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.
Investors are increasingly understanding our positive view of BSEM as the stock has experienced a rapid rise over the past year, but we believe the stock is still undervalued. The company released its 2Q2024 earnings results, which vastly exceeded estimates as revenue growth accelerated, and the company posted profits that exceeded our projections. Other details include:
• Revenues of $74.5 million represented a nearly 74-fold increase over the year-ago period.
• Margins remained at 95%, and management believes the company will be able to maintain that level.
• In the call following the announcement, the company also reminded investors that it has retained an experienced clinical research professional to lead BioStem’s Diabetic Foot Ulcer and Venous Leg Ulcer trials.
o These trials are an attempt to proactively address potentially changing reimbursement requirements by Medicare Administrative Contractors.
▪ Proposals have been made to sharply cut the number of approved treatments and, while the industry is largely fighting against such a drastic cut, BSEM is preparing for whatever decision ultimately comes down.
▪ The Institutional Review Board (IRB) approved a study evaluating AmnioWrap2 in diabetic foot ulcers, which the company believes will lead to an expansion of insurance coverage and greater commercial growth.
• The company posted another positive net income reading by earning just over $6.3 million.
• The company’s cash balance improved from just over $600,000 in 1Q to $6.6 million at the end of 2Q.
• The company also spoke about the uplisting of BSEM stock to the NASDAQ stock exchange and believes that process should be complete in the next 60-90 days.
These results are further evidence, in our view, that the medical community is increasingly realizing the benefits and superiority of the BioStem products and increasingly realizing the benefits patients can get from having access to those products. Our belief is that now that BioStem has a solid foothold in that tough to break into community, the acceptance and use of the company’s products will continue to accelerate as we’ve begun to see over the past couple of quarters. 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.
Summary
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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