Why the Universal Biosensors (ASX:UBI) share price is shooting 36% higher today

The Universal Biosensors(ASX: UBI) share price is rocketing today after the company made two important announcements to the ASX.

| More on:
Medical staff wear hero capes, indicting strong shar [price performace for healthcare shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Universal Biosensors, Inc. (ASX: UBI) share price is rocketing today, up 36%. The positive price movement after two company announcements: an agreement for cancer detection technology and an exclusive supply agreement.

At the time of writing, shares in the medical diagnostics company are trading at 65 cents each, after shooting up to a 52-week high of 85 cents near the open. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is 0.28% lower.

Let's take a closer look at today's announcements and how they might affect the Universal Biosensors share price.

Cancer detection technology

In its first statement to the ASX, the company declared it "has entered into an exclusive licence and supply agreement with Lubris BioPharma LLC…" to commercialise a biosensor test that can detect and monitor cancer.

Universal said the Tn biosensor was jointly developed by Deakin University, Swinburne University of Technology and The University of Wollongong using technology supplied by Lubris.

The agreement between Universal Biosensors and Lubris will be global, exclusive, and perpetual, and covers all intellectual property rights, commercialisation, development and manufacturing rights.

Universal Biosensors will own all new intellectual property. The biosensor has already been clinically tested on 1,000 patients.

Speaking on this announcement, Universal Biosensors CEO John Sharman said:

To be able to identify and measure, then monitor the rate of a healthy human cell becoming a cancer cell from a handheld point-of-care biosensor device is an exciting prospect for UBI.

…the blood testing market for the monitoring of cancer remission patients annually is estimated at $17 billion. It would be wonderful if this initiative could improve the lives of many of the 131 million cancer remission patients around the world.

He added:

The next step to develop a commercial product is to ensure the Tn biosensor can be reproduced on our manufacturing line and measured reliably using patients' whole blood. Based on our initial feasibility we estimate this could take 3 years and cost between $5 – $7 million. UBI has $25 million of cash reserves and no debt.

Exclusive supply agreement

In its second statement that is shooting up the Universal Biosensors share price today, the company updated an exclusive, global supply agreement with Lubris.

Lubris will supply Universal Biosensors with an antifouling coating called Lubricin that, when applied to an electrochemical biosensor, can improve its detection power by 1 million times more. It can be used in many applications, including human health, veterinary science, wine testing, and environmental research.

According to Universal Biosensors, the supply agreement does not contain any specific minimum purchase requirements. However, if Universal Biosensors is unsuccessful in commercialising its product, the agreement will become non-exclusive.

Speaking on the supply agreement, Mr Sharman said:

The agreement for the supply of Lubricin for use on UBI's electrochemical biosensor platform is a generational advancement for UBI's technology.

Our strategy is to partner with companies that have developed biosensors in large markets which can be used on our hand-held platform technology. Our ambition is to develop a stable of revenue generating biosensor products capable of detecting analytes of interest in key industries,

Universal Biosensors share price snapshot

Including today massive increase, the Universal Biosensors share price has gained 261% over the past 12 months and is up 37% year-to-date. 

Universal Biosensors has a market capitalisation of $122.9 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares finished the trading week on a high this Friday.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

Broker looking at the share price.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ARB, Block, Mayne Pharma, and Paladin Energy shares are charging higher today

These shares are having a strong finish to the week. But why?

Read more »

A woman puts her hands up as she smashes and breaks through a glass ceiling.
Share Gainers

How these 5 ASX 200 stocks are smashing the benchmark this week

These fives ASX 200 stocks have made some very happy shareholders this week. Here’s how.

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A smiling woman at a hardware shop selects paint colours from a wall display.
Broker Notes

After its strategy day, what does Macquarie think Wesfarmers shares are worth?

Let's see what the broker is saying about this blue chip.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Technology Shares

After surging 13% yesterday, are TechnologyOne shares a buy, hold or sell according to Macquarie?

Valuations matter when investing, and Macquarie feels no different.

Read more »