Zacks Research Report: BSEM Continues to Exceed Expectations
11/13/2024
OTC:BSEM
READ THE FULL BSEM RESEARCH REPORT
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.
The company released its 3Q2024 financial results, which continued to impress. Revenues for the quarter bested estimates at $82.6 million and the gross profit margin moved to 95% from 91% in the year ago period. Net income was $0.32 per share, up from a loss a year ago and also above analyst estimates. This release continues a string of better-than-expected results as company management continues to hit on all cylinders.
The company continued to release positive news throughout the quarter just finished, both for investors and patients. BSEM released study results that showed the company’s signature technology, BioREtain, showed superior performance over the traditional standard of care. According to the company, in this study, researchers conducted a retrospective analysis to evaluate the effectiveness of a sterile, dehydrated amnion/chorion membrane processed using a proprietary method (BioREtain-AC) compared to a cohort of patients treated with standard of care measures in healing hard-to-heal diabetic foot ulcers in a real-world environment. A total of 21 subjects met the study’s inclusion criteria, which included factors such as wound type, medical history, and previous treatment involving the BioREtain-AC placental membrane product. The wounds in the study were considerably larger than those typically included in randomized controlled trials, averaging nearly 14 cm², compared to an average wound size of about 5 cm² in most trials. The study demonstrated that patients treated with BioREtain experienced an 8.53% higher probability of achieving full wound closure compared to the standard of care group after 12 weeks. For those wounds that did not achieve complete closure, the BioREtain group still showed a 93.6% improvement in expected area reduction, while the standard of care group stalled or grew larger.
The company launched a trial for diabetic foot ulcers and is preparing to launch a test for venous leg ulcers. CEO Jason Matuszewski noted, “These studies are critical to demonstrating the clinical superiority of BioStem’s products over existing treatments and will be instrumental in expanding payer coverage across commercial plans, Medicare Advantage, and Medicaid.”
Also likely helping to boost sales was the company’s announcement that the Center for Medicare Services has established a national pricing for the company’s product Vendaje AC. Mr. Matuszewski notes that, “With CMS’s national pricing approval, Vendaje AC is now accessible to more patients across the country.”
These announcements further our belief that BioStem is a company worth paying attention to and that BSEM has solid upside potential. Additionally, we continue to be impressed with the leadership of BioStem, headed by CEO Jason Matuszewski, which has remained confident in its products and science, while also focusing on getting the improved solution out to patients and accelerating commercial growth—as is demonstrated by continuing to test its proven technology and expand the availability of the company’s treatments.
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 products and the focus they are using to deliver results are encouraging and are now being rewarded by increased demand. As such, we urge investors to take a good look at BSEM.
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