BioLife Solutions Inc (NASDAQ:BLFS) had a great second half of the week last week. The company kicked off the session on Wednesday at around $4.88 a share. By close of play on Friday, shares went for $5.91 having flirted with $6 a piece late afternoon.
Here’s a look at what’s behind the run, what we expect next and where we are looking longer term for BioLife.
First up, a quick introduction to the company.
This one is a biotechnology company that’s working in the field of shelf-life preservation. That doesn’t sound overly interesting but it’s one of those spaces that, while it’s not going to be grabbing news media headlines like a cancer breakthrough company might, it’s got some real potential from a revenues perspective for any company that can bring a major advance to market.
And it’s this advance that BioLife is working on.
The company has developed (and now markets) two primary platforms – one called HypoThermosol and one called CryoStor. As their name suggests, one is rooted in hypothermic storage (the former) and one in cryopreservation (the latter). Basically, the biologics are run through the HypoThermosol treatment (which allows them to be stored at 2-8°C and then through the CryoStor treatment, which means they can then be stored at -70 to -196°C.
This might seem a little excessive, but for things like regenerative medicine (which relies on the on-demand availability of stem cells), the ability to store said cells at a temperature that doesn’t expose them to the stresses of the standard storage methods (at a cellular level, that is), can translate not just to faster, effective treatment availability but also cost savings based on a reduction in wastage of the cells in question.
So why is the stock running right now?
Well, management just put out BioLife’s latest financials and – alongside the numbers – served up a business operational update.
And both were very promising.
As per the numbers, the company reported revenues for the third quarter of this year at $3 million – record quarterly highs and an increase of 39% compared with the third quarter of 2016. Nine-month revenues (to the end of September this year) hit $7.9 million.
Importantly, more than $1.6 million of these three-month revenues derived from sales to the regenerative medicine market segment – a sector that management has highlighted in the past as being a real target focus for the company throughout late 2017 and 2018.
Net loss also narrowed during the quarter as compared to the same period last year, coming in at $425K during Q3 2017 and $969K during Q3 2016.
Guidance also got markets excited, with the company expecting revenues for the year this year to range between $10.8 million to $11 million, representing growth of 31% to 34% over 2016. Not only is this up on last year, it’s also a boost on previous guidance of $10 million.
Cash on hand at the end of September came in at $2.8 million, up from the $1.4 million reported at the end of last year. Burn across the first nine months of this year came in at around $1.4 million, giving the company a runway of somewhere in the region of 16-18 months.
This removes any near-term dilution risk which, for a company of this size ($78 million market capitalization at last count) is a major plus for anyone looking to pick up an exposure at current prices.
So what’s next?
We’re looking for continued customer acquisition in line with the growth in the regenerative medicine space as indicative of BioLife’s ability to continue to appreciate longer term. With dilution risk negated, any operational update should serve to inject some near-term upside momentum into the stock as and when it hits press.
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Image courtesy of NIAID via Flickr
Disclosure: We have no position in BLFS and have not been compensated for this article.