We have all heard the story of David vs. Goliath at some point in our lives. Setting a new 52 week high today and doubling in price since the beginning of the month, the penny stock of Decision Diagnostics Corp. (DECN) looks like the comeback kid on the OTC. Taking a year to 10-bag, the company’s on-going litigation with the divisions of Johnson and Johnson, Inc. (NYSE: JNJ) had all but choked their ability to bank the revenues from their FDA approved Genstrip.
While some sources close to the situation are speculating a buyout could be a real possibility with the counter suits filed, challenging the giant’s patent claims, DECN stock may be the hidden gem among buried treasures – a true David in the corporate world.
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DECN Stock Quote
Market Cap: 10.16M
Last: 0.48 ▲ +0.18 (+60.00%)
Volume: 915,566
Dollar Volume: $381,391
Trades: 170
52 Wk High: 0.5005
52 Wk Low: 0.052
Authorized: 494,950,000
Issued and Outstanding: 21,174,151
14-Day Rel Strength: 86.07%
1st Resistance Point: 0.5487
1st Support Level: 0.3632
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According to the American Diabetes Association, some 25.8 million children and adults in the United States, 8.3% of the population, suffer from diabetes as of a January 26, 2011 released fact sheet. If Johnson & Johnson had not blocked the sale of Decision Diagnostics’ GenStrip™, the affordable alternative strip for use with OneTouch® Ultra® meters, diabetics could be saving roughly 50% on their 3-8 daily blood glucose testing measures.
Since the Affordable Care Act was implemented by the Federal Medicare and Medicaid programs in July of this year, effectively lowering payment rates for diabetic related products by almost 70%, Decision Diagnostics took a major step forward by ending their brand name distribution business and allowing their brand name products distribution arrangements to expire.
Focused solely now on building their brand for their Genstrip product, J&J has essentially stalled any revenue streams Decision Diagnostics could have been collecting on since the FDA approved their product in November, 2012. Although the phase out of their prior brands lowered revenues by roughly $12.75 million for the year ended December 31, 2012 and roughly $9.65 million fr the first 5 months of 2013, according to Company estimates, they are still optimistic enough to have deferred $2.905 million in Genstrip sales.
The company could be full steam ahead with their Genstrip product if not for the patent infringement cases filed against them in September, 2011. Although the ruling of the Company’s counter suit from April, 2013 has yet to be determined, the delayed implementation of its Genstrip retail store strategy is worth an estimated $4.8 million in additional revenues according to Decision Diagnostics.
That was all as of a month ago.
Since a 4 judge panel within the USPTO appeal structure notified Decision Diagnostics in August that they would likely prevail against J&J and have since begun rolling out Genstrip. DECN stock, as one can see from the charts, has significantly gained momentum since August.
The speculation of DECN being bought out comes from common sense for those familiar with the M&A strategy of J&J. If you consider that the diabetes testing market globally is worth around $23 billion annually, expected to grow to $30 billion by 2017, and approximately 3.4 million diabetics in the U.S. who use or have used J&J’s Ultra meters, taking out the competition by buying them, since they can’t block them anymore, seems like the only solution and a major win for DECN.
About DECN Stock
Decision Diagnostics Corp. is a nationwide prescription and non-prescription diagnostics and home testing products distributor, selling a range of diagnostic test kits and at-home testing products.
Click here to view the SEC filings for DECN.
Click here to view the website for Decision Diagnostics.
Last 5 Trading Sessions:
| Date | Open | High | Low | Last | Change | % Change | Volume |
| 09/16/13 | 0.3200 | 0.5005 | 0.3150 | 0.4800 | +0.1800 | +60.00% | 915,566 |
| 09/13/13 | 0.2700 | 0.3100 | 0.2650 | 0.3000 | +0.0300 | +11.11% | 574,800 |
| 09/12/13 | 0.2550 | 0.2700 | 0.2530 | 0.2700 | +0.0050 | +1.89% | 267,200 |
| 09/11/13 | 0.2300 | 0.2650 | 0.2200 | 0.2650 | +0.0250 | +10.42% | 956,500 |
| 09/10/13 | 0.2350 | 0.2450 | 0.2112 | 0.2400 | +0.0100 | +4.35% | 316,100 |
Bottom Line:
Today was an epic start to a great week for penny stock traders. The buzz around DECN is growing and today’s new 52 week high, speculation coming from all angles that a buyout is imminent, is all good news for longs. Even if a merger agreement isn’t met, since directors and officers as a group only owned 1,409,404 shares as of the end of 2012, a hostile takeover and gobbling up of DECN stock is a very plausible alternative.
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