It's crunch time for Implant Sciences (IMSC). After months of gaining momentum on the open market with the company's Quantum Sniffer (QS) explosive trace detection (ETD) technology, the time may now be upon us to see what the US Transportation Security Administration (TSA) has to say in regards to an approval of the QS technology that would allow the technology to become a part of government purchases and contracts in order to boost America's ETD capabilities at home and abroad.
Numerous reports have indicated over the past couple of quarters that the TSA would be due in August to announce its decision. Recently-broadcast key media coverage provides an indication that the company is ramping up production in plans for a positive approval decision, all the while foreign orders have also been rolling in as the company diversifies its revenue base.
Additional clues have been provided by Implant indicating success, namely with the amount of key new hirings that have been announced over the duration of 2012 thus far. Any company planning for expansion and a move to the mainstream would be expected to grow, but what is significant about Implant's new additions are that some were convinced to move to Implant from competing companies and have long resume sheets that include big players in the sector such as GE Security (GE) and Safran's Morpho Detection. The list of new hires and advisers also have deep connections to the US Departments of State and Homeland Defense.
The validation provided investors by the new team members has helped to boost investor confidence enough to spark a general surge in the IMSC share price, which has tripled already at points this year. Because a positive decision by the TSA later this month would open the door for Implant to land immediate government contracts, namely in line with a December 3 mandate by the TSA that will require all inbound-US air cargo on passenger airlines to be screened for explosives, additional share price moves could be in store.
Given the potential sales and revenue implications that could follow the TSA approval, this event looms for Implant Sciences as significantly as a new drug approval by the FDA for a small biotech or pharmaceutical company. Unlike a small biotech, however, who would enter into a phase of partnership negotiations and product ramp-up post-approval, with the glaring need for ETD technology all around the country and globe, Implant is positioned to immediately benefit from a positive approval decision, and that fact may help to ward off the immediate share price declines seen these days after FDA approvals.
While waiting on the TSA for approval, Implant has also gained ground in other significant markets around the globe, such as providing hotel security in volatile African nations while also defending dignitaries in Colombia earlier this year at the Sixth Summit of the Americas. Additionally, a large move into the security market is China is underway, as the rebellious and protesting nature of Chinese citizens over the past months has been gaining attention. Workers over there are finally starting to fight for higher wages and better working conditions, and combine that with the inherent terrorist threat faced by other factions operating within China's mainland, Implant has found a solid customer base in that country and two recent orders by Chinese government officials for Sniffer units is evidence that governmental entities are becoming believers.
The doors could be ready to swing wide open for this small company within weeks, making IMSC a pivotal play for August.
Watch the wires.
Disclosure: Long IMSC.
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