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Members,
The biotech industry has kept its promise for solid returns so far. The rally in some major biotechnology indexes reflects the same. In this context, the NASDAQ Biotechnology Index has returned 17.6% year to date. Following the trend, S&P Biotechnology Select Industry Index has returned around 29%.
With time, biotechnology is emerging as a favored sector for investors with some risk appetite and looking for attractive returns.
We've just identified a small-cap biotech company with NASDAQ aspirations, zero debt, and several promising treatments in their pipeline.
Please turn your immediate attention to PRED (Predictive Technology Inc.).
PRED operates through four segments:
Predictive Biotech
Predictive Laboratories
CellSure
Predictive Labs
The Predictive Biotech ( PB ) segment launched four products in 2017 and is currently generating quarterly revenues in excess of a $40 million annual run rate. Predictive Laboratories (PL) launched ARTguide™ in October 2018 for detecting genetic issues that may impact female fertility, including endometriosis and Fertility Dx in November, which adds a chromosomal microarray to the ARTguide diagnostic. In the future, PL will be responsible for advancing new candidates through the regulatory process. The third operating segment, CellSure ( CS ), is responsible for obtaining the source material for the cellular therapy segment. The fourth segment is Predictive Labs (PL) and was created with the acquisition of Taueret Laboratories in March 2019. PL will launch genetic tests for endometriosis and degenerative disc disease in the coming quarters.
Zacks Slaps on $8.00 Price Target
In their latest independent report, Zacks Small-Cap Research recently slapped a $8.00 price target on PRED , which equates to an upside of roughly +74% from today's alert price!
About Predictive Technology Group, Inc.
Predictive Technology Group aims to revolutionize patient care through predictive data analytics, novel gene-based diagnostics and companion therapeutics through its subsidiaries Predictive Therapeutics, Predictive Biotech, and Predictive Laboratories. These subsidiaries are focused on endometriosis, scoliosis, degenerative disc disease and human cell and tissue products. The subsidiaries use genetic and other information as cornerstones in the development of new diagnostics that assess a person's risk of illness and therapeutic products designed to identify, prevent and treat diseases more effectively. Additional information is available at Predtechgroup.com; Predrx.com; Predictivebiotech.com; and Predictivelabs.com.
Key reasons to own PRED shares:
Pursuing a near-term NASDAQ listing
Rapidly growing cellular therapy segment
Competency in cell and tissue processing
Cash flow from Biotech supports development activities in Therapeutics
Advance of cellular therapy candidates through regulatory approval process in Therapeutics
Library of 300,000 DNA samples and 31 million-individual genealogy database
Multiple new products launching in the Laboratory segment
ARTguide
Fertility Dx
ENDORisk
Transform CellSure into dominant source of tissue product for both internal and external markets
Development platform that can be applied to many genetic tests and cellular therapy applications
The Bullish Case for PRED
Predictive Technologies is growing in a number of underserved areas of the market including cellular therapy and women s health, initially entering the market in the fertility health space. More specifically, the company emphasizes clinical categories of endometriosis, scoliosis, degenerative disc disease and regenerative human celland tissue products. The common theme that connects currently commercialized products is their reliance on the self-pay market. This is an attractive space as products do not require time consuming approval by formularies or face restrictions by managed care or pharmacy benefit managers that create a barrier between product and patient and layer on substantial distribution costs. Success in cellular therapy and fertility health are expected to support efforts to advance many of the in-development medicines and services through the regulatory process.
In contrast to many development companies, Predictive is free cash flow positive, which provides funds for new launches, research and development efforts and sales initiatives. While we expect the company will consume the majority of operational cash generated to support growth in the sales force for both cellular therapy and genetic diagnostic tests, we see less reliance on capital markets for the company to achieve its objectives than a pure development company.
Both cellular therapy and genetic diagnostic tests are emerging areas in the health care space. For companies that can source, process and provide high quality medicines to the physicians who administer them, there is substantial opportunity. The same goes for genetic diagnostic tests that are developed and backed up by a genealogy database that can accelerate genetic discoveries. Predictive ownership of a proprietary genealogy database with over 30 million individuals and greater than 300,000 DNA samples provides a valuable resource that can isolate genes that are implicated in disease and generate tests that are highly accurate.
Predictive has identified a growth plan for each of its four segments. Predictive Biotech will continue to grow Section 361 product, which does not make any efficacy claims while Predictive Therapeutics will pursue Section 351 products that require review and approval from the FDA. CellSure will focus on procurement of tissue, optimizing cell yields and quality and offering storage services for new mothers. Predictive Laboratories, which was created and expanded through the acquisition of Taueret, will continue to develop and commercialize genetic diagnostic tests.
PRED Plans to Uplist to NASDAQ
Predictive currently trades on the over the counter (OTC) markets and has submitted an application to the NASDAQ. The company received comments back from the NASDAQ in late May and expects to file responses in June. This action was preceded by the necessary prerequisite of filing of Form 10 in December 2018 and subsequent filings of the second and third quarter 10-Qs. The NASDAQ has several requirements regarding
number of shareholders, market makers, market value, asset value and share price among others. Predictive satisfies all of the requirements and may be uplisted to the exchange this month.
There are only a few days left in June, so a potential uplisting could trigger some significant FOMO. An uplisting to NASDAQ tends to signify a company that is experiencing strong growth.
Financial Results
Predictive Technology Group filed its fiscal third quarter 2019 financial statements on May 20, 2019 for the three month period ending March 31, 2019. The company reported revenues of $11.3 million, which was comprised almost entirely from the human cell and tissue products (HCT/Ps) segment. $10 thousand was generated in the Diagnostics and Therapeutics segment. Revenues increased 167% over 3Q:18 levels. After cost of goods sold, gross profit was $6.5 million, representing a gross margin of 57.7%. Total operating expenses were $9.2 million, a 61% increase over the prior year. Operating loss fell to ($5.0) million from ($4.8) million in 3Q:18 on increased headcount and higher research and development costs. On a per share basis, loss was ($0.01). Cash balance as of March 31 was $1.8 million and no debt was carried on the balance sheet . For the first nine months of the fiscal year, cash from operations was $3.1 million, a sharp improvement from the ($2.6) million deficit in the prior year. Property and equipment investments equaled $2.7 million, bringing free cash flow to $0.3 million for the first three quarters of FY:19. Cash from financing activities was $1.7 million, resulting in a net increase in cash over the nine months of $0.6 million.
Zacks is estimating strong revenue increases in the years to come.
2018 Full Year Actual - $16.6M
2019 Full Year Estimate - $42M
2020 Full Year Estimate - $66.7M
2021 Full Year Estimate - $97.2M
Source: Zacks Small-Cap Research Report
Latest News
Thermo Fisher Scientific and Predictive Laboratories Announce Global Infertility Research Collaboration
Studies aim to elucidate infertility genetics for development of noninvasive test to support decision making and improved outcomes for women pursuing fertility treatment
Last Wednesday, Thermo Fisher Scientific announced today that it has entered into a global research collaboration with Predictive Laboratories, a wholly owned subsidiary of Predictive Technology Group, Inc., (OTC PINK: PRED ) focused on studying the genetic factors underlying infertility in women. The work will utilize Thermo Fisher's various offerings for reproductive health, including Applied Biosystems CarrierScan Assay, Ion ReproSeq PGS Assay, CytoScan Dx Assay, and Ion AmpliSeq Exome RDY for whole exome sequencing.
Infertility has many potential causes, which may involve one or both partners. In some cases, no cause of the condition can be determined, leading the infertility to be described as "unexplained." The most common causes among women are irregular ovulation, blockage of the fallopian tubes, and endometriosis. The American College of Obstetrics and Gynecology (ACOG) reports that at least 40 percent of women with infertility have endometriosis.
Endometriosis occurs when the endometrial tissue that lines the uterine wall grows in other areas of the body outside of the uterus. While the symptoms are well-characterized, including pelvic pain, heavy periods, and pain during sexual intercourse or bowel movements, the disease is highly variable and many women have asymptomatic endometriosis, which has a significant impact on their fertility. The studies with Predictive Laboratories aim to elucidate the genetic basis of this condition, which is expected to more accurately define which women will experience infertility.
"Infertility among women who seek to conceive has become an increasingly common condition, which leads to much frustration and financial burden as they seek alternative solutions," said Bradley Robinson, CEO of Predictive Technology Group. "Our collaboration with Thermo Fisher brings together our innovative research and development capabilities with market-leading next generation sequencing technology to better understand the genetics of infertility for future development of a diagnostic solution."
Worldwide, around 70 to 80 million couples currently experience infertility, which causes significant depression, anxiety, and loss of work productivity. The ability to identify women who will experience trouble conceiving will allow for early intervention and personalized treatment planning that may result in fewer cycles to achieve a successful pregnancy.
"We look forward to this exciting and important work with Predictive Laboratories to better understand infertility in women," said Yan Zhang, general manager, reproductive health at Thermo Fisher. "With the combination of our partner's expertise and our advanced solutions for genetic analysis, we are committed to reducing the future financial and emotional burden couples face while undergoing fertility treatment."
Market Outlook:
Endometriosis affects an estimated 200 million women worldwide6 and is frequently misdiagnosed, preventing its early and proper treatment
30-50% of women with endometriosis may experience fertility issues
One of the leading causes of female infertility
Worldwide, around 70 to 80 million couples currently experience infertility, which causes significant depression, anxiety, and loss of work productivity. The ability to identify women who will experience trouble conceiving will allow for early intervention and personalized treatment planning that may result in fewer cycles to achieve a successful pregnancy.
No effective non-surgical method to diagnose
No therapeutic cure
Technical Analysis
We've done our very own chart analysis and see the potential for a move of over +121%.
Perfect Wave 3 target to the 1.618 fibonacci extension now ready to target 2.618 fibonacci for wave 5
The Bottom Line
In our opinion, PRED has all of the characteristics of a winner in both the short and long term.
Strong Revenue Growth
Plans to uplist to the Nasdaq exchange
ZERO Debt
Strong Product Pipeline
Bullish Technicals
As such, we ask that all members start their research on PRED immediately, and consider building a position tomorrow morning at 9:30AM EST
(*Remember to use a Stop-Loss Order or basic Limit Order to protect your gains, as well as limit possible losses.)
