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Insider Buys Highlight Near Term Growth Potential For Polarityte

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Ever since stem cell biotech firm PolarityTE Inc (NASDAQ: COOL) went public in last December, the stock has been on a tear. There have been three peaks followed by profit-taking pullbacks, with each advance going further than the last. Since December, the stock has skyrocketed nearly 700%.

And still, after this enormous move, the insiders are adding to their own stakes.

John Stetson, CFO of Polarityte Inc (NASDAQ: COOL) just picked up another 1,000 shares of the company to bring his total holding to a little over 333,000 shares. It's not a huge buy when looked at against a backdrop of his total position but it's his first buy in a while and it's enough to warrant some attention.

So, what's happened with Polarityte recently and are there any catalysts set to hit press near term that could push the stock higher?

The background: Polarityte has developed a technology that potentially allows for the regeneration of skin cells that allow for completely natural growth, including hair and even appendages.

The company takes a biopsy of the skin and runs it through a proprietary technology platform that allows for the imprinting of cells in 3D. The result is a graft type piece of skin that can be applied to any open wound and will heal quickly in line with the outcome discussed above.

In patients with burn wounds especially, the ability to 3D print a skin graft that's created using native skin cells and that can regenerate naturally is a real step forward as compared to current standard of care treatments in this space right now.

So why is now particularly an important time for Polarityte?

The technology and the therapy, called SkinTE commercially, picked up FDA registration at the start of this month. Subsequent to this registration, the company has initiated a controlled, limited-market release of the product to select medical institutions, and expects to accelerate commercialization in 2018 as the company scales up its manufacturing capabilities going forward.

Further, a couple of weeks subsequent to this registration, management announced that multiple value analysis committees have approved SkinTE for use at their respective medical institutions. We don't yet know what these institutions are but that the therapy is picking up approval when measured against a value model is a strong validation of the asset and suggests that once the limited rollout is complete and the full-scale commercialization efforts begin, the company should have no problem getting insurers to cover the treatment and – in turn – should have no problem ramping up revenues.

So what's next?

The limited rollout is running in parallel with a few additional studies designed to build on the already available efficacy data for this therapy. The assumption is that these studies will be used to reinforce the company's sales pitch as it moves into full-scale commercialization next year.

The limited rollout is a strong indicator of future success and is an important factor to watch near-term. The outcomes of the ongoing studies are likely what's going to move this stock as we head into the final couple of months of 2017.

As a quick final note on capital resources, the company secured a $17.75 million above market offering during the middle of September, meaning near-term funding for the limited rollout and the ongoing trials shouldn’t be a problem. This removes any risk of dilution for the foreseeable future. 

Disclosure: the author holds no positions in any of the stocks mentioned in this piece. 

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributorBiotech Long Ideas News FDA Insider Trades Trading Ideas General

 

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