A moment I was waiting for

Yesterday after the market close, news broke out that TrovaGene (TROV) fired both its CEO and CFO and has sued them for breach of fiduciary duty. The news immediately triggered a 50% decline of its share price at the extended hours. This is kind of moment I was waiting for to get shares of TROV I’d like to accumulate when it was on sale. A huge sale for this time! Unfortunately I did not notice this immediately during the night and only found this out this morning. “Bad” enough for me that TROV had already recovered half of its loss overnight in the early morning before the market opened but fortunately enough that it was still down for over 20% at that time. So I went ahead to buy some at the extended hours prior to the opening and hoped to buy more if it continued to decline after opening. But I didn’t get further luck as I was hoping for.

 

So what is TrovaGene that makes me so interested in it?  Well,  TrovaGene is kind of two companies in one - a small medical laboratory... and as a biotech research firm.  It holds the proprietary technology and unique tests that make it possible for oncologists to bypass traditional surgical biopsies and use urine-based tests to screen for certain cancers. That’s why it is called a “Liquid Biopsy” biotech. Without getting into too much complicated details, the main approach for cancer screen and confirmation at the moment still largely relies on invasive biopsy, which often is painful and inconvenient. You may imagine if by a simple non-invasive blood or urine testing most of cancers can be screened or eventually verified, what kind of market it would be! If you'd like to learn more about liquid biopsy, The New York Times has featured a story entitled  "Sidestepping the Biopsy With New Tools to Spot Cancer," (for paid subscribers only), or you can read this more scientific article,   Real-time liquid biopsies become a reality in cancer treatment for free.

 

Of course, we are talking about a new technology still at its infancy but it has already passed the concept stage and already in reality for screening for some types of cancers. TrovaGene is certainly one of the leading biotech’s that has already got some mature products in the market. I believe it has already signed at least 3 deals with some major healthcare providers to cover its testing. The most recent one is a healthcare-coverage deal with Fortified Provider Network, a benefits administrator with more than 4 million members nationwide. Commented by  Matt Posard, TrovaGene's chief commercial officer,  "Becoming a Fortified Provider Network member is an important milestone for TrovaGene, as we expand the number of covered lives with health insurance access to our [PCM] technology,"  "We continue to execute on our strategy to commercialize our novel liquid biopsy platform, and we look forward to playing a significant role in improving the care of Fortified's cancer patients with our non-invasive tests for the detection and monitoring of medically relevant oncogene mutations." Clearly TROV play is gaining traction as an ongoing business and we don’t often seen such a good sign this young and so early in small microcap biotech companies. That’s why I’m so interested in this company obviously for long-term as I expect TROV may someday become a major very successful biotech when liquid biopsy becomes more and more mature as a technology and more widely used to eventually replace traditional biopsy. It is a huge market to open up and TROV has already shown its leadership in exploring the very lucrative frontier! You may now understand why I want to accumulate TROV shares on its weakness, especially when it is on sale not due to business problems. I think the reaction to firing its CEO/CFO is a bit too much overdone and likely short-lived. I wish I had grasped the initial reaction movement to get in with a 50% discount but a 20% discount is not too bad as well. Of course, short-term there is no way to know if TROV will simply recover from here or it will further decline but I will be ready to buy more on its next sale, if it is not associated with business issues.


By the way, at close today, TROV has virtually fully recovered with only a -2% decline. What kind of an overreaction! I wish this could happen everyday!!!