. Ablation is a treatment that cauterizes (burns) cells to eliminate rhythm abnormalities in patients.