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BioCardia Inc (OTCMKTS:BCDA) Has Proven One Of 2016's Top Small Cap Biotech Picks

BioCardia Inc (OTCMKTS:BCDA) Has Proven One Of 2016's Top Small Cap Biotech Picks
Written by
Chris Sandburg
Published on
December 29, 2016
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BioCardia Inc (OTCMKTS:BCDA) is running up right now. The company traded for a little over $0.77 a share at last close, up more than 860% on its 2016 open, and more than 600% on the final quarter of the year alone. Here at Insider Financial, we've highlighted the stock as being one to watch on a couple of occasions over the last few months, and the recent action has vindicated our bias.What can we expect heading into 2017, however? Is there further upside on the company's current operations, or are we going to need to see some operational advance before value once again starts to inflate?Let's take a look.First, for those new to the company, we'll kick things off with a brief introduction.The company is a small biotech company, with a few anomalous qualities that set it apart from many of its (market cap) peers. First, it's been around for more than fifteen years, and only just recently went public by way of a reverse merger. Second, it's got an asset that is about to enter a phase III trial in what could prove a hugely lucrative indication – cardiovascular regeneration. Finally, it's got the backing of billionaire healthcare investor, Dr. Philip Frost.Many reading, especially those with a degree of experience in the small cap biotech space, will know Frost. He's the Florida based billionaire that made his early fortune founding and selling biotech ventures, and has since spent his time identifying undervalued micro and small caps, and taking a (generally large) position. He provides capital, sure, but also a degree of activism. When we're looking at companies of this size, activism from a billionaire backer can be just as important as said billionaire's capital investment, and that's proven the case on a number of Frost's wins to date.The asset that underpins BioCardia's value is called CardiAMP cell therapy. It's a stem cell treatment, aimed at the regeneration of the muscle that makes up the heart and other cardiovascular cells. It's targeting patients that have a high risk of cardiovascular complication (we don't need to point out just how big the market could be for something with such a wide catchment), and if it hits the market, it will be the first stem cell treatment of its type to use cell regeneration to reduce cardiovascular risk.There's some pretty solid data in place supporting the drug's potential against its regenerative endpoints, and it's been proven safe across a host of early and pre-clinical patients.So where's the value coming from near term?BioCardia has just reported on a couple of key patents (patents that underpin its asset), both of which have now been granted, an relate to the treatment of patients that have had heart attacks. There are some outstanding patent applications to be granted, and any development on that front should drive near term growth. Looking a little farther down the line, however, it's the phase III that is going to dictate medium term market cap. Management suggested this would kick off as soon as late 2016, but with a week or so remaining of the year, chances are we're looking at first quarter 17 for enrollment initiation.The company is probably going to have to raise to top up its phase III fund, but we don't see this being too difficult, and shouldn’t be too damaging to an early stage exposure. Further, as the results from the trial start to roll in, any value lost through dilution should rapidly recover by way of data driven (and development related) catalysts.Bottom line here: BioCardia is rapidly developing into one of 2016's top small cap biotech picks, and as the year draws to a close, we fully expect this momentum to continue into 2017.We will be updating our subscribers as soon as we know more. For the latest updates on BCDA, sign up below!Disclosure: We have no position in BCDA and have not been compensated for this article.

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