BG Medicine (BGMD) Spikes on Strong 2013 Earnings

Joel Anderson  |

Shares in small-cap medical test maker BG Medicine (BGMD) saw gains that exceeded 30 percent on March 20 following the release of Q4 and FY earnings for 2013. This comes just two days after speculative buying ahead of the earnings report appeared to spark a short squeeze that pushed shares up over 25 percent.

Those investors who were buying in on March 18 in anticipation of today’s earnings report weren’t disappointed. The results were clearly positive for 2013, with full-year revenues up 45 percent from $2.8 in 2012 million to $4.1 million in 2013, full-year net losses narrowed 33 percent from $23.8 million in 2012 to $15.8 million in 2013, a 31 percent year-over-year decline in operating expenses, and a 28 percent decrease in operating cash burn from $21.3 million to $15.3 million.

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"In 2013, we addressed the fundamentals of our business." said President and CEO Paul R. Sohmer, M.D. "We prioritized our actions and investments around what we believe are the key drivers of adoption of our BGM Galectin-3 Test. We refocused our commercial strategy and restructured our clinical research and discovery programs. In so doing, we exceeded our guidance for the year-ended 2013 for both revenue growth and reduction in operating cash burn."

The company also took the time to report that on Mar. 18 the US Patent and Trademark Office issued patent 8,672,857 to BG Medicine for its Galectin-3 test, something that may shed more light onto that day’s trading action.

"The issuance of this patent both strengthens and broadens BG Medicine's patent portfolio covering galectin-3 testing," said Sohmer. "We will continue to aggressively pursue the protection of our intellectual property related to galectin-3."

BG Medicine gapped up 21.9 percent to $2.06 a share at the opening bell and picked up momentum early, hitting a peak of $2.36 a share that was good for a new 52-week high. Prices retreated to close to between $2.10 and $2.15 as the morning wore on, which was still good for gains in excess of 25 percent.

The day also sent BG Medicine crashing through a key technical barrier as it cleared a rising resistance line that had developed at the beginning of October 2012, making for a positive breakout from the rising trading channel that BG had been trading in over that period.

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