Zomedica (NYSEAMERICAN:ZOM) stock has suddenly roared to life. Shares were lingering well under 50 cents each, but then soared nearly 300% so far year-to-date.
There’s an apparent reason for the big run-up. Carole Baskin, one of the lead characters of the Netflix (NASDAQ:NFLX) series Tiger King: Murder, Mayhem and Madness, gave the company a solid endorsement.
As Zomedica is a company focused on animal health, this endorsement made sense and retail traders flocked to the stock.
That’s not all though. It’d be easy to dismiss Zomedica as just a random penny stock flying due to celebrity endorsement. However, the business does appear to have some merit as well, thus warranting a closer look. Particularly as the firm is set to begin generating revenues soon.
Carole Baskin Puts Zomedica On The Map
About a year ago, Netflix released its documentary series about Joe Exotic, who raised numerous large cats at his ranch in Oklahoma. Over the course of his business, he developed certain enemies, such as Baskin, who has her own wild cat sanctuary.
Baskin was a prominent figure in the show and gained significant notoriety as a result of the documentary. Netflix’s timing on the series was just right, with people bored and stuck at home at the start of the pandemic, Tiger King became an internet sensation.
Fast-forward to today, and now Baskin has used her influence to bolster ZOM stock dramatically. In a video, she stated that: “I don’t know if you guys have heard about Zomedica, but they help our veterinarians and our furry friends.” She added that she was “definitely invested in finding out more,” about Zomedica. ZOM stock exploded higher once that video was widely shared.
Adding a plot twist to the story, however, according to Yahoo Finance, Baskin later clarified she had no financial interest in the company. Rather, she had been paid on a video request website to put in a positive word about Zomedica. Regardless, the cat was already out of the bag; ZOM stock had blasted off on the first wave of attention and hasn’t looked back since then.
Why Zomedica Shares Are Holding Up
If Zomedica went up primarily due to a social media influencer and she later clarified that endorsement, why hasn’t ZOM stock gone back down? Simply put, Zomedica has some real positive fundamentals in its business. While Baskin may not have offered a particularly profound opinion on Zomedica, this is indeed a potential inflection point for the company, nonetheless.
Zomedica is working on three different products for animal health. For starters, there’s a point-of-care pathogen detection program, and a canine cancer liquid biopsy platform. Both of those, however, are still in clinical development. The exciting one is Truforma, the company’s point-of-care biosensor program. Veterinarians can use Truforma to identify thyroid problems in cats and dogs. It uses bulk acoustic wave (BAW) technology also found in other leading detection systems such as radars.
Truforma is ready to go. In fact, in November, the company announced that it will begin commercialization of Truforma by March 31 of this year. To that end, the company also just inked a distribution deal for its Truforma platform.
CEO Robert Cohen said in November that:
“It certainly is a pleasure to be able to deliver such good news for our shareholders, employees, partners and, especially, the veterinarians whom we serve […] It is a credit to all of our employees and their laser focus on advancing Truforma over the last many months that we are able to move into this final phase as we approach the commercial availability of our first product. I very much look forward to being able to report our first sale following launch.”
ZOM Stock Verdict
Zomedica is far ahead of most of its small biotech and medical device peers in one regard: It actually has a product set to start generating commercial revenues. Few small-cap biotech firms ever reach that point.
So, as an investor, you can look past Zomedica’s low share price. This is a credible business and management team with a real shot at success.
Will it work? As with most health care companies, it’s good to never bet the whole ranch on one in particular. It’s hard for outside investors to really know if the science behind a company’s platform is really that far ahead of rivals or not. That said, Zomedica is heading for commercial revenues shortly.
We should get a good look at whether or not there’s real consumer demand for its products. For now, that’s enough to keep ZOM stock in the spotlight.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.