PBIO Is Making Significant Progress (PBIO)

PBIO Is Making Significant Progress

Grant Zeng, CFA

Advantages of PCT highlighted in multiple scientific presentations and publications

Recently, independent researchers from academia, government, pharma, and the biotechnology industry have reported significant advantages when using PBIO’s pressure cycling technology (PCT) platform in their critical sample preparation processes. The presentations were made at several major scientific conferences. The studies involved such important areas as biomarker discovery, therapeutics, and vaccine development.

Several of the conferences where scientists presented on the use and significant advantages of PCT are listed below:

American Society for Mass Spectrometry (ASMS) Annual Meeting

Presenting scientists were from Pacific Northwest National Laboratory, DOE (Richland, WA); FDA-CFSAN (College Park, MD); Merck Research Laboratories (West Point, PA); and Centocor R&D, a division of J&J PRD (Radnor, PA).

Data were presented on the use of PCT to rapidly, effectively, and efficiently characterize certain proteins used in the development of bio-therapeutic drugs; to be the driving force behind an automated, in-line, on-demand high throughput protein digestion module; to help in the identification of strain specific bacterial markers; to help identify new proteins of interest as potential vaccine targets; and to significantly reduce the time required for the characterization of monoclonal antibodies (bio-therapeutics), with a concomitant increase in quality.

2011 Meeting of the European High Pressure Research Group

Presenting scientists were from the Barnett Institute of Northeastern University (Boston, MA); the University of Debrecen (Hungary); and the University of Massachusetts (Boston, MA).

Data were presented on the significant advantages of PCT in the analysis of glycoprotein-based drugs and drug candidates; on the development of industrial processes that use high pressure to minimize the production of waste materials and to reduce/eliminate the need for hazardous chemicals (“green chemistry”); and on the development of an automated, high pressure generator capable of real-time, unattended pressure control up to approximately 58,000 psi.

American Society for Microbiology (ASM) Annual Meeting

The presenting scientist was Dr. Mark Lawrence of Mississippi State University. Data were presented on the use of PCT to help determine the composition of microorganisms in the core of oil wells. Dr. Lawrence indicated that PCT was invaluable in allowing them to isolate bacterial DNA from the community of microorganisms associated with oil deposits. They also indicated that understanding the bacterial community in petroleum deposits was important for the development of improved methods of oil recovery from oil fields.

Grant awards further validate PBIO’s PCT technology

On September 6, 2011, PBIO was awarded a $160,978 SBIR Phase I grant (1R43GM090582-01A1) from the National Institute of General Medical Sciences (NIGMS) of the National Institutes of Health (NIH) to fund the development of a high pressure system for the automated processing and preservation of tissue samples to facilitate, standardize, and improve the tissue fixation process independent of sample size and tissue type.

Further on October 13, 2011, PBIO was awarded a $649,498 SBIR Phase II grant (W81XWH-10-C-0175) from the U.S. Department of Defense (DoD). Entitled “Development of a Universal Method for Diagnostic Sample Inactivation, Extraction, and Enrichment of Pathogens in Arthropod Hosts of Military Importance”, this grant will help fund the development of an automated, high-throughput, high pressure system (instrument and consumables) for the safe and accurate processing of pathogenic organisms (viruses and bacteria). The system will be based on the Company’s patented, powerful, and enabling pressure cycling technology (PCT) platform.

All these grant awards are important. They not only provide a non-dilutive funding for the Company, therefore boosting the Company’s balance sheet, but also further validate the Company’s PCT platform technology.

Richard Schumacher, CEO of PBIO, further discusses the grants the company has been awarded in the video below.

CorVideo Executive Interview with Richard Schumacher, CEO – Pressure Biosciences 101811 from Scott Gordon on Vimeo.

Capital structure is simplified

On October 18, 2011, PBIO announced that all remaining holders of its Series A and B convertible preferred stock have voluntarily converted their shares into common stock of the Company. As a result of these conversions, one-hundred percent (100%) of the Company’s 345,314 shares of Series A and B convertible preferred stock have now been retired, and 3,453,140 shares of the Company’s common stock have been issued to the converting shareholders. The Company now has approximately 6,500,000 shares of common stock outstanding.

We believe the conversion eliminates preferred stock dividend, simplifies capital structure, and increases float. This makes the Company much more attractive to the investment community.

Because of these and other reasons, we believe PBIO should be able to raise the capital necessary to support its continued operations and growth plan during the second half of 2011 and beyond.

What are the implications for PBIO?

PBIO is a life sciences company engaged in the research, development and commercialization of a novel, enabling platform technology called pressure cycling technology (PCT). The Company’s current product portfolio includes Barocyclers, PCT based instruments, and consumables, which include PULSE (Pressure Used to Lyse Samples for Extraction) Tubes as well as application specific kits (which include consumable products and reagents). The instruments and the consumables together make up the PCT Sample Preparation System (PCT SPS). The system follows the highly successful and profitable “razor and blade” business model.

The Company’s targeted market is research products and services for the life science industry. This market is comprised of academic research institutions (both private and government-sponsored), biotechnology and pharmaceutical companies, and other public and private laboratories. Currently, the Company provides PCT-based sample preparation products for genomic, proteomic, and small molecule studies.

Researchers at biological research laboratories must routinely prepare their samples prior to analysis. Sample preparation can be very challenging due to its complexity, time-consuming, and difficulties. The sample preparation market is a rather large and underserved market with tens of thousands of research laboratories worldwide needing high quality, affordable and easy-to-use sample preparation tools.

PBIO is an emerging leader in the sample preparation market with its unique and powerful PCT platform technology. The Company’s PCT technology has competitive advantages over existing technologies in the sample preparation market. As we pointed out in our previous research reports, PBIO is still in its early stage of commercialization and PCT is increasingly gaining recognition by research labs worldwide.

We have an Outperform rating for PBIO with a price target of $5 per share.

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