Has ThermoGenesis Peaked?

So, 24/7 Wall St. is wondering if the trade is dying in ThermoGenesis. This is a bullish case and bearish case analysis of the stock’s prospects ahead. Do we need to make the reminder that this can still go either way?

The driving force here was that shares effectively doubled on Tuesday on news that ThermoGenesis and TotipotentRX Corporation announced their co-sponsored Phase Ib clinical trial safety and efficacy results treating no-option patients suffering from critical limb ischemia with Totipotent’s CLIRST (Critical Limb Ischemia Rapid Stem cell Therapy) treatment.

While the trial achieved both its primary safety and secondary efficacy endpoints at 12 months, the impressive statistical data was the driving force. The trial achieved statistical significance in the following areas:

• major amputation free survival rates (82.4%);
• both resting and walking pain reduction;
• improved walking distance;
• and open wound healing and generation of new blood vessels in the treated leg.
• There were also no serious adverse events determined to be related to the therapy.

We would note that this open label single center study enrolled 17 patients and was completed at Fortis Escorts Heart Institute in New Delhi with Dr. Suhail Bukari, Senior Consultant and Vascular Surgeon serving as the primary investigator. Apparently, all the patients enrolled were scheduled for amputation of their afflicted limb prior to consenting to the stem cell intervention. The companies also said that this study’s amputation free survival rate of 82% is called to be almost 25% higher than alternative therapeutic approaches to date.

And here is where the big boost comes from that mathematically shows how large this opportunity is. Critical limb ischemia is said to afflict an estimated 2 million people combined in the United States, European Union and Indian sub-continent. This results in roughly 500,000 amputations each year. If this really boils down to a 60-minute rapid bedside treatment which substantially reduces amputations in no-option patients, it would seem as though there is much more potential ahead.

So, that was the bullish case. The bearish case for ThermoGenesis is perhaps nothing more than the company’s history.

From 2004 to 2006, this stock traded between $15 and $25 for most of the time. ThermoGenesis has traded well under $5.00 going back to the recessionary meltdown which crushed the value of this stock and many others.

The chart here is one spot that may be of concern. Again, with a market cap under $50 million anything can happen and technicians might easily admit that they would not be making chart bets.

ThermoGenesis shares rose from $1.09 on only 99,700 shares as of last Friday up to $2.30 on more than 15 million shares on Tuesday. On Wednesday, the stock opened up at $2.85 and hit a high of $3.24. As of about 12:30 PM EST the stock was still up about 28% at $2.94. The difference between Wednesday and Tuesday’s trading action is that this gap-up trade opened at $2.85 on Wednesday and there were almost 21 million shares traded mid-day. The low of Wednesday has been $2.62.

ThermoGenesis also has a market cap of only $49 million. There are no major Wall Street firms following the stock. The company’s sales for 2013 (June end) was $17.96 million, down from $19.02 million in 2012, $23.4 million in 2011, and $23.09 million in 2010. The company also had only $5.3 million in cash as of September 30, 2013.

When stocks double it is impossible not to wonder if the run was too much. When they have a market cap of under $50 million, there is only that much more of a question.