Zenosense Inc (OTCMKTS:ZENO) spent the first half of 2016 essentially flat, trading in and around the $0.02 mark. It picked up some strength during the second half of the year, boosting to a little above the $0.1 level, but remained flat at this level for around six or seven months. Fast forward to February, and things are picking up. The company has gained close to 300% in the last week alone, and while no real fundamental developments have hit press, volume has been high, and Zenosense is trading in and around record highs of a little over a dollar a share.
When a company moves like this, on no real developments, it can either be anomalous or indicative of some as yet unavailable information being about to hit press. In the biotech space, and especially at this end of the market, falling in line with the second of these two suggestions has worked well for us on many occasions in the past. As such, we’re not going to ignore the recent run, and we’re going to assume it’s pointing towards a major development materializing near term.
This, of course, begs the question: what might said development involve?
In terms of asset focus, there’s only really one thing that the development can involve, and that’s something called the MIDS Cardiac device. Many reading will likely not have heard of this device as yet, but it looks as though it could be a real game changer in the field of cardiovascular medicine and healthcare.
By way of a quick introduction, it’s a handheld testing device designed to make the diagnosis of hear attacks (both before and after they take place) more accurate, cheaper and easier. The science is rooted in something called troponin. Basically, when a patient has a heart attack, or when the heart experiences some degree of tension (which generally precedes a heart attack) a protein called troponin is released into the blood. The more severe the tension/attack, the more troponin is released. By measuring the amount of troponin in the blood, therefore, physicians can tell whether a patient has had a heart attack, how severe it was, or can pick up on protein release that suggests a heart attack is incoming.
The problem is, the current technology only allows for detection of clumps of this protein, and it needs to be preformed in a lab setting. There are some higher accuracy testing technologies that can look deeper than clumps, but again, a lab setting is needed, and they are expensive and time consuming to use.
The MIDS Cardiac device is a tech developed by a company called, not surprisingly, MIDS, which Zenosense has a 40% stake in. It’s a handheld device can measure individual troponins, and results are basically instantaneous. Further, the test requires just a drop of blood (similar to a blood glucose test) as opposed to the IV draw required by current standards of care.
To put it simply, this technology really could be a game changer in the space, and that’s where we see the vast majority of the company’s near term value deriving from. The technology (on which the company has a patent, and an application for which this IP coverage was submitted earlier this year) can be applied to other testing regimens, but cardiovascular (and specifically, troponins) are the core focus right now.
So with that established, what do we think the development might be?
Well, as with any new medical device, these sorts of diagnostics need testing. The process is not as rigorous as it is for a new drug, but it is multi phase nonetheless, and has plenty of potential catalysts associated with it as a company pushes a technology along the pathway to commercialization. We think that Zenosense is about to announce a key development associated with this commercialization pathway for MIDS Cardiac. If it does, there’s an immediate upside potential on offer, and this recent run will just be the start of a longer term trend.
The risk is, as usual, rooted in the fact that this is just speculation based on price action. We may see no such development materialize. With that said, however, even as a long term play, this one is well worth a look, based on its technology alone.
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Disclosure: We have no position in ZENO and have not been compensated for this article.