Cell MedX Corp (OTCMKTS:CMXC) is a stock we have been following extremely closely over recent months, generally on the bullish side given corporate fundamentals and share technicals. In our latest piece, a few days ago, we stated that we thought the stock was likely to move to new 52-week highs over coming days given its overall bearing and the feel of the market as well as the tape in the stock.
Well, yesterday, that’s exactly what we saw: a fresh breakout. Now, the big question is: can the momentum continue? To answer that question, it’s useful at this point to step back and take a big-picture look at the stock and the overall business strategy.
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 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 company has moved now 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.
Building a Trend
As discussed above, CMXC has been back in breakout mode. The company’s proprietary “eBalance technology” is in the research and development stage to manage diabetes mellitus and its complications, representing the company’s most important strategy and asset.
The diabetes market is massive and unfortunately growing: 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.
Hence, any company with any chance of growing market share in this treatment space has a chance at massive financial success down the line just given the scale of the market in question.
Last Wednesday, 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.
This catalyst really rounds out the story for the company and may help push the stock for a true continuation move, now that the new breakout is truly in play.
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.”
Note that, supporting the trend, this latest catalyst comes on the heels of the company’s registration with the FDA as a Class II non-exempt device.
On that note, Mr. McEnulty stated: “Our registration with the FDA is an exciting step forward, and I’m happy to see that our Observational Clinical Trial is also progressing as scheduled, which together will get us that much closer to reaching our end goal of helping people improve their lives and well-being.”
The stock has been red hot ever since.