What happened
Shares of Prenetics Global Limited (PRE 4.81%) were skyrocketing 27.8% higher as of 11:12 a.m. ET on Tuesday.
The huge gain came after the company announced that the U.S. Food and Drug Administration (FDA) cleared ACT Genomics' ACTOnco comprehensive genomic profiling test for solid tumors. Prenetics acquired a majority stake in ACT Genomics in December 2022. ACT Genomics, which is headquartered in Hong Kong, specializes in precision oncology tests.
So what
Prenetics needed some good news. The genetic testing stock was down 76% below its peak prior to today's announcement of FDA clearance for ACTOnco.
This clearance paves the way for ACT Genomics to compete in the potentially lucrative U.S. precision oncology market. It also enhances ACT's reputation in Asian markets. ACT Genomics is the first (and so far, only) Asian-based company to win FDA clearance for a comprehensive genomic profiling test.
But perhaps the most important benefit over the short term for Prenetics is that it could attract more investors. The company is still flying under the radar in many respects. The FDA clearance has the potential to put Prenetics more in the spotlight.
Now what
Securing FDA clearance is an important milestone. However, it doesn't assure Prenetics and ACT Genomics of success. Now comes the hard task of marketing ACTOnco in the U.S.
Prenetics appears to be in a pretty good financial position to get the ball rolling. The company ended the third quarter of 2022 with a cash stockpile of close to $250 million. It also has access to up to $50 million from HSBC Bank.