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Constituent Review
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J. Andrew Braswell, Equity Analyst
Newbridge Institutional Research
Data as of 3-30-07 |
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Nano
Biotechnolgy |
Review
2/05/07- In an 8-K filing, NGEN disclosed that it had entered into an agreement to sell shares to institutional investors. The company will sell 4.92M shares and warrants to purchase 983K shares for net proceeds of approximately $7.2M.
2/20/07- Reported Q4 results at the close. Revenue for the quarter was $8.7M (+181% Y/Y), including $5.1M (+329% Y/Y) in product sales, with growth generated primarily from acquisitions made during the year. The net loss was $11.2M, or $0.17 per share, wider than the Q4/05 net loss (ex items) of $10.7M, or $0.20 per share. NGEN’s cash position ended the period at $25.2M, though the company subsequently issued an additional $7.5M of common stock. For 2007, NGEN is targeting Y/Y revenue growth of at least 50%.
2/28/07- Announced that it was issued four patents by the USPTO for inventions related to biomarkers for diabetes and Alzheimer’s disease. Patents titled, “Complement C3 precursor biopolymer makers indicative of resistance,” and “Betaine/GABA transport protein biopolymer marker indicative of insulin resistance” pertain to the use of mass spectrometry and time-of-flight detection techniques in the diagnosis of, or development of therapeutics for, the metabolic conditions Syndrome X and type II diabetes. Patents titled, “Fibronectrin precursor biopolymer markers indicative of Alzheimer’s disease,” and “IG heavy chain, LG kappa, IF lambda biopolymer markers indicative of Alzheimer’s disease” relate to the identification of biomarkers for Alzheimer’s disease.
Commentary
NGEN was at the bottom of NNIX constituents with a -32% Q1 return, as the stock hit a multi-year low of $1.21 in mid-March. The company reported strong revenue growth driven by acquired products again this quarter, but managed to reduce its cash burn through the recent consolidation measures. Modified EBITDA, a metric the company uses to adjust net income for non-operating items like options expense and minority interests, was improved by 14% Y/Y to $6.3M. With $25.2M in cash on hand at year end, it may seem curious that the company sold another 4.9M shares of stock in February. But having burned $38.4M in cash in 2006, up from $34.6M in 2005 and $29.5M in 2004, management may need that cushion to keep the company afloat past the end of this year if unable to further bring down its expenses. |
