Dennis Purcell’s Aisling Capital trimmed its position in Roka Bioscience Inc. (NASDAQ:ROKA) by 246,049 shares in July. The hedge fund disclosed holding 876,368 shares, which represent 4.9% of the company’s outstanding common stock, through a recently-amended 13G filing with the Securities and Exchange Commission. Aisling Capital held 1.12 million shares as of March 31 according to its most recent 13F filing.
Aisling Capital is a New York-based healthcare-focused hedge fund founded by Dennis Purcell. Aisling Capital, one of the top venture capital firms in the life sciences industry, has roughly $1.7 billion of assets under management and has invested in more than 75 companies since its inception in 2000. Dennis Purcell acted as the Senior Managing Director of the firm from February 2000 to December 2014, and currently serves as the Senior Advisor to Aisling Capital. Purcell is seen as a leader in the healthcare and life sciences field, being listed on Forbes’ all-stars in the biotechnology industry. Throughout his career, Purcell has served on the Board of Directors of multiple public and private companies that operate in the healthcare industry, so he has a notable career in healthcare finance and investing. According to its most recent 13F filing with the SEC, Purcell’s Aisling Capital manages a public equity portfolio worth $764.16 million, with 93% of its entire portfolio invested in the healthcare sector.
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Roka Bioscience Inc. (NASDAQ:ROKA) is a molecular diagnostics company focused on providing advanced testing solutions for the food safety testing market. The shares of Roka Bioscience have dropped by nearly 22% since the beginning of the current year and by over 71% since the company had its initial public offering in July of 2014. Roka Bioscience has been among the worst IPO performers of 2014 and we’ll attempt to tell you why the stock plummeted so as to get a clear picture of the company’s future outlook.
Roka Bioscience is mainly focused on designing, developing and providing testing solutions to contract testing laboratories, food processors, and other participants in the food safety testing market. The company’s main products are the Atlas System and Detection Assays, which have been designed to provide accurate and rapid test results with reduced labor costs and improved laboratory efficiency. Atlas is set to look for three main pathogens that include Listeria, E. coli, and Salmonella, all of which are behind the majority of food recalls in the United States. However, Roka Bioscience faced a major problem with its Listeria test at the end of 2014, and a few labs couldn’t function by using the existing test. So the shares of Roka plummeted as the company switched from a single product company to a zero product company. Nevertheless, the company managed to solve the majority of issues with its Listeria test, and as a result the commercial utilization of the Atlas instruments increased. On July 14, Roka Bioscience Inc. (NASDAQ:ROKA) announced that its Atlas Listeria Environmental Detection Assay (Atlas LE Assay) has received AOAC Performance Tested Methods certification from the AOAC Research Institute. The assay is approved for the detection of Listeria spp. on environmental surfaces. Indeed, many of us don’t entirely comprehend the extent to which the company benefits from this certification, but it is quite clear that the company is moving in the right direction.
We’ll now go through Roka’s recent financial results in order to understand whether the company’s revamped Atlas has been successful or not. Roka Bioscience reported revenue of $1.5 million for the first quarter of 2015 that ended March 31, compared to revenue of $828,000 reported in the same quarter a year ago. The company also indicated that the increase in the year-over-year revenue resulted thanks to the increase in the number of Atlas instruments placed with commercial customers. Roka had 41 instruments placed with customers as of March 31, compared to 32 instruments reported a year ago. Even though the company has limited capital resources, has experienced negative cash flows from operations, and has incurred net losses since inception, Roka Bioscience’s management believes that the company’s cash, cash equivalents, and marketable securities will be enough to fund their projected operation requirements by the middle of 2016. The company has been investing heavily in commercializing its products and developing its products, which is why the company has experienced and expects to experience negative cash flows from operations and net losses.
However, it seems that Dennis Purcell, one of the leaders in the healthcare and life sciences field, might have sold out a part of his stake in Roka Bioscience too early, as the stock achieved an increase of over 23% since Aisling Capital went through with the transactions on July 10. The latest news on the company suggests that the company is indeed on the right track and will achieve its much needed turnaround, even if Dennis Purcell has trimmed his position. Samuel Isaly’s Orbimed Advisors is among the largest shareholders in Roka Bioscience Inc. (NASDAQ:ROKA), owning 3.22 million shares.
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