Shares of TrovaGene Inc. TROV plunged 46.2% after the company’s board dismissed its Chief Executive Officer (CEO) Antonius Schuh and Chief Financial Officer (CFO) Stephen Zaniboni for negligence of duty.
TrovaGene also filed a lawsuit against the duo in the Superior Court of the State of California for the County of San Diego, alleging that the officials “failed to present a lucrative corporate opportunity to Trovagene concerning promising new therapeutics in the field of precision medicine and instead took that opportunity for their own personal benefit.”
TrovaGene’s Chairman Dr. Thomas Adams will act as the interim-CEO with immediate effect. However, the company has not named anyone for the position of CFO.
Although we believe that the board acted prudently, the sudden dismissal will certainly impact the company’s share price, at least in the near term.
Nevertheless, the multiple benefits of TrovaGene’s Precision Cancer Monitoring (PCM) platform is expected to drive adoption which will somewhat offset the negative development. Notably, the non-invasive, cell-free technology is cost efficient and can be performed in patients not fit for a tissue biopsy.
Hence, the technology can be ancillary to the current standard of tissue biopsy. We believe that there is significant market opportunity for TrovaGene as an important player in urine-based liquid biopsy platforms.
Meanwhile, TrovaGene is focusing on gaining market share at the non-small cell lung cancer treatment segment by prioritizing its commercial efforts. The company expects to present and publish additional clinical data for the non-small cell lung cancer application at major oncology meetings and in peer-reviewed publications this year.
TrovaGene also plans to release clinical data and promote the broader capabilities of its platform with KRAF and BRAF mutation essays in diseases such as pancreatic cancer, colorectal cancer melanoma and histolytic disease.
Moreover, recent agreements with Fortified Provider Network, Multiplan, FedMed and America's Choice Provider Network will help TrovaGene gain better market traction as well as drive top-line growth.
Zacks Rank and Key Picks
Currently, TrovaGene has a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector are Abiomed ABMD, Luminex LMNX and Edwards Lifesciences EW. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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