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Even after a 308% jump yesterday and a further 33% gain as of this afternoon, Microbot Medical Inc. (NASDAQ: MBOT ) stock is trading around $13.05 but has a market capitalization of just $40 million. Plus, with only 2.79 million shares of MBOT stock outstanding and 26% of its float being sold short, MBOT is either an easy four-bagger or a stock that will lose all of those gains in no time.
Why Microbot Medical Stock Rose
An independent in-vitro laboratory study validated Microbot's self-cleaning shunt (or SCS). The theory that SCS may eventually treat occlusion, or Traumatic Brain Injury, is coming closer to reality.
The contract-research-services firm that carried out the study used glioblastoma cells from human brains to assess the performance of SCS. During the 30-day study, the firm had three main findings, according to Microbot :
- Significant cell growth and accumulation in a non-operating SCS and
- A significant inhibition in cell growth in the constantly operating SCS with very little to no cell attachment on the robotic brush (ViRob) and on the opening where the robotic brush (ViRob) operates.
- The study also demonstrated that the Company's SCS has the ability to operate after cells had accumulated on the catheter holes and the robotic brush (ViRob).
Importantly, multiple, previous clinical studies have found that declines of memory that occur after head injuries can be prevented by slowing the growth of brain cells.
Platforms And Products That Could Boost MBOT Stock
ViRob is one of the company's two main platforms. It's a miniature robot that moves around inside of the human body. ViRob can be controlled remotely and fits in blood vessels, the digestive tract and the respiratory system.
If the study of SCS validates its clinical use, then it may be used to treat a number of ailments. Among the conditions that SCS could treat, according to MBOT, are hydrocephalus , or "water in the brain," which occurs in 1 in every 500 babies born in the U.S., and n ormal pressure hydrocephalus (NPH), which can occur after a head injury. It is estimated that over 700,000 Americans have NPH.
The other main platform, TipCAT, is a flexible endoscope that may help doctors treat problems that occur within the body's tubular structures, including the colon, blood vessels, and the urinary tract.
Finally, the Tip Catheter Colonoscope, or TCC, product could be used to facilitate endoscopies, a procedure that is done 15 million to 20 million times annually.
If one or more of these products are approved by the FDA and then widely adopted, MBOT stock is likely to rally tremendously.
Investors who are interested in the biotechnology and medical-equipment sector can invest in names other than MBOT stock.
Exact Sciences Corporation (NASDAQ: EXAS ) is growing nicely, thanks to its Cologuard test, a product which screens for colon cancer. Approved by the FDA in August 2014, the product was recommended by the American Cancer Society.
The company estimated that it generated total revenue of $454 million to $455 million last year, up 71% year-over-year.
Medtronic plc (NYSE: MDT ) is a medical appliances and equipment supplier and is far more established than Microbot. Its shares are down about 14% from their 52-week highs and are valued at 15.6 times MDT's forward price-earnings ratio, which is based on analysts' consensus 2019 earnings-per-share estimate.
Medtronic stock fell recently because of worries over its acquisition of Covidien . This acquisition widens the company's market because Covidien makes products that are used by hospitals to provide acute care. Conversely, Medtronic's product portfolio focuses primarily on chronic diseases.
The Bottom Line on MBOT Stock
MBOT stock may or may not drop from its current levels. No one knows for sure. And yet , MBOT stock is still more than 50% below the level it reached in April 2016, when MBOT stock was trading around $36.
Those who bought Microbot Medical stock at $5.00 or less are enjoying their tremendous gains, while those who were on the sidelines might want to watch MBOT stock for awhile before buying it.
As of this writing, the author did not hold a position in any of the aforementioned securities.
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