Early diagnosis specialist BioAffinity (NASDAQ:BIAF) spiked 60% on Wednesday morning before paring back some gains in the afternoon to around 40% up. Investors piled into BIAF stock upon the underlying company disclosing the receipt of approximately $7.7 million in additional gross proceeds from its initial public offering ( ).
On Sept. 6 of this year, the San Antonio, Texas-based biotechnology firm announced the closure of its IPO. At the time, BioAffinity received “aggregate gross proceeds of approximately $7.8 million, prior to deducting underwriting discounts, commissions, and other offering expenses,” per the accompanying press release. Now, combined with the proceeds from the warrant exercise and other transactions, the company raised about $15.6 million.
According to the latest announcement, BioAffinity intends to use the IPO proceeds to expand existing operations and the commercialization of CyPath Lung, a registered 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.”
Further, the diagnosing platform has reportedly: “shown high sensitivity and high 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, making up almost 25% of all cancer deaths.” As well, each year, “more people die of lung cancer than of colon, breast, and prostate cancers combined.” Fundamentally, and cynically speaking then, BIAF stock enjoys a large total addressable market (TAM).
According to BioAffinity CEO Maria Zannes:
We are pleased to have concluded the IPO process and are excited about opportunities that this funding and a presence on NASDAQ will bring. bioAffinity has the utmost confidence in the success of its business.
Although the core thesis bolstering BIAF stock — early detection of lung cancer ultimately promotes superior patient outcomes — presents an encouraging profile, investors should also realize this diagnosis subsegment features many trials and errors.
Therefore, while BIAF stock is a big winner today, since the conclusion of its first public trading session, the security slipped 63.5%. As with any speculative opportunity, prospective participants should approach with caution.
On the date of publication, Josh Enomoto 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.