Endra Life Sciences (NDRA) is a clinical stage medical device company we started following in April, 2019. The share price galloped up to a high near $3.30 in March in anticipation of the first data readout for the company’s lead product TAEUS (Thermo-Acoustic Enhanced UltraSound). While the technology platform has a plethora of potential applications it is initially being developed as a screening/monitoring tool for liver disease.
TAEUS combines heat and sonic frequencies allowing physicians to visualize tissue in ways only previously possible with MRI or CT scans. A human feasibility study compared the correlation between TAEUS, MRI, and non-TAEUS ultrasound measurements of liver fat content. Results reported on March 29th, 2019 lacked clarity and failed to live-up to the markets expectations. Consequently, the share price tanked 40% and has since been range bound. Today however, NDRA is trading up +14% as of 10:45 am PT. The driver seems to be a Form-4 posted today showing Endra Chief Technology Officer purchased 30K shares May, 16th at $1.13 per share.
Financials-Potential Offering Ahead
As of March 29th, 2019 NDRA had $3,925,474 in cash, no revenue, and a quarterly cash burn of $2,747,219. This means NDRA needs to raise money by the third quarter of 2019. With the spike in value today it would be logical for management to propose a public offering. It is possible for NDRA to arrange non-dilutive financing in the form of a credit facility or amendment to their partnership agreement with General Electric. Or, a brand new partnership with another company. The bottom line is they need money to fuel operations and its unclear how they will get it.
In my opinion, its safer to use today’s price action as an opportunity to get out of NDRA and re-enter after the company secures funding. There are several catalysts ahead in 2019. Additional data is expected this year as well as a controlled launch of TAEUS in Europe. I think playing the run-up to these events optimizes an investors risk-reward exposure.
Let’s get this bread!
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