Shares of Zomedica (NYSEMKT:ZOM) climbed on Tuesday, following the publication of its CEO's letter to shareholders. As of 2:50 p.m. EST, the veterinary health company's stock price was up 12% after rising as much as 23% earlier in the day.
CEO Robert Cohen said Zomedica bolstered its cash reserves by over $40 million, as investors chose to exercise their warrants following its recent stock price gains. In total, Zomedica now has more than $90 million in cash on its balance sheet, which Cohen said would be enough to fund its operating costs through 2023, at which point he expects the company to be generating positive cash flow.
Additionally, Cohen confirmed that the upcoming commercial launch of Zomedica's Truforma point-of-care diagnostic platform remains on track for March 30. Cohen touted the potential for Zomedica to implement a "razor and blades" strategy for Truforma, which could allow the company to enjoy a long-term stream of profits from the sale of assays, in addition to the upfront sales of its diagnostic systems.
Zomedica's recent stock price gains were reportedly aided by a scheme in which someone paid Carole Baskin, star of the popular Netflix show Tiger King, to speak positively about Zomedica in a video posted on social media. Yet, at least for today, investors appear to be overlooking these concerns -- instead choosing to focus more on the long-term profit potential of Truforma.