Nanosphere (NSPH): Long Term Hold Potential


Looking for a long term hold? Check out Nanosphere (NSPH).

The prospects of Nanosphere (NSPH) look even juicier than Pizza the Hut from Spaceballs.

If you haven't heard of Nanosphere yet (and most investors have not), here is why they have great long term prospects:

Nanosphere is healthcare company which offers the "Verigene system", which is a diagnostic tool used to make diagnoses at the molecular level. NSPH recently received FDA approval for an assay for the early diagnosis of sepsis.

Sepsis is the leading cost of inpatient stay in the U.S. at over $15 billion annually, carrying a mortality rate of one in six patients.

Nanosphere is the only assay on the market that can provide broad identification of bacteria and drug resistance and a sample to result on-demand test. Recently cited publications demonstrated the benefit of reduced mortality in the intensive care unit from one in two patients to one in 10 as well as a 6.2 day reduction in length of stay saving over $21,000 per patient.

The Sepsis test addresses the clinical requirements for early diagnosis of sepsis, the number one driver of hospital costs and death.

Mastery Bottom Line:

Nanosphere is anything but a day trade. With a market cap of just $180m and Q2 2012 revenues of just $1.3 million, the company has a lot of room to grow. In Q2, before the FDA approval, they placed just 25 new Verigene systems.

If they can increase that number to 1,000 new Verigene systems a quarter over the coming years, revenues would increase to $25m a quarter. Management has plans to double the size of its sales and customer organization over the next few quarters, which should help provide the infrastructure they need to grow.