Cell MedX Corp (OTCMKTS:CMXC) is a stock we have covered on several occasions in recent months. We have been unabashedly positive on the name, most recently offering up a timing piece based on our technical analysis of the stock. However, today’s update is a more traditional one: we have a new catalyst in play here, and an even-handed exploration of its implications is important.
On Wednesday, CMXC management hit the wires with the announcement that the Company’s Canadian subsidiary has entered into a production agreement with an ISO 9001 certified manufacturing facility in Coquitlam, BC, and selected North American suppliers for sourcing essential components for its eBalance Pro device. We will break this down further below. But first, for those unacquainted with the company, here is a quick once-over.
Cell MedX Corp (OTCMKTS:CMXC) casts itself as an early development-stage biotech company focused on the discovery, development and commercialization of therapeutic and non-therapeutic products that promote general wellness and alleviate complications associated with medical conditions including, but not limited to, diabetes, Parkinson’s disease, high blood pressure.
The company’s primary asset is Its proprietary “e-balance technology”, which is in the research and development stage to manage diabetes mellitus and its complications. On that note, the company just announced that it has completed its registration process with the FDA and has initiated an application process to receive clearance from the regulator for use of its eBalance device as Class II non-exempt device.
Non-exempt Class II status is important. In addition, “as of March 27th, 2017, the group of study participants had been increased to 21, with 18 subjects having received their first eBalance treatments. The Company expects that all 30 subjects will be initiated into the study by early April.” This is something we were waiting for. It’s a marker of the progression of the trial, and all to the good. And now, as all patients have been initiated, we have to believe that new catalysts consisting of something that feels like “results” may be on the way, and act as a motivator for the next leg in this stock’s trend.
CMXC has an extremely strong team, including Dr. John Sanderson in the Chief Medical Officer role. Dr. Sanderson is a stem cell researcher who began his career in clinical medicine specializing in diabetes and intravenous nutrition of critically ill patients. He has received NIH funding, has multiple issued patents and published numerous academic papers as principal investigator.
While a medical director and consultant at Johnson & Johnson, Dr. Sanderson was tasked with due diligence oversight for mergers and acquisition, formulating strategic initiatives, and evaluating new technologies. As a consultant to Fortune 100 health care companies and the U.S. government, Dr. Sanderson worked with some of the greatest minds of the day devising technological solutions to important public health challenges such as obesity, diabetes, and asthma. In recent years, Dr. Sanderson has focused exclusively on the application of adult stem cells to dermatologic problems and effects of ageing.
He, along with others at CMXC, have put the company on a playing field now dominated by the likes of Novo Nordisk (NYSE:NVO), Insulet (NASDAQ:PODD), and DexCom (NASDAQ:DXCM) as they bring their technology inexorably to market.
Taking a Key Step
As noted above, the company’s Canadian subsidiary has reportedly entered into a production agreement with an ISO 9001 certified manufacturing facility in Coquitlam, BC, and selected North American suppliers for sourcing essential components for its eBalance Pro device.
In other words, the company is starting to actively engage the pieces of the puzzle to monetize its lead asset.
According to the release, the move is intended to allow the Company to facilitate its planned distribution under the current registration with the U.S. Food and Drug Administration while ensuring lower production costs and greater control of the manufacturing and distribution process. Furthermore, it will assist the Company with setting up its standard operating procedures under ISO 13485-2016, a requirement by Health Canada to register the Company’s eBalance Pro device as Class II medical device.
Mr. McEnulty, the Company’s CEO, stated: “Our team is very excited to continue moving ahead with our strategic plan. The new relationships that we secured with both the manufacturing facility as well as with our new suppliers is the next essential step to bring our eBalance Pro device to market.”
The next big step will likely be marked by distribution channel agreements. We don’t know a whole lot about how that piece of the puzzle will be shaped. But the manufacturing side of things is starting to shape up pretty well.
The market responded extremely well to the news, with shares of the stock leaping over 28% on the day. The trend is still your friend in this stock at the moment. And the flow of headlines out of the company suggests that friendship has a lot of potential.