Shares of Pressure BioSciences (OTCQB:PBIO) surged on Thursday after the company received a 12-month price target from Merriman Capital analyst Paul Resnik that was almost three times its current market valuation at the time the report, released today, was written.
Resnik initiated coverage of the life sciences company with a speculative buy rating, and a 12-month price target of 70 cents, up from its closing price of 23.5 cents on Wednesday, and its 29 cent share price this afternoon.
The company, which is developing its pressure cycling technology (PCT) platform for multiple applications, is focused on the development, marketing, and sale of proprietary laboratory instrumentation and associated consumables based on PCT, for such markets as forensics, biomarker discovery, biotherapeutics, vaccine development, histology, counter-bioterror uses, and more.
The technology works by using cycles of hydrostatic pressure between ambient and ultra-high levels to control biomolecular interactions for the sample preparation market.
"Although sales progress has been gradual up until now, the company has expanded the portfolio for PCT to encompass a diverse crosssection of biological applications, and it has now developed high throughput capabilities that should open up important new markets," wrote Resnik in his report.
"We believe Pressure BioSciences is positioned to achieve accelerating sales growth."
Indeed, in June, the company said it had a new high throughput (NYSE:HT) design for its patented PCT that would integrate its platform with the automated HT sample preparation and analytical system formats installed in thousands of research labs globally, lending potential to accelerate growth in existing and new PCT-based applications and products, as well as in its ability to attract new strategic partnerships and its overall revenue ramp-up.
"PCT has been proven to be a superior sample preparation technology, often enabling researchers to isolate proteins, lipids, and DNA that would otherwise elude them and reach valuable findings that would otherwise not been possible," noted the Merriman Capital analyst.
"However, the manual characteristic of the PCT process has prevented Pressure Bio's technology from making inroads in a large part of its potential market where subsequent steps are highly automated."
Now that this obstacle has been removed from Presure BioSciences' path, the company can benefit significantly from recent momentum its technology has received. Earlier this month, it announced that additional data, presented at the 27th annual symposium of the Protein Society held last month in Boston, helped support the use of the company's PCT platform for generating information on proteins that other methods can't.
In emailed comments at the time, the company's CEO, Richard Schumacher, said this should result in additional sales of PCT systems as other scientists will also want to have this advanced tool, resulting in better diagnostics and therapeutics globally.
To accomplish its goals, Resnik said the company will need to initiate a "more effective" marketing program and successfully raise additional capital as it moves toward profitability over the next two years. "Importantly, Pressure Bio's small internal sales team has been buttressed over the past by the use of external distributors. This effort has been strengthened over the past year and a half by significant new distributorship agreements.
"We believe the company's earnings have the potential to grow five-fold over the next two years," the analyst concluded in his report.
Shares of the company were rising by more than 23 per cent today, extending year-to-date gains to 45 per cent.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.