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Thursday, October 29, 2020

HTG Molecular Diagnostics Inc (NASDAQ:HTGM) Explodes Higher on Sequencing Tech News

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HTG Molecular Diagnostics Inc (NASDAQ:HTGM) is a mico-cap biotech play in molecular sequencing that’s clearly begun to spur some interest among players in the marketplace in a big way to start this week. Shares of HTGM exploded higher on Monday in reaction to the company’s announcement that its new direct-target sequencing chemistry will be available in the company’s VERI/O laboratory as a service offering beginning in the first quarter of 2017.

According to the release, the new chemistry is designed for “direct sequencing of specified DNA and, in the future, RNA targets with the same high sensitivity and specificity as the company’s current HTG EdgeSeq chemistry applications.” The initial panel planned for the VERI/O laboratory will detect common mutations in the EGFR, KRAS and BRAF genes for retrospective research studies especially from small and difficult samples, such as formalin-fixed, paraffin-embedded (FFPE) tissue. The news hit like a lightning bolt, especially considering the extremely tiny float carried by the stock.

HTG Molecular Diagnostics Inc (NASDAQ:HTGM) trumpets itself as a company develops and markets technology platforms that facilitate the routine use of complex molecular profiling.

The company’s HTG Edge and HTG EdgeSeq platforms consist of instrumentation, consumables, and software analytics that are used in molecular profiling applications, including tumor profiling, biomarker development and prospectively, and molecular diagnostic testing.

HTG’s platforms automate the molecular profiling of genes and gene activity using its nuclease protection chemistry on various biological samples. It provides molecular profiling panels targeting late stage drug development programs with potential breakthrough therapies, such as immuno-oncology.

HTG Molecular Diagnostics, Inc. distributes its instruments and consumables directly in the United States and Europe; and through distributors or sales agents in parts of Europe and internationally.

The company was formerly known as HTG, Inc. and changed its name to HTG Molecular Diagnostics, Inc. in March 2011. HTG Molecular Diagnostics, Inc. was incorporated in 1997 and is based in Tucson, Arizona.

According to company materials, “Headquartered in Tucson, Arizona, HTG’s mission is to empower precision medicine at the local level. In 2013, the company commercialized its first instrument platform and a portfolio of RNA assays that leveraged HTG’s original proprietary nuclease protection chemistry. Continuous innovation promptly led to HTG’s first, now‑patented, sequencing-based chemistry and, in 2014, the company launched its HTG EdgeSeq product line, which automates sample and targeted library preparation for next-generation sequencing.”

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Management was obviously thrilled with the development, and provided some perspective on how it impacts the narrative for the company:

“We are very excited to be able to offer our customers this added service which, together with our prior service offerings, enables us to provide information on key DNA mutations as well as comprehensive gene expression RNA profiling, all from a single section of FFPE tissue,” said TJ Johnson, HTG’s Chief Executive Officer.  “We have completed our patent application filings and plan to leverage this new chemistry into multiple offerings, including DNA applications such as expanded DNA mutation panels, and detecting microsatellite instability and tumor mutational burden.”

“We are completing final preparations for launching the direct-target sequencing technology and an initial DNA mutation panel in our VERI/O laboratory, and plan to have this panel available to service customers for research uses by the end of this quarter,” added Byron Lawson, HTG’s Vice President of Commercial Operations.

We’ve witnessed 78% piled on for shareholders of the company during the trailing month, a bounce that has taken root amid largely bearish action over the larger time frame. However, HTGM has a history of dramatic rallies. What’s more, the company has registered increased average transaction volume recently, with the past month seeing above 820% beyond its prior sustained average level.

That’s huge considering the almost absurdly small float rattling around in the tape here – just 2.4M shares. That’s a deadly combination for shorts if the story starts to click, as it did to start this week.

Now commanding a market cap of $22.5M, HTGM has a significant war chest ($5.5M) of cash on the books, which is balanced by about $6.3M in total current liabilities. One should also note that debt has been growing over recent quarters. HTGM is pulling in trailing 12-month revenues of $4.9M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -9.6%. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $HTGM stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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