BioStem Crushes Estimates
On Stellar Growth
New Price Target $9.25
By Brad Sorensen, CFA
BioStem Technologies, Inc. (OTC:BSEM) is a leading innovator focused on harnessing the natural properties of perinatal tissue in the development, manufacture, and commercialization of allografts for regenerative therapies. The company states its mission is “to discover, develop and produce the most effective regenerative medicine products in the world,” and we believe that the company is well on its way to achieving that goal—providing to investors what we believe is an opportunity to invest in a company that is both providing a vital service to the human population and providing economic value to shareholders when doing so.
BSEM announced its 3Q financial results today and the numbers were impressive:
The company also recently announced that one of its primary products, Vendaje AC, was issued a “Q” code from the Centers for Medicare and Medicaid Services. This code applies to drugs, biologics and medical equipment and services that are not identified by the national code needed for Medicare claims processing and allows these “Q” products to be reimbursed by Medicare.
Vendaje AC is intended for homologous use as a protective covering and comprised of dehydrated amniotic/chorionic tissue.
Additionally, the company announced in October that it was opening the first site for a clinical trial to evaluate its Vendaje tissue allograft in the treatment of diabetic foot ulcers. Management also announced a capital raise of $2 million that will bolster the company’s ability to facilitate the trial and continue to invest in grow.
These recent announcements reinforce our belief that growth is just beginning for BSEM and as a result we are raising earnings estimates and, in conjunction with the earnings beat this quarter and our raising of future years, raising our valuation target to $9.25.
We reiterate our belief the BSEM is still underpriced even after its recent move higher and continues to represent a good opportunity at recent prices for investors to get in before what we believe will be a more aggressive move higher in the not-too-distant future. The vision management has for the company’s product and the focus they are using to deliver results are encouraging and are now being rewarded by increased demand. As such, we suggest investors with a modestly higher risk tolerance take a look at BSEM.
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