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Insiders Load Up on PolarityTE

- By Kyle Ferguson

PolarityTE Inc. (COOL) directors Michael Beeghley and Jeffrey Dyer purchased a combined total of 28,052 shares of the company between March 28 and April 5.

Beeghley purchased 20,000 shares of the company for $13.36 per share on April 5. He now owns 20,000 shares of the company.

Dyer purchased 8,052 shares of the company in five transactions for an average price of $10.75 per share between March 28 and March 29. He now owns 8,052 shares of the company.


Headquartered in Salt Lake City, PolarityTE, formerly Majesco Entertainment Co., is the owner of patent applications related to regenerative medicine and tissue engineering. It also develops software applications used in diagnosis and treatment related to regenerative medicine.

The company seeks to gain regulatory approval for technology that utilizes a patient's own tissue for the regeneration of skin, bone, muscle, cartilage, fat, blood vessels and nerves.

PolarityTE has a market cap of $63.1 million, an enterprise value of $64.71 million, a current ratio of 3.22 and a Yacktman forward rate of return of 24.90%, ranking it above 80% of the companies in the Global Health Information Services Industry.

Today, PolarityTE announced the completion of a previously announced merger with Majesco Entertainment Inc. It acquired important intellectual property for regenerative medicine programs in the deal. The company will continue to trade under the Nasdaq symbol COOL, which previously belonged to Majesco.

Majesco had a big-hit game, Zumba Fitness, as well as several others. Gaming retail is a high variance, low expectation business.

New management took over in 2015 when the company was on the verge of bankruptcy. They decided to reorganize the company with the intention of making video games.

Management then decided it was better for shareholder value to have a new business that was regenerative.

The merger was announced on Dec. 8, 2016, but the company had to obtain shareholder approval, which occurred March 10. Mechanics of filing with the state closing conditions were met on April 6.

The company's first product to market will be SkinTE, which it is hoping will be launched in the next 12 months. SkinTE is a product that allows patients to have fully functional living skin, which encompasses the ability to grow hair and have sweat glands.

The company believes the market is addressable immediately and the board of directors is very confident about its pipeline.

Denver Lough, chairman and CEO of PolarityTE, expressed management's excitement about the closing of the merger, saying they believe it will help propel the company's goals and development.

"With a core team in place, and the acquired intellectual property, we intend to continue to grow our abilities and rapidly expand our portfolio while we seek to build this company in a radically new way, with the perspective of medical providers and patients driving our development -- a company built by surgeons for surgeons and their patients," Lough said. "Our regenerative medicine platform offers a solution to a host of unanswered problems, which we plan to use as a stepping stone to initiating change throughout medicine as a whole. We plan to lead the industry by setting an example."

Jim Simons (Trades, Portfolio) added to his stake in PolarityTE during the fourth quarter. Since then, the stock price has skyrocketed, gaining an estimated 325%.

Disclosure: I do not own any shares of this company.

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This article first appeared on GuruFocus.