Should Investors Take The Dive In Nanosphere?

Shares of Nanosphere, Inc. (NASDAQ: NSPH) are up approximately 10 percent on Tuesday trading, following the FDA provided 510(k) clearance for its Verigene Respiratory Pathogens Flex Nucleic Acid Test (RP Flex).

According to a press release, “The first test of its kind, RP Flex features Nanosphere's novel Flex(TM) software, which allows the 16 viral and bacterial targets identified by RP Flex to be reported as a full multiplex panel or in various user-defined subsets.

“Labs pay for only the targets ordered for each patient sample. The flexible panel concept addresses the varied respiratory testing needs of labs and clinicians with a single comprehensive, yet cost-effective solution.”

Related Link: Nanosphere Receives FDA Clearance For First-Of-Its-Kind Flexible Respiratory Pathogens Test

Chardan Initiates At Buy

After the announcement, Chardan analyst Keay Nakae initiated coverage on Nanosphere’s stock with a Buy rating and $3.30 price target. According to a note rolled out Tuesday, the company’s technology platform – the Verigene System, can assess highly complex “assays in human biology and infectious disease,” on a low-cost, easy to use platform, which allows for small laboratories and hospitals lacking “advanced diagnostic capabilities, to perform genetic testing.”

Biotech Is A Catalyst

Furthermore, the expert expounded, “This type of technology is facilitating the current conversion taking place in the market from traditional culture-based analytical methods to new molecular biology based on DNA, RNA, and proteins, which is being driven by the need for rapid and clinically actionable results that facilitate improved patient outcomes, and improved healthcare economics.”

Additional Catalysts For Nanosphere

Other elements that Nakae took into account when issuing a Buy rating included the potential to drive revenue growth that the company’s expanding customer base and menu of tests provide, in addition to the overly conservative estimates following a recent earnings miss.

The expert assured that Nanosphere looks like “an intriguing speculative micro cap investment story,” adding that he believes that “there could be substantial market demand for the company's current menu of diagnostic tests, as well as other tests the company plans to develop” and that increasing revenue and widening gross margins should drive the stock price up going forward.

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