Strong Revenue Growth in the $6 Billion Biological Sample Preparation Market

REDONDO BEACH, CA / ACCESSWIRE / November 13, 2015 / Biological sample preparation may sound like a commoditized industry, but the $6 billion market serving 500,000 scientists across 80,000 research labs is ripe for innovation. With traditional technologies like blenders or freeze-thaw cycles employing mechanical disruption, current sample preparation methods are a bottleneck for researchers in terms of the number of samples that can be prepared at any given time and the reproducibility of the results generated by these processes.

Pressure BioSciences Inc.’s (OTCQB: PBIO) Pressure Cycling Technology – also known as its PCT platform – could significantly improve upon the process of biological sample preparation. By using constant and alternative hydrostatic pressure cycling that doesn’t alter the sample itself, the company’s patented technology is capable of helping to analyze thousands of biomarkers in small diagnostic samples and achieve highly reproducible results.

The technology has broad applications across many different markets, ranging from personalized medicine, where it can help analyze tissue biopsies from cancer patients, to food science, where it can help to determine the microorganism diversity of soil for successful crop growth. With over 250 installations in 150 marquee laboratories, the company has already cultivated a growing worldwide user base of key opinion leaders that it continues to monetize with the sale of consumables that are used with the company’s instruments.

Accelerating Growth

Pressure BioSciences reported record revenue that grew 55.8% to $580,334 during the third quarter of 2015, driven by a 29.2% increase in product sales, comprised primarily of instruments and consumables. In addition, the company reported grant revenue from its SBIR Phase II grant from the NIH that provides non-dilutive financing to support the development of a high pressure-based system for preparation of DNA samples for next generation sequencing.

Looking forward, the company management team believes that it has reached a key inflection point and 2016’s performance will greatly exceed 2015’s record results. The company’s near-term goal is to grow revenue to an annualized $2 million run rate, which prompted SeeThruEquity analysts to issue a $1.57 per share price target on the stock – a significant premium to the current price of just $0.26 per share, as of trading on November 12, 2015.

Despite the company’s growing revenue and gross profit since the 2008 financial crisis, the stock price has moved lower over the years to depressed levels. Investors may want to reconsider the company given its $5 million private placement to shore up its balance sheet, reduction of convertible debt overhang, and ongoing improvement in revenue and margins as it enters new markets with its innovative PCT platform.

Vertical Market Expansion

Pressure BioSciences has begun focusing on vertical markets in order to fuel its rapid growth. By targeting these vertical markets, the company promises to expand its focus from generic research laboratories to higher margin targeted industry segments.

In October, the company announced a partnership with Florida International University to develop an improved rape kit test method based on its PCT platform. Rape kit tests are a largely manual process right now, which has contributed to a backlog of over 400,000 kits in the U.S. alone. The company’s PCT technology can decrease processing times and increase efficacy, while using inexpensive reagents on a semi-automated platform.

The company could similarly enter a number of different vertical end markets over time. For instance, management could develop vertical-specific hardware technologies like PositiveID Corp.’s (OTCQB: PSID) Firefly Dx, which is designed to detect pathogen outbreaks or bioterrorism agents in emergency situations. Many industries could utilize technologies like these, such as the agricultural or food science industries, with a simple path to market.

On the other end of the spectrum, the company could target biomarker discovery markets that have longer regulatory pathways, but perhaps greater long-term potential. Companies like NanoString Technologies Inc. (NASDAQ: NSTG) have built $250+ million businesses atop identifying molecules in a biological sample (with fluorescence in their case). Using its patented platform, the company could help to provide similar identification using pressure cycling.

Looking Ahead

Pressure BioSciences is uniquely positioned for a turnaround moving into 2016. In addition to selling biological sample prep technologies, in the same markets as firms like Harvard Biosciences Inc. (NASDAQ: HBIO), the company continues to pursue niche end markets with higher margin technologies. These efforts have all contributed to solid top-line growth, with double-digit acceleration in its high visibility, high margin consumables division.

For more information, visit the company’s website at www.pressurebiosciences.com.

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SOURCE: Emerging Growth LLC

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