Progenity Inc. (NASDAQ: PROG) is a biotechnology company that develops and commercializes molecular testing products to improve the diagnosis and treatment of disease. It focuses on fields like women’s health, gastrointestinal health, and oral biotherapeutics. Now trading at $.88, PROG stock, was one of the best penny stocks on robinhood last year despite dropping from its IPO price of $14 per share to below $1. This was largely because it became one of the most popular reddit penny stocks in September – triggering a roughly 518% rally for PROG stock. On the verge of changing its name to Biora Therapeutics (NASDAQ: BIOR), BIOR stock is now one of the cheapest penny stocks on Robinhood 2022.
PROG Stock News
PROG has long had a vision of transforming healthcare by improving diagnosis of disease and patient outcomes through localized treatment with targeted therapies. In light of this, the company is focused on developing its main biotherapeutics pipeline. As a part of its strategic plan, the company recently announced the closing of its affiliate business – Avero Diagnostics – through an asset sale valued at $10.9 million. This decision will raise capital needed for the biotherapeutics pipeline and will result in an almost $28 million reduction in the company’s operational expenses. In light of this, CFO Eric d’Esparbes appears confident that this “should extend our cash runway beyond the end of 2022 and reduce our dependence on the capital markets”.
Recently, PROG has been making major progress in part due to its developing biotechnology. One of the biggest challenges in the treatment of gastrointestinal diseases like IBD is delivering the medication directly to the colon. Luckily, PROG has made advances in its Drug Delivery System (DDS) to deliver liquid drug formulations to specific locations in the gastrointestinal tract. This is believed to improve the efficacy and safety of the treatment but is also a potentially lucrative breakthrough for the company.
Typically, delivering large molecule medications in a targeted approach would require needles. But PROG’s needle-free delivery system could allow for more frequent oral administration and possibly more consistent drug levels. With this in mind, Progenity is developing “drug-device combination products” which are formulated using its proprietary liquid formulations to replicate prescribed drugs that can be delivered through its oral biopharmaceutical delivery system.
With the delivery of large molecule treatments orally, PROG could open the door to treating cancer, diabetes, and rheumatoid arthritis in a more convenient manner. Taking the first steps towards commercialization, PROG announced in mid-October that the US Patent and Trademark Office (USPTO) has issued four patents related to its delivery system for treating the gastrointestinal tract. More recently, the company secured an additional patent. According to General Manager, Matthew Cooper, it “covers critical methods for counting target molecules, obviating the need for sequencing”. Together, these patents add to the company’s already established portfolio of 180 issued patents and over 220 pending applications. To date, it is considered “one of the most robust ingestible device patent portfolios” according to PROG’s interim CEO – Eric d’Esparbes.
With these patents, the company could be well-positioned to capitalize on its Single-Molecule Detection Platform. Designed to eliminate the need for costly and complex sequencing, this platform enables tests such as noninvasive prenatal testing (NIPT) or liquid biopsy for cancer to be simplified and made more cost effective. The Single Molecule Detection platform could potentially be applied to several areas beyond nucleic acids – which would make it an important asset for PROG.
Clearly, this revolutionary technology could make PROG a significant buyout candidate – a speculation that has been supported by the company’s three collaborations with pharma companies for developing its Oral Biotherapeutics Delivery System. As the company itself reports, this illustrates “industry interest in the platform’s potential for the oral delivery of large molecules”.
Because of this technology’s applicability to many big pharma treatments, some are anticipating buyout interest from the likes of Pfizer, Abbvie, Amgen, NovoNordisk, or Eli Lily. For example, Pfizer’s medication “Xeljanz” – used to treat rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis – is generically known as Tofacitinib which Progenity has already completed research regarding its targeted delivery and potential for higher tissue absorption.
According to its clinical publication, the study showed that over 25x more Tofacitnib was administered to the target location while reducing the number of total toxins compared to the typical treatment. This has led some investors to speculate that Progenity has a partnership in the works with Pfizer; but even if it does not, the company has the type of breakthrough technology that would attract interest across the board.
PROG’s DDS system is particularly applicable to the treatment of ulcerative colitis which makes up valuable segment of the healthcare market. Pfizer has already shown interest in innovative treatments for this condition after buying Arena Pharmaceuticals for $6.7 billion with an unapproved Phase 3 drug for ulcerative colitis.
Many are anticipating that an update from PROG will demonstrate the efficacy of drugs delivered through the DDS device. If its DDS delivery system is proven to be more effective than traditional methods then PROG will have an obvious edge in terms of safety, cost, and the long-term effectiveness of its therapeutic effects.
Meanwhile, short interest on PROG has reached 26.37% after a short squeeze effort started forming on Reddit in October. PROG stock has also regularly made Fintel’s list of top short squeeze candidates, but short interest has fallen to 12.17% of the float as short interest reaches 18.13 million shares. Overall, high conviction investors are holding out their long positions on PROG stock against shorts on the conviction that new PROG stock news would reveal a high profile partnership developing behind the scenes.
Fundamentally, PROG is showing significant progress after its latest earnings report revealed the company’s plans for cost-cutting measures that will save around $145 million on an annual basis. It also marginally reduced its operating expenses and has reduced its outstanding debt by $20.175 million through a private exchange of its 7.25% convertible senior notes.
*Updated April 27th
BIOR Stock News
Most of the momentum behind the Robinhood penny stock’s previous rally was driven by its potential for a short squeeze thanks to high short interest but BIOR stock has a number of fundamental factors which led analysts to give it a $4 and $5 price target. Analysts at H.C. Wainwright and Piper Sandler cited the company’s potential thanks to its developing treatment – Preecludia – which is meant to be a rule out test for a syndrome of pregnancy known as preeclampsia. While the company is still developing its clinical development strategy, BIOR has other treatments underway which could drive BIOR stock to become one of the best penny stocks on Robinhood 2022.
Currently developing its Drug Delivery Systems (DDS), BIOR aims to treat gastrointestinal diseases by delivering the medication directly to the colon. This technology could be a breakthrough for the company because it could be more effective than other treatments. With this in mind, BIOR is currently advancing its studies to test the functions and safety of its DDS capsule.
In its initial testing, DDS reached the colon efficiently in 10 out of 12 subjects and was well tolerated by patients after the drug payload was ingested.. Given the effectiveness of this treatment on healthy subjects, BIOR is now enrolling patients with active ulcerative colitis to continue studying DDS’ potential.
This study will bring the company a step closer to starting clinical trials for its PGN-600 program which aims to deliver treatments directly to the site of disease in ulcerative colitis patients. With phase 1 of clinical trials expected to start in late 2022, conducting more studies on DDS could lead to new updates from the company.
So far, the company has slimmed down its operations and bolstered its financial position as it attempts to sell off products like Preecludia and its single molecule detection system platform through an advisory consultant firm. This has allowed BIOR to focus on DDS and its Systemic Oral Biotherapeutics Delivery System (OBDS) which many shareholders believe could result in a huge payoff thanks to its applicability to various diseases.
By delivering large molecule treatments orally, BIOR’s DDS2 and OBDS could deliver monoclonal antibodies, vaccines, cell, and gene therapies, as well as proteins which means it has the potential to treat cancer, diabetes, and rheumatoid arthritis in addition to diseases in the GI tract. This has caused some investors to speculate that – if BIOR’s treatments are approved – the company would more likely function as a pill manufacturer in the future.
Because of this technology’s applicability to many big pharma treatments, some are anticipating buyout interest from the likes of Pfizer, Abbvie, Amgen, NovoNordisk, or Eli Lily. This seems to be supported by the actions of BIOR’s largest institutional investor – Athyrium Capital Management LP – which first invested in BIOR during 2013 but began investing more heavily in BIOR stock in June of 2021. Despite its run up in November, Athyrium did not exit its position and instead has spread its investments in the company across various funds.
Given its preference for investing “in commercial-stage companies that sell products that have highly compelling clinical data”, Athyrium has a history of investing in companies that are acquired by other companies. Therefore, it stands to reason that Athyrium would not hold such a large position in the company unless it has high conviction that Progenity will become a profitable investment for it in the long-run. This theory is further bolstered by the firm’s Managing Partner – Jeffrey Ferrell – who has a seat on BIOR’s Board of Directors.
One example of BIOR’s buyout potential is provided by Pfizer’s medication “Xeljanz”, generically known as Tofacitinib, which is used to treat rheumatoid arthritis, psoriatic arthritis, and ulcerative colitis. Progenity has already completed research using Tofacitinib and according to its clinical publication, the study showed that over 25x more Tofacitnib was administered to the target location using DDS. This also illustrates PROG’s potential to become a pill manufacturer which might give BIOR higher revenue potential over time.
On that note, PROG decided to change its name to better reflect its focus on the oral delivery of treatments. Its legal name is expected to become Biora Therapeutics, Inc. and the company would begin trading as BIOR stock after the name change goes into effect. This change comes ahead of the company’s Q1 quarterly report which is set to be released in May.
BIOR Stock Financials
According to its Q4 results, operating expenses were $20.6 million and its net loss was $92.9 million. However, at the end of December BIOR closed the business divestiture of Avero Diagnostics through an asset sale to Northwest Pathology totaling $10.9 million. According to the company, this sale reduced yearly OPEX by approximately $28 million – contributing to BIOR’s total reduction in annual operating expenses of approximately $145 million compared to Q2. BIOR’s CFO, Eric d’Esparbes shared that, “This reduction, along with capital raised, should extend our cash runway beyond the end of 2022 and reduce our dependency on the capital markets”.
In total, BIOR generated $74.3 million in revenues for 2021 and operating expenses of $119.1 million. Thanks to the $46 million raised in gross proceeds through warrant exercises, another $20 million raised through a registered direct offering, and $5 million brought in through its ATM program, BIOR has improved its liquidity position enough that its cash runway supporting clinical development programs has been extended into 2023
BIOR Stock Forecast 2022
As for its plans this year, BIOR will be establishing its device performance in healthy volunteers and ulcerative colitis patients for its PM-611 and PM-602 programs. These programs will take place throughout Q1, Q2, and Q3 before BIOR works on its preclinical toxicology for its targeted therapeutics. This will allow the company to proceed to its first clinical study evaluating the pharmacokinetics and pharmacodynamics of therapeutics delivered with DDS. At the same time, BIOR will be conducting its preclinical pharmacokinetics studies to evaluate how this “needle-free delivery of large molecules has the potential to improve drug efficacy and safety”. Following this, the company intends to pursue its clinical studies for systemic therapeutics at the end of the year.
Its efforts to reduce its non-affiliated debt by 38% and its substantially reduced cash burn are all signs that BIOR is in it for the long-haul – potentially waiting for a buyout offer with strong clinical results. As BIOR’s CEO recently shared, the company plans “to take one systemic therapeutic program forward to these later stages, which will show the broad applicability of the platform for use with many other existing and in development therapeutics.” For this reason, BIOR stock shareholders are bullish on the company’s long-term potential despite its beaten down price.
Bior Stock Short Interest & Options Flow
At the moment, short interest is 14.8% of the float but its off exchange short volume ratio is 49.97%. The current short volume of 20.65 million is almost equal to its volume at the end of October when its initial run up began. With 2.3 days to cover, many investors believe something could be brewing for BIOR stock ahead of its earnings report.
Using @unusualwhales option flow, its clear that bears are the majority. Despite call volume coming in at 95%, bearish premiums win out at 64.06%. Two whales bought puts with $17 thousand premiums with a far out expiration date of January 19th, 2024. Since BIOR stock is currently trading below $1 its not surprising that the options flow is showing little activity.
Considering its current low volume of 2.6 million it seems unlikely that a major announcement is expected in May. However some investors believe that a merger could be coming soon since the company brought Paul Shabram on board to lead Technical Operations for BIOR’s ingestible drug and device platforms – a move that hints at the applicability of BIOR’s DDS and OBDS to major pharmaceutical companies.
Media Sentiment
@Opt_news is bullish on BIOR stock’s long term potential with a price target of at least $20
@TRUExDEMON has been on BIOR for some time and noted the unusual sell off following its last earnings report as an opportunity
Technical Analysis
PROG stock price is currently $.88 – a new low for 2022. As the stock trades at its strong support level of $.85 formed in September 2021, its next level of support would be near $.65. However, its trend to the downside could indicate a rebound off of this strong support level and back to its weak resistance at roughly $1. Overall, PROG stock has no clear resistance and could push past $1 with a strong catalyst. The stock has a gap to fill between $1.50 and $1.58 which was created in the sell off at earnings.
The RSI is moving up from overselling at 40 and the MACD is bearish but approaching a crossover. Meanwhile, accumulation which was climbing at the start of April is slowly decreasing.
BIOR Stock Forecast
While BIOR missed earnings expectations with an EPS loss of $.56 – $.40 more than analyst expectations – its revenue was $185 thousand more than expected. In light of this, its sell of following earnings could be unnatural. Given its float of 165.4 million, the stock is prone to volatility and depending on the results of its earnings report in May, the stock could gain back some of the ground it lost. Overall, the stock’s current price is much lower than average and a correction could be due.
As is, Progenity has a market cap of $157 million, which could make it undervalued given its technology’s potential once commercialized. In the long term, BIOR has the potential for a buyout from a major pharma company like Pfizer, which could results in a major return on investment for shareholders. On the other hand, its technologies’ range of applications could lead BIOR to become a profitable pill manufacturer once its DDS or OBDS systems are approved.
Despite its IPO price of $15 per share, BIOR stock has been treading water for a while which is typical of clinical-stage biotech plays that move on binary events like FDA approval. Its worth noting that Raymond James analysts have lowered their price target from $55 to $42 for the stock which is a modest decrease considering the firm’s growth expectations for the company in the long term.
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