BG Medicine (BGMD) Climbs to New 52-Week High on Publication of Study Results

Joel Anderson |

Stock in small-cap medical test-marker BG Medicine (BGMD) shot up over 40 percent in early trading on Tuesday after the American Heart Journal published results of an analysis of data from three studies that showed elevated levels of the protein galectin-3 in blood, as detected with BG Medicine’s BGM Galectin-3® Test, was a significant predictor of hospital readmission for heart failure.

The study, which combined data from three multiclinical research trials conducted in the United States and totaling 902 heart failure patients who were placed into the low-risk category at discharge due to traditional clinical indicators, showed that those heart failure patients with elevated galectin-3 levels were readmitted at a rate 3 times higher than those without elevated levels. This increased risk also continued after 30, 60, and 120 days.

"We believe that this analysis of data from three significant clinical research trials further affirms the previously reported utility of galectin-3 testing as an aid in assessing the prognosis of patients with heart failure when used in conjunction with clinical evaluation," said BG Medicine President and CEO Dr. Paul R. Sohmer. "The identification of heart failure patients who are at significantly elevated risk for unforeseen events may facilitate the care of heart failure patients and help control the cost burden of this disease on healthcare systems worldwide."

The results published in the American Heart Journal meant results on Wall Street as well. The stock opened up 11.2 percent at $1.89 a share and quickly took off from there, peaking at $2.42 a share about a half-hour after the opening bell. While reaching gains in excess of 40 percent, the stock pulled back significantly to just over $2 a share and gains just above 20 percent. Volume was extremely heavy, with more than 12.25 million shares moving before noon despite an average daily volume under 2 million.

The $2.42 a share peak represents a new 52-week high for BG Medicine, which has proved volatile in recent days with multiple double-digit upward swings in value.

It’s been a wild year thus far for BG Medicine. The stock took off on the first trading day of the year after the Centers for Medicaid and Medicare Services (CMS) raised the national limitation amount (NLA) for the BGM Galectin-3® Test.

Of course, it has been the last week that has really seen BG Medicine’s stock significantly yo-yo. Shares took off on Mar. 18 when pre-earnings report enthusiasm and the approval of a patent for the galectin-3 test combined to help spark a short squeeze that pushed shares up more than 25 percent.

Two days later, the release of the company’s Q4 2013 earnings report on March 20 sparked another buying spree when losses proved narrower than projected by analysts, pushing the stock to what was at the time a 52-week high at $2.30 a share.

At least some of the enthusiasm for BG Medicine can be attributed to the shifting focus towards preventive medicine and reduced cost emphasized in the Affordable Care Act (ACA), also known as Obamacare. This is particularly true for hospital readmissions, which have gotten a particular focus during the debate over health care reform for being costly and avoidable. As such, the results of the American Heart Journal study could be viewed as especially positive, indicating that BG Medicine’s lead product appears to fit well into larger market trends.

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