Redwire (RDW 4.42%), a company that specializes in space exploration equipment, saw its stock soar toward the planets on Monday. That was on the back of an announcement that it would be forming a new corporate entity to take advantage of a promising business segment. Investors liked what they heard about the latest venture, and rewarded the stock by sending it almost 7% higher that day.
That rate was well higher than the far more earthbound S&P 500 index, which ticked up by 1.4% as Redwire lifted off.
Space medicine
In a press release, Redwire formally announced the creation of that entity, called SpaceMD. As the name implies, the unit will focus on opportunities for developing pharmaceutical products in space.
Image source: Getty Images.
Specifically, SpaceMD's focus will be on the growth of seed crystals in orbit. Once grown, these will be transported to Earth in order to aid in the development of investigational medical treatments. The crystals will be developed using the company's proprietary pharmaceutical in-space laboratory (PIL-BOX) technology.
According to Redwire, 28 PIL-BOX systems have already been deployed in space, and collectively they have crystallized 17 compounds, including insulin.
The company added that it aims to sell or license the seed crystals it grows. It did not provide any estimates for how much it stands to earn from this activity.
Crystal clear?
It almost goes without saying that monetizing crystal seeds developed in space is hardly a proven business strategy. But that doesn't matter as much as Redwire's very imaginative attempt to develop a new revenue stream, and for an industry (pharmaceuticals) that is competitive and always hungry to formulate and test new medications. The positive investor reaction to the news was justifiable.
