Skyline Medical Inc (NASDAQ:SKLN)
Skyline Medical Inc (NASDAQ:SKLN) stock price dropped 7.93% after announcing plans to merge with CytoBioscience. The two companies have signed a binding letter of intent, subject to entering into a definitive merger agreement. Tuesday’s sell-off added to a downtrend that threatens to push the stock to all-time lows. Over the past four weeks, the stock had been on an impressive run.
Skyline Medical Inc (NASDAQ:SKLN) is a medical device company. The STREAMWAY System is the company’s lead product for the collection and disposal of infectious fluids generated from surgical procedures and postoperative care. The company sells the automated system to hospitals, surgical centers and other medical facilities.
CytoBioscience, which the company plans to merge with, develops devices used in human cell research. The firm boasts of strategic collaborative partnerships with leading pharmaceutical companies in addition to technical staff. The company has a backlog of $6 million in orders and anticipated contract research work.
The binding letter of intent signed between the two companies calls for an initial planning session. Leaders of the two groups are to meet to lay out the combined company’s business operation and strategy.
“This is a great opportunity for both companies. The CytoBioscience group has a deep pipeline of projects and contracts underway and, assuming we complete the transaction, we look forward to using their forward motion as a springboard for our combined company to gain further traction in the marketplace,” said Carl Schwartz, Skyline Medical CEO
STREAMWAY System Synergies
A merger with CytoBioscience would be of great benefit for Skyline Medical Inc (NASDAQ:SKLN) given that the company’s board and management boast of extensive relationship with hospitals and various government entities. The company should be able to leverage this opportunities to open up new markets for the STREAMWAY System and other room safety products.
Skyline Medical Inc (NASDAQ:SKLN) has carried out a number of initiatives as it seeks to accelerate sales for its flagship product. The company is fresh from receiving a CE Mark for the STREAMWAY System that paves way for it to market the product in 32 European countries.
Skyline Medical Inc (NASDAQ:SKLN) is planning to focus on markets it can penetrate with ease for the initial launch. Plans are also underway to assemble a proper distribution network for the European roll out which should be complete by early next year.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation