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Tuesday, 25 September 2012
ViewTrade starts Pressure Biociences at "Speculative Buy" with $1.12 target
ViewTrade Securities has started coverage on Pressure Biociences (OTCQB:PBIO) with a "Speculative Buy" rating and $1.12 price target.
Pressure BioSciences is a life science, medical device company that developments and commercializes pressure cycling technology (PCT).
PCT technology uses instrumentation that cycles pressure between ambient and ultra-high levels at controlled temperatures to control the interactions of bio-molecules.
PBIO's technology is used genomic, proteomic, and small molecule sample preparation as well.
"A highlight to the Pressure BioSciences' story is its aggressive commercialization effort that management had begun earlier this year," ViewTrade's director of research Peter J. D'Agostino said in a note.
"Management has been successful in beginning to create a global brand, which is reflected by the sharp increase in its number of international distribution agreements. This, coupled with PBIO's string of new product offerings and expansion of current technology should pave the way to the company's profitability."
In a research note, the brokerage said that PBIO has a broad customer base. There are currently 140 customers who have purchased or leased the PCT platform.
In early 2012, PBIO began its commercialization initiative of these instruments and has gained traction, which is reflected in PBIOʼs product revenue growth yearover-year and sequentially.
"In our opinion, PBIO is poised for substantial growth with the aggressive commercialization of its Barocycler product portfolio, new offerings in its pipeline and promising new markets for its existing technology," ViewTrade's D'Agostino said.
"We model profitability in 2014 as the company increases its market share."
Looking ahead, ViewTrade expects product revenue of $800,000, $2.2 million and $6.4 million for 2012, 2013 and 2014, respectively as PBIO aggressively commercializes its product platform, increases its distribution base, forms strategic agreements and launches new products.
"We expect more product offerings to be rolled out in 2013 and pushed through the channel quicker. We expect operating expenses to begin to level off during 2H:13, resulting in profitability during 2H:13."
The brokerage was "impressed with managementʼs success" in significantly expanding PBIOʼs distributor base and forming strategic agreements with larger partners while planning to roll out new products in 2013 and 2014.
"As far we know, PBIO is the only company with PCT technology and available products," ViewTrade's D'Agostino concluded.
"Thus, we are confident that as the company continues its commercialization it will gain significant medical acceptance, allowing PBIO to grow market share.
"At this time, we urge investors to view PBIO as a revenue growth story and as a buy and hold stock."