I am willing to bet that more than a few readers have experienced the painful medical condition that I suffered about a decade ago.
It started soon after the birth of my son. I was awakened in the middle of the night with a searing pain in my abdomen that radiated up into my chest. At first, I was terrified, thinking I was having a heart attack.
Fortunately, the hospital was less than a mile away from our home. I decided to drive myself to the emergency room to avoid waking my family.
The emergency room personnel determined that the source of the pain wasn't my heart and that there was nothing wrong with my gastrointestinal region. By that time, the pain had faded, and the hospital gave me a clean bill of health, along with a prescription for painkillers.
Several days later, the debilitating pain returned. It lasted a few hours and then began to fade again.
This began to occur at least once a week, and I visited several medical facilities to determine the cause. No one was able to diagnose the cause, and painkillers remained the only solution to help me stay functional when the pain started.
Finally, I visited a specialist who diagnosed me with an impacted kidney stone in my urinary tract. The stone was very small, but it periodically caused built-up scar tissue to break away, resulting in my excruciating condition. I underwent surgery, and the condition has never recurred.
This problem made me realize that, despite all the technological advances of modern medicine, medical diagnostics is still in the dark ages. Even something as common as kidney stones can go undiagnosed for months while the victim continues to suffer both mentally and physically until the problem is correctly diagnosed. I can only imagine the confusion and pain that come with undiagnosed issues far more severe than the common kidney stone.
Fortunately, diagnostic issues may soon be a thing of the past. Several publicly traded companies are currently making great strides in the field of medical diagnostics, and my favorite company right now in that arena is TrovaGene (Nasdaq: TROV).
Not only is this company involved in revolutionary cancer molecular monitoring diagnostics, but the technical picture has "buy now" written all over it. Let's take a deeper look.
|Diagnostic issues may soon be a thing of the past. Several companies are currently making great strides in the field of medical diagnostics, and my favorite company right now in that arena is TrovaGene.|
TrovaGene's proprietary technology enables medical professionals to analyze a patient's DNA to determine the best course of colon cancer treatment. This is usually done with a biopsy of the diseased areas, but TrovaGene is developing a method that analyzes the patient's urine. Because its method isn't invasive or painful, TrovaGene's approach could lead to more people getting tested and therefore treated for cancer. The company expects this technology to hit the market shortly. In addition, TrovaGene's DNA/RNA diagnostics are used to monitor and diagnose hereditary and infectious diseases.
TrovaGene isn't just a pie-in-the-sky theory. In March, the company launched its urine-based human papillomavirus (HPV) test, which screens for 15 high-risk strains of the papilloma virus. It also expects the previously mentioned colon cancer technology, as well as a test for mutations, to be launched by the end of the year.
In other bullish news, TrovaGene entered into a material agreement with multibillion-dollar diagnostics technology leader PerkinElmer (NYSE: PKI) to jointly develop a test to determine a person's risk of developing hepatocellular carcinoma (HCC). The terms have not been disclosed, but PerkinElmer will make milestone payments to TrovaGene.
TrovaGene boasts a market cap of $125 million but has a tiny revenue stream of just under an average $90,000 per quarter. The vast majority of the revenue is from royalty agreements.
This company has substantial development costs, but I think it will soon turn the corner to profits. PerkinElmer may be the start of other large pharmaceuticals joining forces. In addition, the market for the diversified pending products is huge with TrovaGene, which is well positioned to capture it in stages as the tests are approved and launched.
In the technical picture, shares have dropped from a high of more than $10 to find support at the 200-day simple moving average. As the bullish catalysts start to happen, the price could easily bounce into the $15 range within the next 18 months. Buying now with stops just below $6 and a 12-month target of $10 and an 18-month target of $15 creates a strong risk-to-reward ratio for investors.
Risks to Consider: Despite the potential, investors need to be fully aware that this company is not yet profitable. Although it has enough cash to survive awhile, it has a high burn rate and risks the possibility of another company creating better products before TrovaGene can exploit the market. This type of investment can produce huge rewards, but it remains highly speculative at this time.
Action to Take --> I think right now is the perfect time to buy into this diagnostic company. The convergence of the pending diversified launches combined with the technical picture creates a bullish environment from the current level.