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TrovaGene Inks Contract with Boreal Genomics, Stock Down

Zacks

San Diego, CA-based TrovaGene Inc. TROV, a molecular diagnostic company, recently announced the signing of a long-term Supply and Distribution Agreement with Boreal Genomics, a Canada-based technology company. Notably, TrovaGene lost almost 3.3% to close at $2.90 per share.

Meanwhile, TrovaGene represents a negative return of roughly 45.4% in the last six months, way wider than the Zacks Categorized Medical Biomed sub-industry’s return of -7.02%, over the same time frame.

In fact, TrovaGene has been an underperformer in the global health care market. The stock represented a return of roughly -8% in the past one month, comparing to the 3.4% return of the global Health Care industry.

TROVAGENE INC Price


TROVAGENE INC Price | TROVAGENE INC Quote

Coming back to the deal, the joint venture is on track to address the ‘unmet needs’ of the liquid biopsy testing market by providing cost effective and seamless urine and blood ctDNA assay for next generation sequencing (NGS) platforms around the world.

In this regard, the global liquid biopsy (test done on a sample of blood to look for cancer cells) market by cancer type is expected to reach a worth of $1.66 billion by 2021, growing at a CAGR of 23.4% (Markets and Markets). Such bullish prospects are expected to propel growth for TrovaGene in the coming quarters.

Per management, TrovaGene and Boreal will aim at getting treatment tools (kits) manufactured in a cGMP facility (current good manufacturing practice) and sanction them through FDA, CE Mark, CFDA and other regulatory bodies.

TrovaGene and Boreal also aim to address the problems associated with the expensive single-gene PCR assays that have limited availability. For addressing such concerns, TrovaGene’s ‘research-use-only proprietary kits’ would have a urine collection kit, a urine extraction kit, a mutation enrichment kit, and the Boreal OnTarget™ system.

Our Take

Despite the unimpressive price movement of the stock, we are upbeat about the company’s significant progress in the liquid biopsy and the Precision Cancer Monitoring (PCM) platform. In this regard, TrovaGene recently announced encouraging data pertaining to PCM technology for both urine and plasma EGFR mutation testing.

Of the other recent developments, TrovaGene has been selected as the liquid biopsy provider for a study named Precision Promise, a large-scale precision medical trial to treat pancreatic cancer patients. TrovaGene has also signed an ‘in-network provider agreement’ with Blue Cross Blue Shield of Illinois, a division of Health Care Service Corporation.

Zacks Rank & Other Key Picks

Currently, TrovaGena carries a Zacks Rank #2 (Buy).

Other favorably ranked stocks in the broader medical space include HMS Holdings Corp. HMSY, Medidata Solutions Inc. MDSO and IDEXX Laboratories, Inc. IDXX. Notably, HMS Holdings and Medidata Solutions carry a Zacks Rank #2 while IDEXX Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

HMS Holdings has a long-term expected growth rate of 14.26%. Notably, the company has a solid one-year return of roughly 43.7%.

Medidata Solutions has a strong one-year return of roughly 23.4%. The stock represents a long-term expected growth rate of 22.33%.

IDEXX Laboratories represents a solid one-year return of almost 63.7%. The company has a long-term expected growth rate of almost 14.96%.

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