STONY BROOK, NY - Applied DNA Sciences, Inc. (NASDAQ:APDN), a company specializing in PCR-based DNA manufacturing and detection technologies, announced today that the U.S. Defense Logistics Agency (DLA) has exercised a one-year option to extend a contract originally signed in May 2021.
This extension is part of a three-year base contract with two additional one-year options, supporting the DLA’s efforts to mitigate counterfeit activities and verify products within the Federal Supply Class (FSC) 5962 microcircuits.
The contract, which could reach a maximum value of $1.04 million, is set to continue Applied DNA’s role in aiding the DLA’s counterfeit mitigation program, a collaboration that has been in place since 2014. Through this partnership, Applied DNA provides a forensic DNA mark used as a secure taggant to trace the origin and ensure the authenticity of microcircuits used in national defense.
Judy Murrah, chief operating officer of Applied DNA, expressed the company’s commitment to maintaining the continuity of the DLA’s program and the enhancement of the nation’s defense capabilities through their advanced DNA marking technology.
Applied DNA Sciences operates in several business markets, including the production of nucleic acid-based therapeutics, molecular diagnostics, and industrial supply chain security services. The company has recently expanded its capabilities through the acquisition of Spindle Biotech, Inc., which specializes in the development and sale of proprietary RNA polymerase for mRNA therapeutics production.
The continuation of the contract with the DLA underscores the ongoing demand for Applied DNA’s supply chain traceability services within the U.S. defense sector. The company's SEC filings indicate a history of net losses and limited financial resources, yet the extension of this contract may play a role in its future performance.
The factual details presented are based on a press release statement from Applied DNA Sciences, Inc.
In other recent news, Applied DNA Sciences has been involved in several key developments. The company announced a significant reduction in manufacturing costs for a key component in mRNA production, in a collaboration with Alphazyme LLC. This has led to a cost reduction exceeding 70%, which is expected to boost the profitability of Applied DNA's Linea IVT platform.
Simultaneously, the company has received a patent for its Linea RNAP enzyme composition from the U.S. Patent and Trademark Office, which extends the patent's life until 2041. This strengthens Applied DNA's position in the mRNA production sector.
The New York State Department of Health has approved Applied DNA's pharmacogenomic testing service, TR8, opening the door for broader healthcare application in New York. On the financial side, the company disclosed a public offering expected to generate approximately $12 million in gross proceeds, which will be used to expand its Therapeutic DNA Production Services and MDx Testing Services.
However, H.C. Wainwright has lowered its price target for Applied DNA Sciences shares to $1.50 from the previous $7.00, while maintaining a Buy rating. The company also confirmed a 1-for-20 reverse stock split of its common stock, aimed at ensuring compliance with the Nasdaq's minimum bid price requirement.
Furthermore, Applied DNA Sciences has received a notification from The Nasdaq Stock Market LLC indicating non-compliance with the exchange's minimum bid price requirement. The company has until January 8, 2025, to regain compliance, which it plans to achieve through a reverse stock split. These are all recent developments in the company's operations.
InvestingPro Insights
As Applied DNA Sciences, Inc. (APDN) secures a contract extension with the U.S. Defense Logistics Agency, investors may be keen to understand the financial health and market sentiment surrounding the company. According to InvestingPro data, APDN currently has a market capitalization of approximately $4.33 million, reflecting the size of the company in the broader market landscape.
This relatively small market cap suggests that the company may be more susceptible to market volatility, which is consistent with the high price volatility noted in one of the InvestingPro Tips. The company's revenue over the last twelve months as of Q2 2024 stands at $5.52 million, with a significant decline of 68.52%, indicating challenges in maintaining sales growth.
InvestingPro Tips for APDN reveal a complex picture. On the positive side, the company holds more cash than debt on its balance sheet, which could be a stabilizing factor for its financials. However, the company is also quickly burning through its cash reserves, and analysts do not anticipate profitability this year.
With no dividends being paid to shareholders and a poor free cash flow yield implied by its valuation, investors should be aware of the potential risks. With a price that has fallen significantly over various time frames, including the last year and the last three months, market sentiment appears to be bearish.
For those interested in a deeper dive into APDN's financials and market performance, InvestingPro offers a wealth of additional tips. There are 13 more InvestingPro Tips available, which could provide a more nuanced view of the company's prospects. To explore these insights, investors can visit InvestingPro. Moreover, users can take advantage of a special offer using coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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