The rise of Covid-19 has cast a new light on many aspects of our healthcare system. One such area is that of respiratory technology. And one company operating in that space has some good news to report. Today began with an announcement from Inspira Technologies (NASDAQ:IINN), a company known for advances in respiratory support technology. The company, based in Israel, has signed a distribution agreement that promises to expand its reach across several U.S. states. Since the news broke, IINN stock has been shooting up all morning, rising since premarket trading.
What’s Happening With IINN Stock
After markets opened this morning, IINN stock shot up more than 38%. Despite a slight downtick, it was quick to rebound and isn’t showing any signs of slowing down. As of this writing, it is up more than 33% within the first hour of trading. This growth spurt comes after a period of flatlining. During the past week, IINN hovered around $2.30 per share, only briefly rising above $2.50. Currently, it trades at $2.81 at the time of writing.
Even with today’s growth, though, the stock is still down considerably from where it was when the year began. While it is up 22% for the week, it remains in the red by almost 31%. However, the growth it experienced late in 2021 was likely due to the mounting short interest surrounding IINN stock, which has since quieted down.
Why It Matters
Just what is the distribution deal that has IINN rising by so much? According to a statement released by the company, it has entered into an exclusive summary distribution agreement with Glo-Med Networks, a company created to provide easy access to pharmaceutical products. Its primary focus is on meeting the demand for medical technology. In the age of Covid-19, there has been plenty of demand for respiratory devices.
Inspira President and Chief Financial Officer Joe Haydon described the agreement as “an important milestone in the company’s strategy to setup the infrastructure to penetrate the U.S. market.”
That certainly seems to be true. The agreement means that Inspira products will be distributed across six U.S. states — Texas, New Jersey, New York, Florida, North Carolina and South Carolina. If they are well received in these states, which represent large medical technology markets, other states will likely follow. Covid-19 cases are declining in some states, but there are still plenty still battling rising infection rates. Additionally, the rise of the “stealth” omicron variant has given medical experts cause for concern that the pandemic may be prolonged even further. This is a good time to be cornering the market in an area of healthcare that has grown significantly over the past few years and isn’t going away anytime soon.
What It Means
The last time Inspira announced a distribution agreement, IINN stock shot up. We saw it in early December 2021 when the company signed a similar deal with Innovimed. It can be difficult for micro cap companies to rise above the penny stock level, but Inspira is the type of company that can do it. It is operating in an emerging market and working hard to corner it, teaming up with companies that can help get its products into the hands of people who need it.
Investors who are considering a bullish play on med tech stocks should certainly be keeping an eye on Inspira. Penny stocks can be daunting for some, but this is the type of company that has the potential to grow significantly. IINN stock is certainly worth watching.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.