In a July 2, 2018 research note, analyst Jason McCarthy wrote that BioLife Solutions Inc. (BLFS:NASDAQ) reported another record quarter, Q2/18, for revenue and increased guidance again. On this news, Maxim raised its target price on Buy-rated BioLife to $18 per share from $12. The stock, which rallied on the news, is currently priced at around $16.70 per share.
BioLife's preliminary Q2/18 cell media revenue beat expectations at $5.2 million ($5.2M). The figure was up 36% quarter over quarter and 103% year over year. "Recall that each approved cell therapy drug that uses BioLife's media can potentially generate $500,000 to $2M in recurring annual revenue," noted McCarthy. Cash flow positive, the company has $14M on the balance sheet. Management increased guidance to $18.5–20M from $14.5–15.5M.
McCarthy pointed out that uptake of BioLife's cell preservation media have increased over the past year and along with it, the company's valuation. "We expect this trend could continue and valuation to continue to rise as more cell therapies advance to later stages of development and gain approval(s)." Today, BioLife has more than 2,000 customers.
The analyst proffered reasons for the expanding use of BioLife's products. One, "the cell therapy space continues to grow exponentially," he said. For example, Kolon Life Science Inc. (102940:KOSDAQ) got approval in November 2017 of its cell-mediated therapy for use in knee osteoarthritis in Korea.
As such, the number of clinical applications for BioLife's media, currently at about 300, is also rising. About a dozen of those uses are in chimeric antigen receptor T cell (CAR-T) therapies, which also are "gaining commercial traction." For instance, Kite Pharma received approval of its CAR-T Yescarta in October as a treatment for certain types of non-Hodgkin's lymphoma.
Additionally, BioLife's "media and cold chain logistics platform" better helps cells maintain viability and recover, and ultimately gets the "most efficacious, viable product to patients," McCarthy wrote. These qualities differentiate BioLife's product from others. "BioLife's media and logistic expertise (shippers) and more represent the best in the industry."
McCarthy concluded, "As cell therapy grows, so does BioLife as the tangential play."
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Disclosures from Maxim Group, BioLife Solutions Inc., July 2, 2018
I, Jason McCarthy, Ph.D., attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report.
I, Caroline Palomeque, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm's total revenues, a portion of which is generated by investment banking activities.
Maxim Group makes a market in Biolife Solutions, Inc.
Maxim Group expects to receive or intends to seek compensation for investment banking services from Biolife Solutions, Inc. in the next 3 months.