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BMRA: Optimistic About New COVID-19 Test

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By M. Marin

NASDAQ:BMRA

READ THE FULL BMRA RESEARCH REPORT

In response to the current global health crisis, Biomerica (NASDAQ:BMRA) has developed a high-volume rapid 10-minute point-of-care test for exposure to the COVID-19 virus. The test is easy to use and portable, which means that it can be used at point-of-contact locations at airports, schools, businesses and other high-traffic venues. Medical personnel and other trained individuals can use the test by obtaining blood from the patient through a finger prick.

BMRA has begun shipping in the EU following receipt of the required CE mark. We expect the company to leverage its existing distribution network to supply end-users. The speed with which the company came to market in the EU reflects the expertise it has developed through its core operations that enables BMRA to leverage the technology, in our view.

BMRA also seeks EUA-FDA approval for commercial sales in the U.S. pursuant to the FDA’s EUA (Emergency Use Authorization) process that is designed to accelerate the commercial launch of a test during an emergency such as the COVID-19 pandemic.

The high-volume production version of the COVID-19 test is intended for large customers that are performing a significant number of screenings on an ongoing basis. Given the unmet demand for COVID-19 testing, we believe the new test could be highly additive to BMRA’s top-line and to the bottom line, depending on margins once the company has ramped production.

Separately, following a private placement of $2 million of convertible preferred shares, BMRA had a cash balance of $2.4 million at February 2020, up from $686,785 at May 2019. Subsequent to the close of 3Q FY 2020, BMRA raised roughly $5.4 million, which implies pro forma cash of about $7.8 million at April 14, 2020.

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