CEMI new 52-week high is at $0.54 and it was noted during the trading session yesterday. CEMI closed then the market at $0.525 with a 9.37% increase in the price. Trading volumes also keep increasing, to reach nearly 664,000 traded shares yesterday, which is more than 13 times higher than the average for this stock. Thus, CEMI has more than doubled its value in less than six months.
Chembio Diagnostics has operational results that are more than unusual for a penny stock, making revenues in millions per year from the sale of its diagnostic tests and other related products, as well as from milestone payments and grants. Last year, the company also achieved the first commercial shipment of its DPP® HIV oral fluid HIV test in Brazil. Operating profit for the quarter ended December 2010 was over $1.9 million, more than ten times higher that the previous quarter and the company’s net income exceeded $1.88 million for the last three months of 2010.
The news from yesterday morning was that Brazil’s Ministry of Agriculture, Livestock and Food Supply (“MAPA”) has approved Chembio’s Dual Path Platform (DPP®) visceral canine leishmania rapid test for use with whole blood, serum and plasma. That approval has triggered a $305,000 milestone payment to Chembio, promises $2.4 million in additional revenue in the next year and a half and this is the third DPP® test developed by Chembio to receive regulatory approval in Brazil in the last ten months and the first approved by MAPA.
At this point it looks like dilution could in the future affect adversely the share price of CEMI stock. The company still needs to develop further its sales and branding program, as well as proceed with the approval and commercialization of its products in the USA. This would require costly investments, possibly higher expenses and the raising of additional capital.
