|Wednesday, 20 July 2011 04:05|
Since it's 52-week low ($1.12) in mid June, the stock has been trading on a very nice uptick pattern and it is easy to see that a critical resistance level (and 52-week high) at $2.03 is well within reach of being broken. If that occurs, we could see a nice break-out as important news catalysts start to hit the ticker.
Some upcoming catalysts may easily provide the push needed for the stock to begin trading even higher. With $3M in cash, no debt and a market cap of only $115, perhaps even more appealing to potential investors is the fact that the company is now poised for rapid growth.
To date, ChromaDex has been making money providing lab and research services to the biotech and neutraceuticals industry with a solid legacy business model. While contract analysis, microbiology services, contract isolation, contract research services, bioassay services, process development services, consulting services and litigation support services have paid most of the bills, there is a strong plan in place to grow revenues from $12-15M in 2011 to over $100M in the next three to five years.
That doesn't mean that ChromaDex has forgotten what got it here. In fact, higher demand for services & references standards thanks to increased regulatory activity and increased consumer demands for natural products has the company's internal plan for revenues from their legacy business projecting $40-60M in revenues within those same three to five years.
That type of revenue potential has attracted some key investors to the company, including Dr. Phil Frost, the self made billionare, technology investor and former dermatologist sold drug manufacturer Ivax to Teva Pharmaceuticals for $7.6 billion in 2005. Today Frost owns more than $850 million in Teva stock and the remainder of his fortune held in bonds, cash, slew of medical/biotech firms including ChromaDex. In fact, both Frost and ChromaDex President, William Spengler, have been purchasing shares in the open market. In the last twelve months there have been sixteen insider transactions, five of them coming within the last three months-- all of them buys; none of them sales. Spengler has been buying tens of thousands of shares regularly in the past couple of months.
CDXC's first major proprietary product, pTeroPure® has the potential to greatly exceed the internal revenue plan expectations by itself. Recently, Cott Beverages Inc., a subsidiary of Cott Corporation (NYSE:COT), the world's largest private label beverage company, entered into a licensing and supply agreement with Chromadex.
The pTeroPure® blend is initially targeted at the nutraceuticalmarket but also expected to serve the food & beverage and cosmetic markets and Cott is the world’s largest private label beverage manufacturer and has distribution strength at major clubs and wholesalers –Costco, Walmart, Sam’s, and BJ’s.
pTeroPure® is ChromaDex's branded pterostilbene platform which could turn out to be a blockbuster in the field of human health. Third paries have validated the health benefits of the product and ChromaDex has licensed patents pending related to the platforms's benefits for:
In addition, there are several key, short term catalysts at play for the stock:
We understand that the commercialization of ChromaDex’s retail supplement line, BluScience™, which features pTeroPure® and was originally scheduled to be rolled out in July at GNC (NYSE: GNC) stores nationally and online at GNC's website is now set to take place as soon as September. Given that the commercial launch (with very visible national advertisments and full marketing support) of BluScience represents a major milestone in CDXC's growth and in the accelerating commercialization of pTeroPure®, this also becomes a forward looking news item which should attract even more investors and may easily qualify the company to a listing on one of the major exchanges.