Following a year of bearish outlook on the company’s share price, Biocept Inc (NASDAQ:BIOC) is currently basking in the glory of their bull run. The past year saw the firm’s share price begin trading at above $20 per share and close the year trading below $1, an over 95% decline in the price.
The last week has seen the market witness a change in the above narrative as the firm has and continues to gain massively. By the close of last Monday, the firm’s shares were trading at $1 per share and this quickly changed by Thursday as the price rose to trade above $3.5 per share, an over 250% increase. The above momentum was also witnessed in the number of shares traded whereby over 6 million shares were traded during this period (see below). The price has currently fallen slightly to $2.29 per share, a fact which is discussed later in this piece.
With the above price action and share volume being witnessed, a look into the activity and news from BIOC and establish the catalyst to the above price action. Before this, however, let us have a brief look at the history of the firm.
History of BIOC
Biocept Inc was founded back in 1997 and headquartered in San Diego, California. The firm has its footing in the healthcare sector, specifically in the diagnostics and research industry and employs about 95 people on a full-time basis.
The firm specializes in molecular diagnostics with an incline towards cancer treatment. It has commercialized assays for gastric, breast, lung prostrate and colorectal cancer as well as melanoma. The latter is executed by leveraging on BIOC’s proprietary biopsy technology. Moreover, their patented technology – Target Selector™ liquid biopsy technology – aids in the capture and analysis of tumor cells, therefore, aiding in the identification and provision of therapeutic options for patients suffering from mutating forms of cancer.
There has been fairly little activity in the firm over the last month. However, the period has seen them release two pieces of information which are believed to be critical to their future price movements. Below is a summary of the above.
Introduction of AI
Just before closing the past year, BIOC announced that they had entered into a partnership agreement with Prognos Inc. Prognos Inc is an innovator operating by harnessing the power of artificial intelligence (AI) and applying it to clinical laboratory diagnostics. The agreement would thus see Prognos utilize the data received from BIOC – which will be shared with them in accordance with the Health Insurance Portability and Accountability Act of 1996 – and build on their understanding of AI to ensure that patients of BIOC not only receive the right medication but also the right therapies.
During the statement, the BIOC President and CEO, Michael Nall spoke to the positive implications Prognos was expected to have on them especially so given the vast amount of data the firm had collected during their tests – over 16,000 patient samples and more than 60,000 total tests. In his view, the use of AI would see them provide a more specific and tailored solutions to their clients thus ensure that they are better at diagnosing them. He further added:
“We are looking forward to working with Prognos to leverage the data produced by our molecular diagnostic platform and the ability to generate additional revenue for our business.”
In line with the above, the Prognos CEO Sundeep Bhan also spoke to the rising demand and need for innovative technology in the healthcare sector thus lauded BIOC for their bold step in taking them up on this venture. He further added that the new method would see BIOC improve on their cancer screening and consequently on their therapy provision going forward.
The Capital Raise
Over the course of last week, news on a securities purchase agreement between BIOC and accredited institutional investors stormed the market, leading to the momentum in the stock discussed earlier in this piece.
Under the terms of the agreement, the firm would offer 990,000 common shares at a price of $2.25 per share. This would consequently see them raise about $2.2 million (gross) before deducting other fees and expenses. Furthermore, the offering is expected to close by 23rd January.
From the above, it is clear why BIOC’s share price spiked and why it has slightly declined. In a fair market, the valuation set by institutional investors is believed to be the fair market value of the stock. As such, given the set price of $2.25, it is expected that the market will price the share accordingly thus explaining the current share price. previous investors in the firm can thus bask in the glory of the share surge thus on the capital gains which have been witnessed this week.
With BIOC having raised additional capital, the firm seems to be on an expansionary trajectory. Furthermore, their new partnership is expected to see them tailor their products for the current market and provide a more patient-specific analysis and prognosis, albeit the different forms of cancer. With the above two in mind, it seems that BIOC is a buy for new investors and a hold for previous investors.
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Disclosure: We have no position in BIOC and have not been compensated for this article.