Life Sciences Tools & Services
The following headlines have been reprinted from The Penn Wealth Report and are protected under copyright. Members can access the full stories by selecting the respective issue link. Once logged in, you will have access to all subsequent articles.
|
ME $1
06 Feb 2024 |
After exploding out of the gate as a SPAC, 23AndMe shares are now trading under $1
There are a number of sub-plots to unpack in this story, so let's begin with the basics: 23andMe (ME $1) is a genetics testing firm which provides a suite of DNA reports to customers. The "hook" for would-be subscribers may be the ability to understand one's ancestry, but the company's main focus is on identifying potential genetic health risks and, ultimately, providing therapeutic solutions. That alone is controversial; knowledge may be power, but imagine the needless worry that comes with knowing a host of personal health risks which will probably never manifest. 23AndMe went public in 2021 through a Richard Branson-backed special-acquisition company (SPAC) called VG Acquisition Corp. Once valued at nearly $6 billion, the company's driven leader, Anne Wojcicki, promised a host of products and services on the horizon. With the incredible amount of data the firm was collecting from DNA testing, the plan was to create a stream of therapeutics delivered with unprecedented accuracy. The pandemic put the company into hyperdrive as Americans suddenly became keenly interested in how their immune systems work. Before long, however, concerns over data security began denting sales. It is one thing for a bank account to get hacked, but what could be the ramifications if someone's personal DNA map suddenly showed up on the dark web? In fact, that danger came to the forefront this past December as the company announced that data on its customers had been compromised. Hackers were able to access names, birthdates, ancestry reports, and other information on some six million people. Cybersecurity expert Justin Sherman put it succinctly: "You can change your passwords, but you cannot change your DNA." All of the concerns over data security and whether or not the company could meet its lofty goals without a massive inflow of new cash helped pound the stock price down to under $1 by the end of the year. It has already had one-quarter of its market cap shaved off in 2024 and now sits at just $323 million in size. The company's strong growth focus has morphed into layoffs and concerns over the speed at which it is burning through cash. It is not an impossible proposition that this company will stage a turnaround, but it is going to be a herculean task. The latest fundraising effort garnered $1.4 billion, with 80% of it already spent. Wojcicki does have a star-studded list of personal friends and backers, from Sergey Brin to Alex Rodriguez, and her company sits on a treasure trove of 10 million DNA samples which could be used for research, but time appears to be running out on her grand plans. |
|
EXAS
|
Exact Sciences is expanding its cancer screening lineup with Thrive acquisition
(28 Oct 2020) Few technological advances are as exciting as noninvasive medical diagnostics—the ability to be screened for everything from colon cancer to heart problems without the specter of being knocked out with drugs and probed with instruments. We're not exactly at the Bones McCoy stage yet, but we are rapidly getting there. One of the companies on the frontline of noninvasive medical diagnostics is Exact Sciences (EXAS $129), which most people might recognize by the little blue talking Cologuard box in TV ads. While the company's claim to fame has been its at-home colorectal cancer screening kits, it is about to make a huge leap forward with its $2.15 billion acquisition of privately-held Thrive Earlier Detection. Thrive has developed a blood screening test for the early detection of a number of different cancers, and the potential market for such products is astronomical. Interestingly, the company's blood tests—assuming the advances continue—would probably start encroaching on Cologuard's turf soon. Another reason the acquisition makes sense. For all its promise, Exact Sciences has yet to turn a profit. While its shares are grossly overvalued at $129, keep an eye on the firm—eventual profitability and a more reasonable share price will equal a nice buy point. |
|
ICAD
|
Under the Radar: iCAD Inc
(14 Aug 2020) iCAD Inc (ICAD $10) is a micro-cap ($238M) growth company in the Life Sciences Tools & Services industry. The New Hampshire-based firm, which has been in business since 1984, provides cancer detection and radiation therapy solutions and services. The company offers a range of upgradeable computer aided detection (CAD) solutions for the detection of breast, prostate, and colorectal cancers. Its Xoft Axxent system delivers high dose rate, low energy radiation to target cancer while minimizing exposure to surrounding healthy tissue. Based on its success, the Axxent system is now additionally being deployed for the treatment of non-melanoma skin cancer. Shares of ICAD topped out at $15.31 in March, leading into the pandemic-driven downturn. |
|
PMH
|
Psychemedics Corp
PMD ($7-$9-$20) Class: Micro-Cap Value Sector: Health Care Industry: Life Sciences Tools & Services |
Under the Radar Investment: Penn Wealth Report, Vol. 7, Issue 06
Psychemedics Corp is a $52 million, US-based diagnostics testing company which provides services for the detection of drug abuse through the analysis of hair samples. The company has a patented technology which "digests" the hair and releases trapped drugs without destroying them. Its tests provide quantitative data indicating the amount of drug ingested and the historical pattern of drug usage by an individual over a longer period of time. In 2018, PMD recorded a net income of $4.58 million on $42 million in sales, and has turned a profit every year for the past decade. Shares of PMD offer investors a 7.64% dividend yield based on the current share price of $9.42. |
|
EXAS
PFE |
Exact Sciences jumps by 30% on Cologuard deal with Pfizer. (22 Aug 2018) Shares of diagnostics and research firm Exact Sciences Corp (EXAS $37-$65-$72), maker of the Cologuard cancer screening test (and that cute little talking box from the commercials), surged 30% following the announcement that the company was teaming up with Pfizer (PFE) to promote DNA screening. Under the terms of the three-year deal, Pfizer will co-promote the Cologuard test beginning in the fourth quarter. In return, Exact Sciences will share a portion of the gross profits from the sale of the kits and pay some of the marketing expenses incurred. There are few things that a man over 50 wants to do less than get a colonoscopy, which is why this sort of DNA testing will continue to become increasingly popular. Shares of EXAS have been all over the place during the last few months, hitting a high of $71.60 in June, followed by a bottoming-out at $47.85 in early August, and then the current run-up to $65 today.
|
|
Theranos
|
Former high-flying CEO of Theranos charged with massive fraud by SEC
(15 Mar 2018) She was on the cover of magazines and heralded as the new medical superstar; now, Theranos CEO Elizabeth Holmes, whose net worth was once touted at $4.5 billion, is worth zero (according to Forbes) and is being charged by the SEC with massive fraud. Holmes' blood-testing company seemed to offer a panacea: one simple blood test could predict a host of ailments from a simple drop of blood. The company had contracts with the likes of Walgreens (WBA), and the sky seemed to be the limit. Then, after one of the company's labs was uncovered for faking results, the roof caved in. The sad fact is, Holmes honestly believed in the work her company was doing, and her intelligence (she was a President's Scholar at Stanford) was never in question. The pressure to produce results, however, led the company to make the unforgivable choices. If they hadn't falsified the results and stretched the truth about a US military contract, they may not have attracted the same level of investment, but they would still be in business, and Ms. Holmes' net worth would not be zero. |
|
Alzheimer's
screening |
New Alzheimer's blood test could detect the disease decades before symptoms arise
(05 Mar 2018) While no cures or vaccines exist for Alzheimer's, a new blood test being developed could identify the disease's onset decades before an individual shows any symptoms. Last summer, researchers at Washington University in St. Louis completed a study showing that a simple blood test could identify the presence of a sticky protein, called amyloid beta, in the brain. An accumulation of these plaques in the brain is believed to be a major factor in the disease's formation and development. Two months ago, a joint Japanese/Australian team published a study about a blood test showing a 90% effectiveness rate in identifying the nefarious protein. The test uses mass spectrometry to detect the amyloid beta. The blood test would represent an enormous milestone on the road to eliminating the disease. |
|
Cancer
screening |
Researchers working on a $500 blood test which could detect eight types of cancer before symptoms arise
(23 Jan 2018) A group of scientists and researchers led by a team at Johns Hopkins School of Medicine are working on a revolutionary new blood test which could identify eight different types of cancer before any symptoms have become evident. The new blood test, called CancerSEEK, would cost just $500 and would look for target cells from lung, breast, ovarian, and colorectal cancers, among others. While the test has proven very effective on a study group of over 1,000 volunteers known to have a form of the disease, it also effectively ruled out nearly the same number of healthy individuals. In other words, the rate of "false positives" were much lower using CancerSEEK as compared to conventional detection methods. For five of the eight types of cancer detected by CancerSEEK, there are currently no screening tests available. The next step? A new, large-scale trial using up to 10,000 healthy individuals. If this trial goes as expected, CancerSEEK will be well on its way to becoming commercially available. For more information, visit Johns Hopkins School of Medicine. |