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Early diagnosis specialist BioAffinity (NASDAQ:BIAF) soared 60% on Wednesday morning before paring some gains in the afternoon to around 40%. Investors piled into BIAF shares when the underlying company disclosed receipt of approximately $7.7 million in additional gross proceeds from its initial public offering ().
On September 6 of this year, the San Antonio, Texas-based biotech company announced the closing of its IPO. At the time, BioAffinity received “aggregate gross proceeds of approximately $7.8 million, before underwriting rebates, commissions and other offering costs,” according to the attached press release. Now, combined with proceeds from warrant exercises and other transactions, the company has raised approximately $15.6 million.
According to the latest announcement, BioAffinity intends to use proceeds from the IPO to expand existing operations and commercialization of CyPath Lung, a trademark. CyPath Lung is a “non-invasive test that detects the world’s leading cancer killer, lung cancer, at an early stage, when treatment is most effective.”
Additionally, the diagnostic platform is said to have: “shown high sensitivity and specificity in detecting early-stage lung cancer and is marketed as a laboratory-developed test (LDT) by Precision Pathology Services in San Antonio , Texas”.
BIAF Stock still faces an uphill battle
According to the American Cancer Society, “Lung cancer is by far the leading cause of cancer death, accounting for nearly 25% of all cancer deaths.” In addition, each year “more people die from lung cancer than from colon, breast and prostate cancers combined”. Fundamentally, and cynically speaking therefore, BIAF stock benefits from a large Total Addressable Market (TAM).
According to BioAffinity CEO Maria Zannes:
We are pleased to have completed the IPO process and are excited about the opportunities this funding and a presence on NASDAQ will bring. bioAffinity has the utmost confidence in the success of its business.
Although the basic thesis supporting the BIAF stock – early detection of lung cancer ultimately promotes superior patient outcomes – has an encouraging profile, investors should also realize that this diagnostics sub-segment involves a lot of trial and error. .
So, while BIAF stock is a big winner today, since the conclusion of its first public trading session, the stock has fallen by 63.5%. As with any speculative opportunity, potential participants should approach with caution.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.