Optifinancial Newsletter - Knowledge is power - Brad Mitchell
This is not financial advice nor recommendations. This is purely our own thoughts and opinions regarding the matter discussed below for entertainment purposes. This is not advice and is never intended to be.
Disclosure: We own BIOR securities/shares at the time of publication. This could affect my biases in my analysis.
Biora | $0.68
Multi Billion in annual revenue or M&A soon
Multi-billion long term or M&A (merger & acquisition) soon
From my research in the past, it is clear that Biora has the right ingredients. Execution is all they need. Here we are - at a time where the company has completely offloaded half of its employees, lawsuits, cashburning aspects of the business. They shelved high risk products which can still have the IP sold (Preecludia), divested their Single Molecule detection program and own a minority stake. They have also reduced their operating cash flow while changing their name from Progenity to Biora. They have also been hiring engineers to help productionize their product lines which will take 2 years for full scale operation from experience. (They also opened up an engineering lab space). They have reduced the complexity of their business and focused very tightly on their product lines which has shown pre-clinical viability. They also have 20 years of data and are finally at the point where they are going to go through the FDA medical device approval process. They announced in march that they progressed their DDS into the next phase.
At the same time, Biora is meeting with the FDA regarding their planned trial with Tofacitinib (Estimating peak revenue to be 3-5 billion for Ulcerative Colitis (UC)) . We should hear about if they can commence the expedited approval route in Q3, around September. Pfizer is extremely interested in this aspect. Tofacitinib is a drug which has been very effective in treating UC however received a blackbox warning. Biora aims to completely avert that problem and become the delivery method to become the dominant UC care.
They have control of their IP, a lot of their cash burn from the past year has been paying lawyers to protect them and lay out critical patents which control their part in the oral tech market. They also have ownership of IP which will allow them to treat 30% of the UC market which does not react to current UC drugs. (Estimated revenue from this is 1-2 Billion annually)
Not to mention, they also have the OBDS which has garnered much interest from 3 companies as far as we know. Ionis, and 2 other large pharmas which we will know about at the end of the year. I believe we will see cash infusions from these partnerships which will extend the business runway. Current runway is estimated to be Q1 before they will need cash. They have 85 Million of ATM which allows them to dilute stockholders, I do not believe they will take this route however.
Finally, the RSS which is not mentioned as loudly by the company. I believe that they will be getting contracts from pharma and institutions to make and sell these to them. Takeda or other large pharmas have much interest in this. The RSS also has another business case as it can be used to track and diagnose SIBO which is estimated to be a 220 Million Market in revenue every year, I think Biora by being so prevalent in the digestible disease community will be readily accepted by gastroenterologists.
Biora has the longevity to either buyout/merger or go at it alone (with lots of partnerships) . I think that we will see a massive uptake in share price overnight. At this time, It is a really good idea to buy as the stock is at its all time lows.
Current Price: $0.68
The company at this stage will look very different from today. They will have established a dominance in the oral delivery market with a wide moat of research and patent protection. The partnerships that they are working on today will start to bear fruit during this time.
If Biora is not bought out, we should see them bloom like Dexcom. They have a medical device that will serve the needs of patients and give doctors the feedback that they will always want to have. It will be hard for doctors who prescribe drugs to not want to use a patient compliance mechanism such as Biora’s DDS or OBDS. Another note to make is that insurance will want to have this data in hand as well. Biora will most likely have many other drug candidates in their pipelines with funding from partners to validate their drugs.
Disclosure: We own BIOR securities/shares at the time of publication
All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.
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Until next week,
and the Optifinancial Team
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