Mainz Biomed (NASDAQ: MYNZ) stock may present a value investment opportunity too good to ignore. In fact, a move higher is the likely path of least resistance for this thinly traded molecular genetics diagnostics company. They have a well-fortified balance sheet, best-in-class early cancer detection tests, and a management team that’s part of a Who’s Who list in biotech management fueling that proposition.
But there’s more to validate that case. Like most smallcap biotechs in this turbulent market, MYNZ stock has disconnected from its fundamentals and pushed lower despite reaching milestones. These include successfully raising $25.8 million (gross) in new capital, having less than $1 million in long-term debt, and generating revenues from an early cancer detection diagnostics portfolio.
Those diagnostics products, their primary value drivers, are impressive. They also provide multiple shots on revenue-generating goals. And not just from its flagship ColoAlert colorectal cancer diagnostic test, which targets a massive market opportunity. They have another value driver in PancAlert; its pancreatic cancer detection test. It also reached multiple preclinical milestones supporting its development as a first-in-class diagnostic for this deadly cancer indication.
Thus, positioned better than at any time in history to accelerate growth, with cash and products supporting its mission, MYNZ is an investment consideration based on merit, not hype.
Flagship Product ColoAlert Fuels Growth
A considerable part of the value proposition is inherent to its flagship product ColoAlert, an accurate, non-invasive, and easy-to-use early detection diagnostic test for colorectal cancer. It’s more than an excellent screen; it’s also generating revenues, marketed across Europe and the United Arab Emirates. While a great start, it’s just that.
Mainz Biomed is advancing its pivotal FDA clinical study in 2022 for U.S. regulatory approval. Notably, MYNZ announced receiving supportive feedback from the FDA on ColoAlert’s pre-submission package, setting up its pivotal U.S. clinical trial to commence in Q4 2022. Also, consider ColoAlert an excellent product that could be made even better, with MYNZ initiating and enrolling the first patient in an international clinical study (ColoFuture) evaluating the integration of novel mRNA biomarkers into ColoAlert. If results post as expected, ColoAlert, already a best-in-class diagnostic screen, could score an upgrade, reaching “gold standard” status for CRC at-home testing.
Still, while that’s an excellent shot on goal for the future, don’t ignore the inherent value today. Mainz reported key milestones reached during the first half of 2022, including announcing high-profile partnerships with leading laboratories like Labor MVZ Dr. Stein + Kollegen, more commonly known as “Laboratory Mönchengladbach,” and with Dante Labs. Those agreements should expedite market penetration in Germany, Italy, and the United Arab Emirates. Don’t underestimate the near-term value they can deliver.
Laboratory Mönchengladbach is one of the largest diagnostics laboratories in Germany, servicing over 2,500 physicians, processing over five million samples annually, and screening approximately 1,000 patients per week specifically for colorectal cancer. Dante Labs is a global leader in genome sequencing with product development and commercial franchises in multiple international regions focused on providing preventive healthcare solutions to consumers and healthcare professionals. Those two add to other core partnerships, including a significant one with GANZIMMUN Diagnostics AG, one of Europe’s leading preventive and complementary medicine laboratories, which processes approximately 5,500 laboratory orders daily.
And with former Abbott and Luminex executive Darin Leigh as its Chief Commercial Officer leading international market development, more deals may be forthcoming. Still, MYNZ isn’t a pure international play. Factoring in the potential from ColoAlert exploiting massive U.S. market opportunities, the combined revenue potential suggests that MYNZ’s share price is not fairly valued.
There’s more to support that case.
Another Value-Creating Asset, PancAlert
In addition to the value inherent to ColoAlert, Mainz Biomed is advancing a second portfolio asset, PancAlert, an early-stage pancreatic cancer screening test based on real-time Polymerase Chain Reaction-based (PCR) multiplex detection of molecular-genetic biomarkers in stool samples. In layman’s terms, because of its accurate real-time results, it, too, can be a first and best-in-class screening for pancreatic cancer. Milestones reached in its development have also been published.
In May, MYNZ announced that PancAlert met multiple preclinical milestones supporting continued development, including achievement of specificity target, collection of a set of characterized clinical samples, selection of potential biomarker candidates, and the development of a prototype biomarker test. Research evaluation is being done to determine if a clinical trial is warranted. Considering that the project commenced in 2020 with a grant from the German Federal Ministry of Education and Research to develop a non-invasive early detection test for pancreatic cancer, moving forward, especially with supportive data, is likely.
It’s a needed test. Roughly 466,000 lives are lost each year globally from pancreatic cancers, making it the seventh leading cause of cancer-related death worldwide. Worse, it has one of the lowest cancer survival rates due to typically late detection and poor outcomes with standard-of-care treatment(s). In fact, the 5-year overall survival rate is approximately 11% in the U.S. and 9% globally. But results don’t have to be dire; early diagnosis raises the survival rate significantly, substantiating the rationale behind launching its PancAlert initiative.
Other milestones reached support the bullish MYNZ proposition.
Multi-Center Study Underway Assessing mRNA Biomarkers
In June 2022, Mainz announced the first patient enrolled in an international multi-center clinical study (ColoFuture) assessing the potential integration of a portfolio of novel gene expression (mRNA) biomarkers into ColoAlert. The mRNA biomarkers, acquired from the Université de Sherbrooke in January 2022, result from the institution’s pioneering work in the field, where researchers tested multiple novel transcriptional biomarkers using colorectal cancer and pre-cancerous lesion samples.
The next step is, of course, to evaluate the effectiveness of these biomarkers. MYNZ is doing that in a study intending to enhance ColoAlert’s technical profile and extend its capability to identify advanced adenomas (A.A.), a pre-cancerous polyp often attributed to colorectal cancer. Endpoints also include increasing ColoAlert’s diagnostic sensitivity and specificity rates. Results from this over 600-patient study are expected to be published in early 2023. Here’s the potentially best news.
If results are positive, ColoAlert could become the market’s most robust and accurate at-home diagnostic screening test. Not only by detecting cancerous polyps with a high degree of accuracy but also by potentially preventing colorectal cancer through early detection of pre-cancerous adenomas. Better still, data results from the ColoFuture trial could be included as a part of ColoAlert’s pivotal U.S. clinical study, which could help influence a positive outcome there.
Make no mistake, better products are needed. Colorectal cancer is the second most lethal cancer in the U.S. and Europe but also the most preventable, with early detection providing survival rates above 90%. Through diagnostics like ColoAlert, early detection can help save many of the approximately 149,500 new colon and rectal cancer cases in the U.S. each year. In 2021, a reported 52,980 people died from colorectal cancer.
That led the FDA to suggest screening with stool DNA tests such as ColoAlert be conducted once every three years starting at age 45, exposing a market of more than 112 million people in the U.S. above the age of 50, a number expected to increase to 157 million within 10 years. If these people follow FDA guidance, US-based testing of this population equates to a market opportunity of approximately $3.7 Billion per year. In the biotech sector, that qualifies as a blockbuster opportunity.
A Sum Of Its Parts Bullish Proposition
And that’s just one market. Targeting other multi-billion dollar cancer screening markets with first-in-class diagnostics tests strengthens the value proposition; that’s not all. Investors taking advantage of an apparent valuation disconnect also get exposure to a company with a mid-year cash balance of over $26 million, minimal debt, and a top-tier management team fluent and successful in developing and marketing products. That’s not the biggest attraction.
They are also buying into a company that is getting stronger, advancing studies, and penetrating global markets to maximize revenue-generating opportunities related to two of the most lethal cancers. And with supportive FDA guidance for its U.S. trials and commercialization expanding overseas, near-term growth is more than a target; it’s in the crosshairs.
Thus, Mainz Biomed tells a story much different from what its share price suggests. Remember, they have no need to go to the capital markets and minimal debt; those metrics support higher, not lower, share prices. Still, the current disconnect is not necessarily bad news; it does expose a window of opportunity for investors seeking low-priced entry into promising companies. And with a compelling sum total of its parts, Mainz Biomed makes that list.
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