GREAT BASIN SCIENT COM USD0.0001 (POST REV SPL(OTCMKTS:GBSN): What's Next?

GREAT BASIN SCIENT COM USD0.0001 (POST REV SPL(OTCMKTS:GBSN) just announced the completion of a clinical trial and the 510 (k) submission to the Food and Drug Administration (FDA) of its Bordetella Direct Test. The company has had a bit of a roller coaster ride of the last few months, and markets will likely be buoyed a little bit by the latest announcement, in that it suggests Great Basin is back to normal from a day-to-day operational perspective, and should be able to start driving value add throughout early 2017.Here is a look at what has happened recently, and where we think this company is going next.For those not familiar with Great Basin, the company is a technology company that focuses on molecular diagnostic testing for infectious diseases. Its primary focus is hospital borne infections, and it currently has two tests approved by the FDA – one for the clostridium difficile (C. diff) and another for Group B Strep. In our previous coverage of the company, we noted that – capital structure aside – Group Scientific's pipeline of additional tests would likely be the primary driver behind any upside momentum near term.Why? Because there is a large unmet need for these sorts of things. Current industry standard testing requires expensive, drawn out procedure and results are not instantaneous. The Great Basin tests aim to overcome these issues, and to date, they seem to be doing a great job of doing so. However, as is so often the case at this end of the biotechnology space, a great product is only part of the equation. Management hasn’t been great, and the necessity for repeated financing (and in turn, dilution) and a reverse split (with the latest hitting markets at the end of last year) has weighed heavy on the company, despite the seeming advantages of its diagnostics technology over current standard of care.Said mismanagement resulted in a (so-called voluntary) delisting, and the company is now OTC, which has further weighed on sentiment.So with all this in mind, how can we suggest that there might be some upside potential going forward? Well, while a great product is generally not enough to initiate long term growth in a company, it will often be enough to serve up some upside momentum as it jumps through hoops along the development and regulatory pathway. This one in particular, the diagnostics technology, is currently tied up in half a dozen trials, each of which is targeting a different infection for diagnosis. The Bordatella test mentioned in the introduction to this piece is just one example, and while the announcing of 501 submissions likely isn’t enough to bring sentiment around to buying mode, an FDA green light for commercialization on the tests will be.A green light would open up the potential for a revenue boost, and for a company in this situation, a top line push is exactly the sort of thing that is going to be required to steady the ship, and put Great Basin on a longer term recovery course.There's also the potential for a buyout. Great Basin's technology works, all management issues aside, and at the company's current market capitalization, would make for a steal for a company with any cash on hand looking to pick up an easy entrance to this space.Bottom line, it's a very risky one to pick up an exposure to, given the history of mismanagement. As a speculative allocation, however, and one that won't break the bank if it runs to zero, it offers a decent reward profile.We will be updating our subscribers as soon as we know more. For the latest updates on GBSN, sign up below!Disclosure: We have no position in GBSN and have not been compensated for this article.