Here's Why HTG Molecular Diagnostics Inc (NASDAQ:HTGM) Won't Stop Here

On October 6, 2017, we published this piece on HTG Molecular Diagnostics Inc (NASDAQ:HTGM).In the article, we outlined our thesis on the company, suggesting that there was the potential for some near-term strength based on the potential completion of a four-part submission to the FDA in the US for its lead development asset.At the time, the company was trading in and around $1.80 a share.Fast forward a few weeks and HTG has rocketed to current prices at $2.78 – a close to 55% appreciation in less than a month. That's a nice return for anyone that picked up an exposure on the back of our coverage, but we don't think the company is going to stop here.Here's why.At the end of last week, management put out a press release outlining its intentions to get its latest financial results in the hands of shareholders after the market close on Tuesday, November 7. In parallel to the numbers, HTG will also hold a conference call to serve up and operational update. HTGM Daily ChartThe numbers have the potential to inject a bit of near-term volatility into the company but, for us, it's the conference call and the operational update that's really going to dominate sentiment over the coming quarters.Why?Because, as outlined above, HTG is edging towards the potential commercialization of its lead development asset in the US right now. The asset in question is called the HTG EdgeSeq ALKPlus Assay and it is designed to allow for the sampling of formalin-fixed, paraffin-embedded lung tumor specimens from patients previously diagnosed with non-small cell lung cancer (NSCLC).To explain why this is important, we've got to look at a drug called Crizotinib, known commercially as Xalkori and marketed by Pfizer Inc. (NYSE:PFE). This drug is a great treatment option for a small-ish portion of lung cancer patients but it needs to be administered as soon as possible post-diagnoses and it won't work in a fairly substantial portion of the patient population. Right now, it's a sort of hit and miss environment – treat the patient and hope it works. If it doesn’t, the cancer progresses and the patient in question has wasted valuable time with an ineffective regimen.With the ALKPlus test, HTG is hoping to be able to test all NSCLC patients and return a result almost immediately that will identify whether they are going to respond well to treatment with Crizotinib, or not.This is a time-saving device and – in an indication like this – time-saving can be life-saving.So, what's the catalyst?The company needs to submit four separate parts of an application to the FDA and three of them are already with the agency. The last one is going to be submitted on the completion of what’s called a method comparison study, which is expected to wrap up during the first quarter of 2018.The submission of the final section is a major upside catalyst as and when it happens, but there's a nearer term event that could add value and – if our expectations are correct – this event could take place on the upcoming earnings conference call.Specifically, we're looking at the outcome of the FDA's review of the third part of the submission discussed above. The company has reported back on two of the three already-submitted sections and both came back favorably. If the third one falls in line with these two, it will pave the way for a relatively smooth path to regulatory approval, with only the method study needed to tick all four required boxes.So, if the company reports on the upcoming call that the FDA has approved part three, HTG stock is going to run.Let's see what happens.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on HTGM, sign up below!Image courtesy of scott feldstein via FlickrDisclosure: We have no position in HTGM and have not been compensated for this article.