NEW YORK, NY / ACCESSWIRE / July 18, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Great Basin Scientific (GBSN).
The report is available here: GBSN Update Note.
Based in Salt Lake City, UT, Great Basin Scientific (OTCQB: GBSN, "Great Basin") is a molecular diagnostics company focused on developing and commercializing cost-effective molecular diagnostic testing for infectious diseases. The company's proprietary analyzers and cartridges are differentiated in the market by offering a cost-effective means to access next-generation molecular testing, while providing an attractive reimbursement profile for hospital and lab customers. Great Basin's sample-to-result, low-plex and mid-plex panels are sold by a direct sales force, primarily to small-and-medium sized hospitals, which have a need to replace less accurate testing formats to more accurate molecular diagnostic testing.
GBSN receives 510(k) FDA clearance for new stool bacteria pathogens panel
On July 13, 2017, Great Basin announced that it had received FDA 510(k) clearance for its new Stool Bacterial Pathogens Panel (SBPP) for foodborne illness. The announcement represents a significant milestone for Great Basin, and management expects the SBPP to be the flagship test for the company going forward. Great Basin's molecular test portfolio continues to gain critical mass, as the company now has six assays for bacterial targets with what management estimates is an addressable market opportunity of $1.75 billion in the US alone. Importantly the new SBPP tests are expected to have significantly higher ASPs than C. difficile, which should help the company's gross margin structure going forward.
SBPP clearance should serve as a catalyst for growing top line at Great Basin
We were impressed by the rapid growth in Great Basin's sales pipeline announced in its June 26, 2017, corporate update. The company stated that its pipeline grew by an impressive 120%+ in 1Q17 to reach $5mn, driven by its expanded test portfolio and demand for its new stool bacterial pathogens panel ahead of FDA clearance. With clearance obtained, we expect Great Basin to move aggressively to convert its existing pipeline, which included nearly $2mn in expected sales from nearly 50 customers evaluating the SBPP test. Additionally, we expect Great Basin to commence sales efforts for the SBPP test for foodborne illness immediately with its existing network of 230 small and medium sized labs and hospitals, as well as larger medical institutions.
$1.00 price target for Great Basin
We recently updated our price target for Great Basin to $1.00, and see the latest announcement of FDA clearance for the SBPP test as a significant milestone for the company and a catalyst that should drive future growth. Great Basin's stock has languished over the last two years due to toxic financings, and while we do see dilution risk as the company raises external funds to invest in growth, it appears from the company's accelerating pipeline and expanding portfolio that Great Basin is establishing itself as a very relevant multi-plex panel company in the rapidly evolving molecular diagnostics market. The target of $1.00 is based on an enterprise value to sales methodology, assuming a multiple of 5.5x the 2018E revenue estimate of $9.0mn, a multiple that is in line with molecular test industry peers.
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About Great Basin Scientific
Great Basin Scientific is a molecular diagnostics company that commercializes breakthrough chip-based technologies. The Company is dedicated to the development of simple, yet powerful, sample-to-result technology and products that provide fast, multiple-pathogen diagnoses of infectious diseases. The Company's vision is to make molecular diagnostic testing so simple and cost-effective that every patient will be tested for every serious infection, reducing misdiagnoses and significantly limiting the spread of infectious disease. More information can be found on the Company's website at www.gbscience.com.
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