Key catalysts expected to trigger more buying Print E-mail
By M.E.Garza   
Wednesday, 20 July 2011 04:05
penny stock picksFrom the time it was founded in 1999, ChromaDex Inc. (OTCBB: CDXC) has been specialized in creating and supplying botanical reference standards, but it is ready to start earning even more revenues for its investors by commercializing its strong and growing product pipeline. In addition, the techinical chart looks promising for shares to continue trending higher.

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:
  • Cholesterol (First human clinical research study at the University of Mississippi Medical Center aims to evaluate the compound in patients with lipid [cholesterol] disorders.)
  • Oxidative stress / metabolic syndrome
  • Non-melanoma skin cancer
  • Anxiolytic activity
  • Manufacturing process from an exclusive partner audited successfully by the FDA and TGA
pTeroPure® was recently awarded Frost & Sullivan’s 2010 “Most Promising Ingredient of the Year” and the buzz surrounding the natural product reminds us of the type of potential that doubled the value of Neptune Technologies & Bioressources (Nasdaq:NEPT) shares after we were the first to begin coverage of that stock and it's Krill Oil product in mid-April.

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.

Disclosure: None

"Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'.

Add this page to your favorite Social Bookmarking websites
Digg! Reddit!! Mixx! Google! Live! Facebook! Technorati! StumbleUpon! MySpace! Yahoo!

blog comments powered by Disqus