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biOasis Technologies – TSXV: BTI

“Looking to Rebound”

biOasis Technologies Inc (TSXV: BTI) based in Richmond B. C., has developed and commercialized a platform for the delivery of therapeutic compounds across the blood-brain barrier and into the Central Nervous System.  The blood brain barrier and its relation to diet, inflammation and brain injury has received much discussion over the last couple of years, and the discoveries present BTI’s recent struggles with seemingly more options in the future.  With a 52 week high over two dollars a share, the market must have agreed that this platform was significant to the sector.  Over the last year, the share price has declined significantly, but should a seemingly normal occurrence play out, the potential exists for this stock to rise again.  BTI.V currently has slightly less than 51.5 million shares outstanding with a current market cap of $36.07 million, insiders and affiliates holding 35 percent of shares.

Given that “the delivery of therapeutics across the blood brain barrier….has been considered the holy grail of neurological science for decades”, the apparent ability of BTI’s platform to transport therapeutics in such a manner is a significant aspect of future neuro-therapeutic treatments.  “The Transcend Platform consists of a diverse suite of peptide carriers and linkers that together provide transport solutions for a host of CNS therapeutics including monoclonal antibodies, enzymes, small molecules and various types of gene therapies.”  More details on the platform can be seen on the following video link.

It is conceivable that costs have contributed to the recent share price decline, but the company is striving to reduce costs and improve their platforms.  biOasis has numerous patents, most recently in July of last year, that have been a revelation, outperforming their competition in this form of therapeutic brain drug delivery.  It is believed that once licensing agreements in the biotechnological and pharmaceutical sectors are established, BTI will reach its significant potential.  This fact was addressed at the annual shareholders meeting where it was acknowledged that, “The depth and quality of the biOasis Deal Flow Pipeline has been significantly expanded and now consists of several projects in various stages of action or development.”  Licensing agreements were reached with two companies in 2016 and more significantly, “. In addition, three evaluation and validation studies are underway, and another five agreements are under active development.”

The company believes that the pharmaceutical industry has interest and belief in biOasis and as an observer, and one who has a rudimentary understanding of these pathways, I lean that way from my research.  There are several more technical benefits to the biOasis Transcend Platform, and the other patents they have will allow markets to open up for the company.  According to their January news release, “this increased confidence in biOasis and the Transcend Platform has resulted in greater allocations of funding and resources by the pharmaceutical companies.”

Despite the drop from over two dollars a share at its peak, there are recommend buy ratings on some sites, Reuters does say that weak fundamentals provide a negative outlook at this time garnering only a moderate risk, which coupled with the amount of conferences attended by the company last year makes that assessment accurate.  BTI has lost market share by growing revenues slower than the industry average. This reverses the trend from the previous year when revenue growth at BTI led the industry at 104.21% and -27.74%, respectively.  It is conceivable that the expenses of 2016 have contributed to this decline as well as shareholder impatience.  Those bearish feel this stock could be cut in half from where it is, those who are positive think it can return to its 52 week high in the long term and although BTI is not profitable and therefore has a negative ROE that is not meaningful according to reports.  This assessment seems to be congruent with the biOasis CEO Rob Hutchinson who said, “As time passes, it should enable us to see real progress in multiple areas and to provide more information that will allow our internal excitement to be shared with all of our shareholders.”  This company will be interesting to watch once more licensing agreements are reached and continued product improvements are realized, those two things should deliver biOasis from the growing pains they are currently experiencing.

 

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