IsoPlexis (NASDAQ:ISO) stock is jumping more than 80% today on news that the company will join forces with Berkeley Lights (NASDAQ:BLI). The two names will combine into a new company called PhenomeX.
Berkeley will pay $57.8 million in BLI stock as part of the acquisition deal. As a result, ISO shareholders will have a 25% stake in PhenomeX while Berkeley shareholders will own the rest. The two companies say in a press release that PhenomeX will be a “functional cell biology company.”
Shares of ISO stock are climbing higher as investors analyze this deal. Here’s what investors should know about the Berkeley Lights-IsoPlexis combination.
What’s Happening With IsoPlexis?
Based in Connecticut, IsoPlexis is “known for its proteomic barcode chips that allow doctors and researchers to analyze all of a cell’s proteins and see how a person’s immune system would likely respond to different treatments.” The idea is to personalize cancer treatment and refine immunotherapies.
IsoPlexis came public back in October 2021 and traded as high as $15.70 just a month later. However, yesterday it closed the day at just 69 cents. In a Form S-1 last year, the company claimed $3.2 million in revenue for the first quarter of 2021, double the figure for Q1 2020. Meanwhile, the net loss for Q1 2021 came to $15.6 million. Looking forward, analysts expect IsoPlexis to reach $27 million in revenue for 2023.
As of this writing, IsoPlexis has a market capitalization of just $50 million. The difference between the offering price and that market cap is due to the deal being an all-stock transaction. The final value will depend on the value of BLI stock at the time of closing.
For Q3 2022, Berkeley Lights lost $21.5 million on revenue of $21.3 million. The company reported nearly $135 million in cash and marketable securities at the end of the period as well. As of this writing, Berekeley has a market cap of around $167 million. Analysts expect revenue of roughly $100 million next year.
All told, this is the kind of 1+1=1 deal you find near market bottoms. The two companies are combining to continue IsoPlexis’ work using Berkeley’s cash, hoping something valuable will emerge from the combination.
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On the date of publication, Dana Blankenhorn did not hold (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.