(MENAFN- ProactiveInvestors - N.America) (OTC:PBIO) is expected to become profitable in 2015, according to a report written this month from AMI Research, which chose the company as one of its five favourite stock names in the micro cap sector that offer the "most promise for growth in 2014".
The life sciences medical device company develops and commercializes pressure cycling technology (PCT)-based instruments and consumables. The platform technology cycles pressure between ambient and ultra-high levels at controlled temperatures to control the interactions of bio-molecules, with the technology also used for genomic, proteomic and small molecule sample preparation.
The company, according to AMI, is the only player it knows employing this patented technology, which delivers "quality, speed and reproducibility previously unavailable to the industry".
The research report lists several growth catalysts for the company this year, saying that last year's third quarter was an inflection point, when Pressure BioSciences achieved record quarterly total revenue, quarterly products and services revenue and an all-time high in quarterly consumable product sales.
The analysts said they expect the fourth quarter to be the fourth straight quarter that total revenue exceeds the prior year period, with estimated total revenue of $0.27 million
AMI wrote the highlights for the company still remain the leveraging of "two recent breakthroughs", with the research firm referring in one instance to the announcement in June of its ability to process high throughput multi-well plate formats, which will integrate with current laboratories. This means it can focus on labs that need devices able to host multiple samples, simultaneously, whereas up until now, PCT was used for the analysis of only one sample at a time.
In addition, in another potentially significant breakthrough, the company revealed independent studies from Harvard University showing its PCT technology can offer a "non-invasive" approach to lipid analysis in the gastrointestinal track. The method uses PCT and certain chemicals to extract intact lipids from fecal material, getting information about what is happening in the GI system, which has a direct relation to a number of diseases such as colon cancer and IBD
"Both breakthroughs are win-wins for PBIO and have the potential to transform PBIO's operations. We expect to have a revenue-producing product before the end of 2H:14," wrote AMI.
Indeed, the research analysts predict total revenue to grow at a four-year CAGR of 37%, and expect $1.4 million, $2.4 million and $3.5 million in 2013, 2014, and 2015, respectively.
They also took note of the company's broad customer base, including academic laboratories, government agencies, and biotech, pharma and other life science companies in the U.S. It also has agreements with over 11 distributors worldwide, up from three in 2011. There are over 140 customers who have purchased or leased the PCT platform.
"In our opinion, the sharp increase in outreach supports management's commercialization initiative and reinforces our estimates," AMI said.
AMI is modelling profitability for Pressure BioSciences in 2015, expecting 44% top-line growth over 2014's $2.4 million estimate, as commercialization efforts begin to shift the company out of development-stage to the beginnings of a "true global player". Specifically, the analysts anticipate operating expenses to begin to level off during the second half of 2015, resulting in profitability during the fourth quarter of next year.
The other four micro cap names in AMI's report include NeoGenomics (NASDAQ:NEO), ADvanced Medical Isotope (OTC:ADMD), Net Medical Express (OTC:NMXS) and Exactech (NASDAQ:EXAC).
"Many of our choices are undervalued relative to their peers comparing a variety of metrics such as p/e, p/s, ev/ebitda, etc. Some stock picks have returned to our list from last year, as we continue to expect strong stock appreciation," AMI wrote.
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