Cesca Therapeutics (KOOL) Stock Rallies On Regulatory Approval

Cesca Therapeutics KOOL Stock News

Health Canada, the Canadian regulatory authority on medication and medical devices, has approved a product by Cesca Therapeutics Inc (NASDAQ: KOOL), leading to strong gains. So far this morning, the stock is up more than 6% and could go higher. Here’s what’s happening:

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KOOL Stock Gains On Regulatory Approval

In a press release offered up in the wee hours of the morning, Cesca Therapeutics made a key announcement. The company said that its wholly owned subsidiary, ThermoGenesis, has achieved regulatory approval from Health Canada.

The approval was provided for the company’s next-generation AXP®II, a system designed for cord blood processing. KOOL said that when used with a single-use, cell separation set, the AXP®II system provides automated, rapid and reproducible harvesting of stem and progenitor cells from collected units of umbilical cord blood. The separation takes place in what is dubbed as a “functionally-closed” sterile system.

This is not the only approval that ThermoGenesis has seen surrounding AXP®II. In fact, back in November of 2018, the technology received 510(k) market clearance from the FDA.

Since the market clearance, the product has been used by premier public and private cord blood banks around the world. The system gprovides upgraded functionality, user interface and capability with newer operating system. It also includes an improved docking system and XpressTRAK® software that allows it to maintain compliance with Current Good Manufacturing Practice and Current Good Tissue Practice regulations.

In a statement, Haihong Zhu, President of the KOOL subsidiary, ThermoGenesis, had the following to offer:

Health Canada’s approval of the AXP® II — following its approval of the PXP® System earlier this year — marks the achievement of yet another key milestone and should allow us to meaningfully expand our footprint with a best-in-class system that, today, continues to hold a market-leading position.

That said, we look forward to building on our customer base by offering Cord Blood Banks throughout Canada with the ability to undertake cord blood processing with a system that generates mononuclear cell (MNC) recoveries of >90% and CD34+ stem and progenitor cell recoveries of > 95%.

More Information On The AXP® II System

AXP® II is a propriatery system that automates the separation, processing and storage of hematopoietic stem cell concentrates from cord blood. The system automates the volume reduction process while providing consistent buffy coat concentration volumes.

Moreover, the system provides high recoveries of mononuclear cells in a targeted volume and allows for the simultaneous processing of multiple blood cord units in one centrifuge. The full system includes the AXP II Device, AXP II Docking Station, AXP Processing Bag Set, XpressTRAK software and all required accessories.

Why Investors Are So Excited

At the end of the day, to commercialize a medical device in a developed nation like Canada, biotechnology companies must first receive regulatory approval. That means that until today’s announcement, ThermoGenesis and its parent company, KOOL, were not able to generate revenue from sales of the AXP® II system in Canada.

Nonetheless, with the approval from Health Canada, the audience for the AXP® II system has greatly increased. As such, sales in Canada have the potential to yield a significant increase in revenue, leading to all of the excitement that we’re seeing today.

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What Do You Think?

Do you think that today’s approval will significantly impact revenue? Where do you think KOOL stock is headed moving forward? Share your opinion in the comments below!

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