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BioSig Technologies Inc (OTCMKTS:BSGM) Might Be An Oversold Discount Opportunity

BioSig Technologies Inc (OTCMKTS:BSGM) Might Be An Oversold Discount Opportunity
Written by
Chris Sandburg
Published on
July 21, 2016
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At the end of April, development stage biotech BioSig Technologies Inc (OTCMKTS:BSGM) broke $2.00 resistance and topped out at just shy of $2.10 a share. At time of writing, the company is down nearly 40% on these highs, and there has been very little in the way of fundamental developments to warrant movement in either direction. Well, there's been one development of note, but we believe markets may have overreacted to its implications, and that there might be an opportunity to reenter at current levels for a discount exposure. Here's why.First, a quick look at the company. BioSig is a medical device company with a lead product candidate called PureEP. It's designed to improve a physician's ability to monitor heart movement, and in turn, perform ablation therapy to a greater degree of accuracy. Why is this important? Well, any abnormalities in the surface or inner lining of the heart can cause what's called arrhythmia. This is basically just an abnormal beating pattern – be it too fast, too slow, or irregular. A large portion of these arrhythmias are caused by scarring, and in turn, a large portion of this scarring is caused by cardiac arrest. More and more people in the US are surviving cardiac arrests, as treatment options and understanding improves, so there's more people walking around with scarring and, in turn, arrhythmia. The problem is, current ablation supporting technology (this is where a physician attempts to remove scar tissue to fix the arrhythmia) doesn't allow for that high a degree of accuracy. This means high rates of patient follow up and a pretty lengthy initial procedure.By improving the accuracy with its PureEP device, BioSig is aiming to reduce both of these factors.Its working on a 510(k) submission with a target of early 2017 submission. After submission, these 510(k) approval processes are far quicker than a standard drug/PDUFA process, and the machine could be approved and ready for market as soon as the end of the second quarter in 2017. That's less than a year from now.There's been a bit of promotional activity surrounding the company's stock, but nothing overly alarming, and BioSig has made an effort to build credibility by attending various conferences (both medical and investment community) over the last twelve months.Further, and unusually for a company in this position, the company's finances don’t look all that bad. There are no revenues to speak of, of course, but cash on hand at March 31 was a little over $137K, down from just shy of $1 million at the close of 2015, and debt is pretty low relative to cash. The company just closed on a $4.5 million private placement that will bolster its cash position going forward. This is likely what initiated the turnaround early May, and yes, current shareholders might be a bit upset about the placement, but it puts the company in a position to target a NASDAQ or NYSE listing (which it expects to do before the close of 2016). This will add value and should mitigate the value lost through dilution.Of course, there's likely more dilution to come going forward, and this remains the primary risk to early entrants. This said, we've got a company on the verge of its first major entry into what analysts expect to be a billion-dollar market by 2020, in a not-too-unhealthy financial position, and with a major catalyst – the uplisting – just around the corner. This recent downswing that looks primarily due to the dilutive interpretation of the recent raise might be a nice opportunity to pick up an exposure at a deep discount to what markets were paying just six weeks ago.Sign up to our free newsletter below and get our current updates on BSGM!Disclosure: We have no position in BSGM and have not been compensated for this article.

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