Cell MedX Corp (OTCMKTS:CMXC) shares have been swinging back and forth in a wide range so far in 2017, with a mostly upward bias. The overall trend turned in late 2015 and early 2016, during which time, the stock has gained several hundred percent and positioned itself above the major long term moving averages, which are holding an upward slope at this point. The pullback we have seen provides an opportunity to take a fresh look at the stock and update our take.
The narrative for this stock, for those who are new to the story, is tightly tied to its eBalance device, a proprietary method for the application of bioelectric signaling to treat diabetes and related ailments. CMXC recently registered with the FDA as a Class II non-exempt device for its flagship product, the e-Balance device. In addition, CMXC management hit the wires with the announcement that 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. That process moves the company solidly onto a playing field dominated by the likes of Novo Nordisk (NYSE:NVO), Insulet (NASDAQ:PODD), and DexCom (NASDAQ:DXCM) as they bring their technology inexorably to market.
Cell MedX Corp (OTCMKTS:CMXC) bills 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, as noted above, 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.
The Big Question
As discussed above, CMXC shares have been chopping sideways in an upward biased pattern over the past year. The stock has been trading solidly above its major trend moving average, which is sloped to the upside. The trend is being driven by the company’s unique approach to a massive end market.
There are over 382 million people today living with diabetes. That number is expected to nearly double over the next generation. 8 out of 10 countries in the world will spend something approximating 10% of their national healthcare spending on treatment of diabetes. By the year 2030, it is estimated that global diabetes-related expenditures per annum will reach nearly a half trillion dollars.
The company’s most recent press release is potentially a signal of coming acceleration on the operational side, and bears directly on investor expectations where revenue growth is concerned. Specifically, the company announced that its Canadian subsidiary 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.
According to the press 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.”