All of the top-rated companies in stock market history share one common characteristic: A product or service breakthrough that improves life for a significant percentage of the world. Echo Therapeutics, Inc. (OTCBB: ECTE) is striving to become one of those companies by making life easier for the world’s 180 million Diabetics. The company plans to seek final FDA approval in 2010 for its “Symphony” device – the first needle-free product of its kind.

“Necessity is the mother of invention” – Plato

As a sharp fella by the name of Plato once said “necessity is the mother of invention”. In ECTE’s case, necessity is the need for the world’s surging Diabetic population to refrain from being pincushions. Most sufferers cite multiple daily needle sticks as the worst part of the disease. Therefore, it seems very likely that the first product capable of monitoring glycemic levels without needles would be extremely popular. While we’ve yet to develop a cure for deadly diseases like Cancer, HIV, recent advancements have helped drastically improve quality of life for those afflicted.

Innovation drove some huge PPS increases for leading medical device makers in ‘09, many of which recently gained FDA-approval for new products. A few high-growth scenarios that Echo Therapeutics could mimic if it does in fact bring 1 or 2 products to market over the next 12-18 months include:

Endologix (Nasdaq: ELGX) Recently gained FDA approval and began commercial production for its IntuiTrak® stent graft delivery system for aortic aneurysms. PPS rose from a low of $1.63 to a high of $4.83 on 12/29. Much like ECTE’s technology, ELGX’s product addresses the shortcomings of first generation devices and facilitates major improvements to patient comfort, quality of treatment, and mortality rates.

American Shared Hospital Services (AMEX: AMS) PPS jumped from $1.00 to $2.95 in 2009 as the company’s FDA-approved Gamma Knife, non-invasive radio-surgery Cancer treatment emerged as a best-in-class offering. It is important to note that AMS likely generated less than $20 million in annual sales during ‘09 with systems in place at roughly 19 medical centers in 17 U.S. states. While the company’s product is solid and future potential exciting, ECTE likely has more mass market appeal and should be able to generate substantially higher revenues once or, two, or three FDA-approved products reach market.

Candela Corp. (Nasdaq: CLZR) – Shares of the pioneer in laser-based cosmetic surgery devices surged from $.53 to $2.68 on expectations of a merger with Syneron (Nasdaq: ELOS) a leading global aesthetic device maker. The deal closed last week and the future looks bright for the new Syneron, which now boasts likely the strongest product offering and global reach in its market niche.

 Other prime examples of how transformational healthcare innovation translates into profits for investors include:

Merck & Co. (NYSE: MRK)- shares nearly doubled from the October 2006 announcement that the company received FDA approval for the first ever vaccine for human pappilomavirus (HPV) infection.

ECTE holds the  potential to begin commercial production of one, perhaps two FDA-approved products in 2010 that have an opportunity to command a substantial share of a combined >$12 billion target market. Therefore, we feel strongly that this year, Echo Therapeutics is positioned to deliver the type of returns generated by leading medical device companies including ELGX, AMS, and ELOS in 2009.

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