Sometimes the most fertile of investment opportunities can be right in front of our eyes. Unfortunately, when it comes to identifying those possibilities in the publicly traded markets, it seems as though the emerging companies who don't pay to play often get snubbed by the big money trading desks that rely on quid-pro-quo underwriting opportunity before providing a snippet of research.
On the flip side, astute researchers don't limit their perspective, and search out hidden opportunities regardless of share price or market cap, working tirelessly to introduce innovative companies to the investing public. With that tireless endeavor to introduce in mind, Protea Biosciences stands out as a potential gift to investors focused on micro-cap and emerging opportunities. And, with ongoing clinical validation of the company's technology, PRGB investors may be rewarded with near-term milestone achievements.
Protea Biosciences (OTC:PRGB) may be a five cent stock, but this revolutionary and next-generation company is on the cusp of attracting the attention and professional recognition it deserves. To prove that point, Massachusetts General Hospital is advancing the potential in PRGB, by signing a collaborative agreement with the company to assess the revolutionary and groundbreaking diagnostic and oncology tools that PRGB can offer. Beyond the validation from Mass General, once investors begin to understand the science within the PRGB platform, which delivers a comprehensive identification of the molecular structure of cell's, the alluded to "gift" of investment makes clear sense. And, for those that look past the dollar signs and look for innovative and humanitarian opportunity, the collaboration with Mass General may potentially lead to the saving of thousands of lives per year.
Not only that, the relationship may serve to validate the PRGB platform entirely, ultimately attracting the attention of the large institutional investors that recognize obvious and actionable potential.
Leading From The Front
The most successful investors did not make fortunes following the herd. Instead, they led the pack and recognized opportunity well before others realized the obvious. So, while many turn their head from a company based solely on its price as a real indicator of value, it's those that look at the company and form an opinion based on a comprehensive analysis that may provide significant returns. And, while being in front of an investment pack may bring the initial brunt of headwinds, it's the leader that emerges first, and with the rewards from understanding and acting upon what others did not see.
To be sure, Massachusetts General is indeed providing a clue as to what the future may hold for PRGB, and the recently announced collaborative effort to co-develop a new diagnostic methodology that will provide cancer cell molecular profiles may already be paving the way forward. Beyond just identifying cell cluster saliency, though, the diagnostic platform will further offer information as to how treating drugs are distributed through the cell clusters and provide indicators as to the molecular response, with the goal to improve patient treatment and outcomes.
So, for a moment, let the five cent stock price and the ridiculous and undervalued $21.2 million market cap take a back seat to the reality of what Protea Bioscience is doing. From there, investors can conclude as to whether the market has not only left this emerging gem behind but has also neglected to realize the bright future that lay ahead for this emerging oncology company.
Molecular Information In Seconds
Oncology stocks are not necessarily easy to define, and an extensive list of scientific words often get used to describe what may be a relatively straightforward concept.
Understanding the Protea function comes with the need to define some terms, but in its simplest form, the company uses its state-of-the-art "mass spectra" technology to provide comprehensive insight into the molecular cell structure, that is, PRGB technology can identify the molecules being produced and living inside of human cells. No doubt, that's where Mass General realizes the benefit to the oncology field, basing an assumption that PRGB's platform can help to not only eliminate unnecessary treatment but can also utilize the molecular panels produced for reference in future analysis. But, having a library of data to aid in identifying cell abnormality is only one measure of the breakthrough technology, the other primary focus is on the speed of producing reliable data.
Here is a critical concept: speed is essential in oncology. And, PRGB is emerging as the potential leader by having the ability to create dependable, consistent and trusted data about molecular cell structure, by producing identifiable results in seconds and minutes instead of the days to weeks necessary in the alternative competitive landscape. This ability to communicate near-immediate results is a huge benefit for medical and oncology specialists, and it can be the difference in providing efficient and targeted medical care for patients.
Not only does Protea deliver quick and reliable results, it does so in both 2D and 3D imaging, which allows for not only an in-depth look at living and preserved cells but can drill into the cell to identify particular molecules that may be a contributing factor in a specific diagnosis. To date, the company 's technology has been featured in over 50 publications and utilized by a large number of Fortune 500 pharma and biotech companies. Additionally, Protea holds 13 patents to date and can be credited with establishing the first fully integrated molecular information technologies.
The importance in determining molecular identification is that it allows drug developers to understand precisely how their drug is functioning at the molecular level, that is, is the therapy reaching its molecular target and how much of the therapeutic value entered the cells and over what period. Beyond that, PRGB can educate clients on the duration of particular drugs therapeutic effect as well as if the drug is causing any molecular changes in the targeted cell cluster. In other words, if more pharmaceutical companies were utilizing the molecular mapping from PRGB, perhaps the manufacturer's disclaimer and side effect disclosures could be materially shorter, which would be a direct benefit to patients and manufacturer, alike.
Going a step further, most medical professionals will admit that getting a comprehensive data set of molecular information not only takes too long, but it also requires a highly-trained medical staff to interpret the data and in most cases only provides a limited data set for interpretation. It's mind boggling sometimes to see that companies like Protea are readily available to offer timely and measurable solutions to existing scientific lapses, but, because of limited marketing budgets don't get the privilege of being extensively exposed to the market. However, in time, things are expected to change for Protea, as the industry recognizes the superior technology and benefit from PRGB's technology and begins to address the current industry limitations head-on.
The Market Potential
Now that the Mass General collaboration may provide PRGB the additional recognition they deserve, the company is primed to tap into a significant global opportunity.
Currently, the worldwide market for pre-clinical drug services is estimated to be an $11 billion per year proposition. Of the total market, it's projected that about $1.5 billion is spent on understanding and analyzing molecular information related to a particular drug's development. Looking at the growth of the biopharmaceutical market, which represents about one-third of the pharmaceutical industry and is expected to be a $386 billion market by the year 2020, the likelihood for PRGB to take advantage of providing molecular information to a demand driven market is substantial. Beyond pre-clinical drug services, PRGB is also positioned well to capitalize on the growing field of immunotherapy, a treatment that mobilizes the body's immune system to fight disease and malignancy. The opportunity presented in this sector is currently a $62 billion market and is expected to grow exponentially over the next decade.
But, at its core, the oncology sector should be enormously receptive to the PRGB technology, especially when the cost of drug development has increased to the point where numerous drugs that may offer life-saving potential get stalled in pre-clinical trials due to lack of funding. For small companies, having the opportunity to fail early and fail cheap is considerably more advantageous than running through a late-stage trial only to miss the end-point. While progressing to a Phase III trial may certainly benefit any given stock in the short term, the failure at that stage provides a quick dose of gravity and a likely plunge in market value. Therefore, utilizing the most revolutionary technology available as a predictor of results is a far better course of action to take, allowing drug developers to cut losses early and take on new initiatives and development programs.
It's not a matter of if large pharma is going to look to Protea for informational value, it's a matter of when. But, as always, time is more costly to an emerging company like PRGB than it is to a multi-billion, if not trillion dollar industry. Hence, patience is a virtue here, and as the company continues to accumulate and publish supporting data, a compelling argument can be made as to why PRGB is worth the investor interest.
"Big Data" By Protea
The sum of the parts make PRGB worthy of investor interest, and the reasons why PRGB is positioned to capitalize in the coming years is open to those that understand the value within the science. Trillions of cells exist in the human body, and each of these cells produces billions of additional biologically active molecules that define the health and disease in a patient. What PRGB does is to identify the "molecular output" of the living cell, and more importantly to the patient or specialist, separates 1000's of different molecules to be defined in a single analysis. For instance, if a physician was to look at an image of a lung tumor when using the PRGB analysis, he could determine molecular levels in lipids, peptides, proteins, and metabolites. The identification through these distinct classifications offers tremendous value to scientists and developers alike, providing a comprehensive and almost complete analysis of the cells within that tumor. In other words, Protea delivers "big data."
Protea uses its LAESI DP-1000, a ground-breaking instrument that identifies metabolites, lipids, peptides, and other biomolecules to generate and analyze cell cluster samples at the rate of one per 7 seconds. The technology housed within the device can provide both 2D and 3D imaging, and needs no sample data which can often produce bias results. It's the first device that provides the technology to view deep inside a cell cluster for molecular analysis and also provides the benefit of storing the data in a molecular database for future use. Thus, prior results become a future revenue stream, making the value at PRGB more stable by providing for potential recurring revenue streams off of previous data.
The LAESI device can be extremely profitable to PRGB in that it is fully automated, and requires less specific attention by technicians. Further, it generates results in about sixty seconds, needs no outside antibodies to produce results and creates a molecular data grid in pixel generated imaging that can accurately target a predetermined area. Impressive to LAESI is that its 2D case study that showed imaging of bacterial colonies not only produced a clear image of treatment in progress, but the data from LAESI remains visible even after analysis. This value-added component to LAESI improves the ability to assess new antibiotic effectiveness in comparison to prior treatment. The device also provides cumulative data to developers who are a significant driver for therapeutic evaluation.
The 3D imaging capacity of LAESI is impressive as well, enabling three-dimensional molecular imaging and the ability for analysts to visualize a new cancer treatment molecule, as well as maintaining the therapeutic value associated with the molecular targets inside a studied tumor. It get's even more important for patients who have cancer, and as the medical community focuses on the value of the speedy results from PRGB technology, patients get rewarded with quick opportunity to receive appropriate and targeted care.
Protea is one of the few, if not only publicly traded company, that is targeting its proprietary technology to look inside cancer cells to provide "molecular fingerprints" intended to improve both diagnosis and management of the disease. Molecular tests in development at the company already is showing accurate detection and diagnostic value of malignant melanoma. In collaboration with Yale Department of Pathology, PRGB shared encouraging results published in the American Society of Dermatopathology which indicated a greater than 90% level of accuracy and specificity in identifying specific molecular structure. These results have led to an extensive follow-on clinical trial that is currently underway, with completion expected in the second half of 2017.
The Protea Advantage
The story, beyond what the share price tells is encouraging. The adage to never judge a book by its cover rings especially true in this case. No doubt, PRGB is in the process of building a major corporate franchise that can provide the pharmaceutical industry access to proprietary molecular technology that offers unique capabilities in meeting analytical needs. Market adoption is expanding, and the company's client base has been growing. Also important to note is that PRGB has collaborative partnerships with Agilent Technologies (NYSE:A), Protein Metrics, Memorial Sloan Kettering Cancer Center, Yale University, and Massachusetts General Hospital, positioning the company for long-term success in the expanding global drug development and molecular information services market.
Although PRGB has about 387 million shares outstanding, after taking into account all anti-dilution provisions in a prior financing, the capital structure tells a far different story than what is transpiring on a scientific front. Mostly, PRGB is creating a better field of play for drug developers and molecular scientists, providing a detailed and comprehensive data set to work from that can offer both predictive value and cost-saving benefit. At current levels, PRGB is more a victim of a market that "sell's" coverage and the lack of institutional support for PRGB not only hides its real value but also conceals the technology from a cancer industry that is desperate to find important data sources that can save lives. At current stock levels, Protea sits in undervalued territory. However, as is the case with many emerging stocks that get mired in the world of stock market shenanigans, it may only be a short matter of time before the investment world wakes up to the fact that PRGB may have one of the best molecular identification tools on the market. At that point, investor patience may ultimately get rewarded with higher and deserved company valuations.
This article was originally featured on CNA Finance.