Zacks spotlights cancer and sepsis test developer VolitionRx as undervalued
Zacks Small-Cap Research (Zacks SCR) published a report last week on VolitionRx, which develops and sells early-detection tests for serious diseases. It set a target price for the stock of $3.60 per share, five times the closing price as of Friday, August 30, noting the company’s expanding distribution network and work to cut costs and sign licensing agreements.
Details
In its report, Zacks SCR says that VolitionRx stock could rise to $3.60 per share, versus the $0.72 per share closing price on Friday, meaning 400% upside. It has been flat since the beginning of the year but is off more than 43% over the last 12 months.
According to MarketWatch, four analysts cover VolitionRx. Three recommend buying the stock, while one has it as a hold, with an average target price of $3.28 per share.
About VolitionRx
Through its subsidiaries, VolitionRx produces early-detection tests to help diagnose diseases in both humans and animals. For example, its Nu.Q technology, according to the company, can detect epigenetic changes before a standard biopsy and before the appearance of initial symptoms. The technology underpins its veterinary cancer tests and tests for detecting NETosis, a form of cell death found in patients with sepsis, cancer, and other conditions.
Highlights of the Zacks report
— The company continues to cut costs, aiming to achieve a $10 million reduction in annualized expenses and be cash flow-neutral in 2025. For the second quarter of 2024, operating expenses decreased 24.4% to $7.39 million. Moreover, as Zacks SCR notes, any cash bonuses have been indefinitely postponed and the compensation structure for board members and top executives has been adjusted for a period of at least six months — up to 50% of their fees and salaries are to be paid in equity.
— VolitionRx’s veterinary tests are now available in 17 countries. In the second half of the year, sales momentum is expected to accelerate, driven by two large distributors launching the Nu.Q Vet Cancer test: Antech Diagnostics (part of Mars Petcare) has announced the launch in the U.S., Europe, Australia, India, and Singapore, while Fujifilm Vet Systems has been selling the product in Japan since July 1.
— The VolitionRx management is focused on signing a licensing agreement “in the human space,” according to Zacks SCR. The company says its strategy is to monetize its intellectual property through licensing, allowing it to earn royalties. Human tests are still undergoing trials, with results potentially being presented as early as this month, while a licensing agreement could be signed within the next three quarters, Zacks SCR believes.
In the second quarter of 2024, VolitionRx’s revenue jumped 83% to $395,797. Zacks SCR expects it to reach $1.9 million for the full year, 2.4 times the 2023 figure.
