February might seem like ages ago for Zomedica (ZOM -1.40%) shareholders. Just six months ago, shares of the veterinary health company were up more than 1,000% year to date. That's right -- in six weeks, Zomedica had become a 10-bagger.

The euphoria didn't last very long. The healthcare stock began to sink rapidly. Despite a few bounces along the way, Zomedica's share price is now more than 80% below its peak from earlier this year.

What happened? Here's why Zomedica stock has lost much of its luster.

A veterinarian examining a dog.

Image source: Getty Images.

Partner problems

It didn't take CEO Robert Cohen long to find a culprit for Zomedica's woes in the company's second-quarter update. Actually, Cohen pointed to two problems, both of which were related to Zomedica's partners.

He noted that there was a delay in ramping up the commercial launch of Zomedica's Truforma point-of-care diagnostics systems due in part to "the unexpected sale of our distribution partner." That distribution partner, Miller Veterinary Supply, was acquired by Patterson Companies earlier this year.

This acquisition prompted Zomedica to shift its sales strategy. In April, the company announced that it planned to expand its direct sales team and phase out the use of a third-party distributor. 

Cohen also blamed Zomedica's misfortunes on delays in the completion of its fT4 and ACTH assays for Truforma. Qorvo Biotechnologies is developing these assays. Zomedica thinks that sales for Truforma have been hurt by the delays. The company stated in its Q2 press release, "We expect that market adoption of Truforma will be challenging until our fT4 and ACTH assays are available for commercial release." 

Dismal financials

It's debatable how much Zomedica's current and former partners are responsible for the company's poor financial performance this year. However, there's no question that that performance has been dismal.

Zomedica reported sales of only $15,693 in the second quarter of 2021. In the first quarter, the company's sales totaled $14,124. That's not much progress. 

Meanwhile, the company continues to lose a lot of money. Zomedica posted a net loss of $4.7 million in Q2. That result was even worse than its loss of $4 million in the first quarter.

Zomedica does at least have a relatively solid cash position. The company reported cash and cash equivalents totaling around $276 million as of June 30, 2021.

But even that positive item comes with a negative trade-off. Zomedica's cash stockpile was boosted by its sale of over 91 million shares earlier this year. The transaction further diluted the value of existing shares, causing Zomedica stock to fall more than it otherwise would have.

Can Zomedica zoom again?

Despite Zomedica's challenges, investors haven't thrown in the towel on the stock. Zomedica still ranks among the top 50 most popular Robinhood stocks. And there are reasons to think that Zomedica just might zoom again at some point in the future. 

Cohen noted that Zomedica has implemented a new program that lets customers receive Truforma instruments if they agree to buy assay cartridges. He said that in a little under one month, the company signed 41 placement agreements and installed 25 Truforma systems with this program.

This appears to be a smart move for Zomedica until the fT4 assay is ready -- which shouldn't be too much longer. The company expects that the fT4 assay will be available this fall. The ACTH assay should be ready by year-end.

Zomedica is also exploring opportunities to expand its product lineup. Cohen said the company has looked at several potential deals that could add value for its veterinary customers.

There's no question that Zomedica remains a risky stock. However, the company's future could be brighter than its past and present.