Shares of MedMira Inc. (TSX: MIR) jumped on volume in excess of 10 million shares early Wednesday after the company announced it had at least obtained the long-awaited U.S. patent on its proprietary rapid test technology for infectious diseases. The stock at noon had appreciated $0.21, which represents an increase of over 190% over yesterday's close.

MedMira develops and produces a line of small electronic diagnostic testing devices for infectious diseases such as HIV and Hepatitis C.

Market skepticism over the devices' efficacy is slowly being replaced with confidence as regulatory bodies from G8 nations incrementally approve the devices for use within their borders. So far, this includes China, the United States, Canada and the European Union.

But does this mean investors should rush out and buy the stock?

A look at the past one year's bulletins issued by the company suggests that a lot of low-priced shares have been issued to retire debt, which means there is a large overhang in the market of some 5.2 million shares at $0.14 each.

So whereas shares are cheap at this level, the question is will the company be able to attract enough new investors on the strength of its news flow to take out the creditors holding all this cheap paper.

If the company continues to churn paper as it has been doing today, there shouldn't be a problem, and so in the long term, it's the company's balance sheet that should generate an opinion as to investment quality.

The company sold $1.3 million worth of its products for the nine months ending April 30th, 08, which is down from $1.7 million over the same period 2007. However, the loss on this years nine month period was limited to $3.5 million or 4 cents per share whereas last year they lost $4.2 million or 7 cents a share. So the company is losing less money on fewer sales, which is a good thing.

With this U.S. patent, are sales of its devices likely to increase?

Well, the competitive landscape is difficult to evaluate and crowded There are 128 companies worldwide involved in the sector, and some are household names, such as 3M (NYSE:MMM) and Abbott Laboratories (NYSE:ABT).

Watching quarterly financials and looking out for news of major sales contracts will be the best bet for determining the future of MedMira.