Zomedica Corp (NYSEAMERICAN: ZOM) is flying in the market this morning, and for good reason. With plans to commercialize the TRUFORMA diagnostics platform at the end of March, ZOM made a big step in the right direction today after signing a distribution agreement with Miller Veterinary Supply surrounding TRUFORMA. Here’s what’s going on:
Skip to What You Want to Read
- Zomedica Enters Into a Distribution Agreement
- Management Commentary
- Why Investors Are Excited
- What Analysts Think About ZOM Stock
- Risks to Consider Before Buying ZOM Stock
- Final Thoughts
Zomedica Enters Into a Distribution Agreement
In the press release, Zomedica said that it entered into a distribution agreement for the distribution of TRUFORMA with Miller Veterinary Supply. TRUFORMA is Zomedica’s first product, planned for sales to start on March 30, 2021.
In the release, ZOM said that Miller will be representing it in states ranging from Texas to Maine. These territories are concentrated in the eastern and mid-eastern portion of the United States.
In order to be successful in the distribution of TRUFORMA, Miller sales representatives will be joined by Zomedica sales representatives with a goal of enhancing the level of customer service and ultimately the rate of adoption relating to TRUFORMA. At the moment, Zomedica is in the process of recruiting these support representatives as part of its commercialization preparations.
In a statement, Robert Cohen, CEO at ZOM, had the following to offer:
We could not be happier about signing this distribution agreement with such a reputable and highly experienced organization. We believe that the principals of Miller share the same commitment to quality, customer service, and value that we hope to be hallmarks of the TRUFORMA™ line of products. We look forward to serving the veterinary community together as we introduce TRUFORMA into the marketplace.
The above statement was followed up by Clay Cass, EVP and COO at Miller. Here’s what he had to say:
It isn’t often that an industry-changing product like TRUFORMA™ comes along. We are honored and excited to have been chosen to help bring this technology to market. We look forward to working together with Zomedica to introduce TRUFORMA to our many valued customers and the pets in their care.
Why Investors Are Excited
Ultimately, the news released by ZOM this morning proved to be overwhelmingly positive. After all, Miller is a great partner. The company was founded in 1920 and holds the crown as the oldest wholesale veterinary distributor in the United States.
Not to mention, the company is the veterinary industry’s fastest growing business.
With the agreement, Miller will assign dedicated and educated Inside Sales Specialists and Territory Managers to the Zomedica account. This team will handle each account personally by whatever communication method is preferred by the customer. Moreover, Miller will provide TRUFORMA customers with a seamless experience from online to offline supply channels.
At the same time, the launch of TRUFORMA is overwhelmingly exciting. The diagnostics platform is protected by around 70 issued and pending patents. Using Bulk Acoustic Wave technology, the system provides one of the most accurate diagnostics options for the veterinary medicine space. At the same time, all diagnostics tests performed on the TRUFORMA platform are done in house, meaning that pet owners won’t have to wait days, or even weeks, for test results.
All in all, TRUFORMA has the potential to be a blockbuster product, driving massive amounts of revenue for ZOM and its investors. With Miller now on the company’s side with the launch, the chances of success are even greater.
What Analysts Think About ZOM Stock
According to TipRanks, there’s only one analyst currently covering Zomedica stock. However, that analyst rates ZOM a buy.
While this is exciting to some investors, it’s important to remember that analysts often have a conflict of interest with the firms they work for investing in the stocks they cover. So, it’s never good to blindly follow them, or any other expert for that matter. Nonetheless, a Buy rating is a strong point of validation for your own opinion, if your opinion on ZOM stock is a strong one.
Risks to Consider Before Buying ZOM Stock
When you invest, you face the risk of loss. That’s true no matter what you’re investing in or how much money you choose to invest. When it comes to Zomedica stock, the most significant risks to consider include:
- Volatility. ZOM stock is riddled with volatility. This volatility makes it difficult to time entrance and exit decisions. Moreover, stocks that experience high levels of volatility can experience significant declines over a short period of time, so an investment in Zomedica is one that requires a bit more maintenance than an investment in a more established company.
- Speculation. The business model at Zomedica is largely unproven. Sure, the pet diagnostics market is worth multiple billions of dollars per year. However, TRUFORMA isn’t on the market and has never been in the past. A bet on ZOM stock is a bet that TRUFORMA will experience heavy adoption and generate significant revenues. Until that actually takes place, the bet is a speculative one.
- Capital Risks. TRUFORMA is Zomedica’s first product, and it’s not on the market yet. That means that the company isn’t generating revenue through the sales of its product. So, it has been surviving on the money it has in the bank. Should this money dry up before profitability is reached, ZOM will need to raise capital, which will likely result in an offering of newly-issued common stock, leading to dilution and potentially significant declines.
All in all, Zomedica is an exciting stock to track at the moment. The company is just a couple of months from the commercialization of a diagnostics product that can easily become a cornerstone in the veterinary medicine space.
Now, with Miller on the company’s side, ZOM is on the right path to successfully commercialize TRUFORMA, generating significant revenues and a significant return of value for investors.
Sure, there are risks to consider, but there are risks associated with any investment. All in all, ZOM stock is one to watch closely as TRUFORMA gets closer and closer to takeoff!