Premier Biomedical Inc (OTCMKTS:BIEI) is down more than 56% on last last month’s highs, as far higher than average selling volume has put pressure on the company and its market capitalization. To the July top, however, Premier had had a great quarter. A recent slew of news suggests the current decline might just be a correction, and that we could see a turnaround in line with the overarching bullish trend during the coming few months. Let’s take a look at why.
First up, a quick introduction to the company. Premier is a development stage biotech with a wide scope of potential treatment targets. It’s proprietary technology (which we’ll look at in a little more detail shortly) allows it to go after areas with significant unmet need – and huge potential revenue pools – like cancer, Alzheimer’s, brain and spinal trauma, to name just a few. Companies of this size rarely get the opportunity to go after such big markets simultaneously, and this is a major part of the attraction for Premier’s shareholders.
So how does it do it? Well, the company has developed what it calls sequential dialysis, which is a technique that allows for the removal of molecules that are responsible for disease in humans (and here’s the important part… ) outside of the body.
Premier just released a report that details the pitching of its lead cancer antibody, PBI-5D3H5, against a range of competitive products, so let’s use this as an example of how its technology works.
Conventional cancer treatment requires that chemotherapy drugs be introduced to the patient’s blood stream, and then activated by radiotherapy. This process is limited in its efficacy by the amount of radiation a person can withstand. Premier’s technology allows the treatment to take place outside the body – it removes the blood sequentially, introduces its antibody and the antibody physically removes cancerous cells from the blood. The blood then returns to the patient. Think about it as a sort of cleaning, but one that allows for a far higher toxicity of treatment as the method takes place ex vivo.
It’s been referred to as the wild west of biotech, but it could easily prove the next big thing if companies like Premier can push these early stage candidates through the clinical development process.
Getting back to the latest cancer release, Premier’s PBI-5D3H5 beat out the current competitive (and commercially available) products in head to head tests in mice. That’s proof of concept, and to a higher degree than expected. Here’s what CEO William Hartman thinks:
At the start of these initial tests, we were hoping for comparable performance of our antibody versus competitive products, but we were delighted about the demonstrated superior performance of our immunotherapy anti-cancer drug.
It’s a massive step forward, and offers up a proof of concept that supports the potential of the company’s technology to target what amounts to more than $800 billion in revenues across the various target indications.
So what’s the downside?
Well, as is pretty much always the case with these sorts of companies, financing could be a major sticking point going forward. The company recorded just $39K cash and equivalents as of March 31, and has zero past (or likely medium term future) revenues. It just consolidated its outstanding debt, which at least temporarily removes the downside pressure of competitive loan conversion stock sales on its market cap, but dilution could become a real issue as it moves forward with its pipeline. A host of convertible promissory note issues across the last six months have left notes available for conversion at steep discounts to conversion day prices – 60% in most cases – and this sort of activity is likely to carry on for the foreseeable future. If Premier doesn’t move quickly through these pre clinical phases and get some attention on the open market, it could dilute any value its shareholders currently hold.
We’re watching to see what the latest impressive data does to market sentiment. According to the company, when the next series of tests are concluded, major announcements regarding specific results will be released.
Want to find out what these results are ahead of the market? As soon as we get wind of of the announcement, we’ll update Insider Financial readers. For continuing coverage on BIEI, sign up for our free newsletter today and get both our next hot stock pick and a free ebook!
Disclosure: We have no position in BIEI and have not been compensated for this article.