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Friday, 1 February 2013
Pressure BioSciences sees stock rally as commercialization progress continues
Pressure BioSciences (OTC:PBIO) shares have risen more than 77% in the past three months as the company made a series of advancements last year, with investors expecting more good news in 2013.
Its stock was changing hands at 42.5 cents on Wednesday - up more than 3.6%. The company's shares have more than doubled so far this year, and are up over 40% in the last 6 months.
The U.S. company operates in the growing biosample preparation market for life science research, which according to a recent report by AMI Research, was valued at $3.6 billion in 2011 and growing at an average of 18.5% annually through 2016.
"We expect PBIO to capture nearly 1% of this market by 2015. PBIO also targets additional larger markets, ranging from protein purification to immuno-diagnostics," the analysts said.
In 2012, the company began to aggressively commercialize its patented pressure cycling technology (PCT), which uses rapid and repeating cycles of hydrostatic pressure at controlled temperatures to extract cell components in the preparation of a biological sample - such as DNA, RNA, and proteins from humans, animals and plants - for further study.
Through the second half of the year, the company entered into various distribution agreements and began to build its global brand.
In November, Pressure BioSciences inked a two-way strategic marketing, selling and distribution agreement with UK-based biomedical product provider Constant Systems, with the deal to expand Pressure's international reach into 12 additional countries.
The parties have also started discussions on the possibility of expanding the agreement to include cooperative research, development, and manufacturing in the near future.
This deal followed three global distribution deals back in the summer, and a deal with biotech services giant Thermo Fisher's (NYSE:TMO) Cole-Parmer unit, which agreed to carry the company's PBI Shredder SG3 system.
With Cole-Parmer s reputation and extensive distribution channels, sales of SG3 are expected to significantly increase in the coming quarters.
The AMI analysts noted that throughout the year, management has been building a "strong, external sales and marketing team" to support its worldwide commercialization efforts, with results from this initiative already bearing fruit.
"PBIO has a solid product pipeline. The company has been timely in launching new high potential products. Two new instruments were launched in 2011. We expect a new instrument in 2013 and an additional two in 2014," the AMI report added.
Product margins for the company are being strengthened through new product offerings, with this trend anticipated to continue.
"We contend that additional product launches offer upside to our estimates and can only benefit from the significant exposure in the medical community that we expect PBIO to gain with its new commercialization efforts."
The company's PCT platform can also be used in several fields aside from the life sciences arena, with Pressure BioSciencesalready gaining traction in forensic sciences.
Earlier this year, the Florida International University was awarded a near $350,000 grant to improve rape case DNA testing usingPressure BioSciences' PCT platform. The FIU was awarded the grant from the Office of Justice Programs of the Department of Justice (DOJ).
The goal of the grant is to develop a faster and more accurate method of processing DNA evidence for rape prosecutions. The PCT technology permits the user to selectively burst open and extract DNA from the perpetrator’s sperm cells, while leaving the victim’s own cells in the swab sample unbroken.
This new procedure is expected to be complete by the fourth quarter of this year.
Aside from forensics, its PCT-based products can also be used for the key $2 billion target market of mass spectrometry, an analytical technique used to determine the characteristics of molecules, to biomarker discovery, and counter-bioterrorism, among other uses.
Indeed, the company has also been collaborating with the Armed Forces Institute of Pathology to develop pressure-based methods to improve the quality and speed of formalin fixed, paraffin embedded (FFPE) tissue processing.
And word of Pressure BioSciences' product potential has been spreading. For the three months that ended September 30, the company reported total revenue rose to $391,616 from $280,422 in the same period a year ago. Revenue from PCT products and services was $297,867, up 37 per cent year-over-year.
The company said it installed eight PCT sample preparation systems in the latest period, while sales of PCT-based consumables generated sales of around $28,000 - a rise of 33 per cent.
"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," the AMI report concluded, adding that it models profitability for the life sciences company in 2014 as it increases its market share.
The analysts rated Pressure BioSciences with a speculative buy, and a target price of $1.12 - implying a significant appreciation from its current trading price of 42.5 cents.
Zacks Investment Research also has a strong buy rating on the company, and recently reiterated its recommendation.