One of my stock assignments for this week was PROG stock. That’s the symbol for San Diego-based biotech Progenity (NASDAQ:PROG). 

For a moment there, I got excited when I saw the stock on my coverage list. I love Progressive Insurance (NYSE:PGR). In November 2018, I put the property and casualty insurer on my list of 7 Women-Led Companies Delivering Outsized Returns. Its CEO Tricia Griffith is top-notch. PGR stock is up 77% since then. 

Alas, I’ve been tasked with covering the biotech company specializing in molecular testing products such as Preecludia, a test that rules out preeclampsia, a pregnancy-related blood pressure condition. It also specializes in gastrointestinal drugs and oral biotherapies. 

While that all sounds important, investors don’t yet seem convinced, as the short percentage of float stands at nearly 23%. And I can see why. 

Progenity Seeing a Sharp Drop in Revenue

Progenity reported third-quarter results on Wednesday after the close. Given, PROG stock is down more than 15% since the announcement, it’s safe to say Wall Street wasn’t overly impressed. 

The company reported a quarterly loss of $43.7 million, or $0.38 per adjusted share. This was better than analysts expected and much smaller than the $0.71 per-share loss from the year-ago quarter. Revenue, however, came in at a mere $180,000.

Recent quarters have not been much better. The company announced its second-quarter results on Aug. 12, reporting $463,000 in revenue and a $78.5 million quarterly loss. If you exclude its discontinued operations, Progenity’s loss was $41.4 million, 137% higher than in Q1 2021, when it saw a $17.5 million loss from continuing operations. 

Biotech companies reporting losses are not uncommon. And the company did manage to post $24.5 million in revenue in the first quarter and $14.3 million in the fourth quarter of 2020. But, if you’re like me, you’re wondering what happened in 2021 to shrink sales so drastically.

Well, as its Q2 2021 10-Q states, Progenity underwent a strategic transformation in June that closed its genetics lab in Ann Arbor, Mich., that generated the lion’s share of its revenue through its lab’s testing services. Instead, the company will now focus on research and development.      

Progenity Gets a New CEO

Earlier this week, Progenity announced Adi Mohanty will take over as CEO, replacing interim CEO and CFO Eric d’Esparbes. 

“Adi Mohanty is an experienced biotech business leader with a track record of several successful product development and approvals followed by rapid commercialization,” stated the company’s press release.

He’s just the kind of person you want in charge of extracting whatever value lies within its four walls. God knows it wasn’t the company’s Ann Arbor lab, or it would still be a part of the business. 

As The Motley Fool’s Jim Halley pointed out in October, the company believes Preecludia can turn out to be a test that generates $3 billion in annual revenue. It is Mohanty’s job to make that happen. I’m sure the biotech veteran is getting plenty of stock options and grants to make it worth his while. 

I get why the new CEO might be excited. Unfortunately, I see little that suggests any of this excitement will bear fruit any time soon.

The Bottom Line on PROG Stock

Only a meme stock could garner this kind of investor interest and be valued at nearly $450 million with no chance of getting back to its 2020 revenue levels anytime soon. 

As my InvestorPlace colleague Alex Sirois recently stated, there are plenty of biotechs out there that do precisely the same thing that Progenity does — lose money and string investors along — but for less. 

If you’re thinking about investing in PROG stock, don’t. It’s that simple. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.