Valuation of the latest press release of CYTX:
There have been some difficulties in the german discussion boards concerning understanding the meaning of some statements in the recent pr of the Cytori-Oylmpus Collaboration.
don´t know if this is only caused by the weak English skills of some board members there or if pr is not written in a simple enough diction. Poor market reaction till now as nobody except the hardcore group seems to follow this stock or market observers do understand the implications of the deal! I personally would have prefered an official statement by an Olympis executive to be included in that pr. Why haven´t they done media distribution via Olympus , too. That would have strengthend market awareness?!
Here are the conclusions that I draw from the pr:
Generally:
-Cytori has succesfully overcome regulatory hurdles in Europe to offer their stem cell products there to clinics and health care businesses after having received CE-mark for their Celution system. Now the next stage of the Company´s developement starts. They will collaborate with business partners from Device-, Medical-, Pharma-, and Biobranch to do clinical studies in order to proove efficancy of their stem cell products. The Big Boys like Baxter, Amgen, Medtronic, Biomet, Guidant, GE Healthcare, Johnson etc. will do due dilligence of the Celution system and finally recognize the superiority in terms of costs, time, convenience, regulatory approval, administrative handling and scalability of the system.
-Cytori will have the chance to compare different offers for different indications and choose the partner for a specific indication who offers the financially most attrative, most reasonable marketing plan and a strong market position to bring the jointly developed product to financial success.
-This will lead to additional collaborations during the 6-24 months. Each indication targeted will be commercialized with a specific business partner.
-This collaboration deals will most likely structured with a two-digit million upfront payment by the business partner and Cytori participating on future product sales via royalty payments.
Special implications of the Olympus collaboration:
-CYTX gets 1,5 million for granting Olympus an exclusive right to negotiate a therapeutic deal for a specific indication
-Although this indication is not described in detail you only have to google a little bit on the net or reread some postings here to get a suggestion about a possible indication...
(http://www.biomaterial.co.jp/en/medical/)
->the payment of 1,5 millionen dollar to only obtain exclusive negotiation rights (means no competitor from health care or pharma/bio industry is allowed to negotiate with cytx a possible collaboration for the specific indication) indicates that Olympus is very keen on being the first mover in this field and acknoledges its future revenue and profit potential, schumpeter revisited.
->the negotiation-phase will most likely last for the next 12 to 18 months - as the clinical studies do. Both (Cytori and Olympus) will use this time frame to collect clinical data, estimate market potential, discuss manufacturing, selling and servicing strategies for the products to launch and last but not least to formulate a contract that entails all this details beside the exact economical terms.
->I personally estimate that based on the 1.5 million prepayment for negotiation rights, the final deal will be worth a high two-digit million sum in prepayments from Olympus to Cytori to collaborate in this field. Additional cytx should participate on the Olympus sales of these therapeutic therapies via royalty payments.
-> And the best: We are still talking about one potential partnership in a specific indication. Celution offers great scalability which enables Cytori to close further deals in areas like spine, cosmetic surgery, revascularization, alzheimer, diabetes, drug developements....
Valuation:
->so in my point of view the company is extremely undervalued with a current market cap of 100 million $
->look to all the competitors like stem, astm, gern etc. who are valued the double or more without ever having been able to close a commercial partnership like this or being 8-9 years away of commercialization.
-Geron yesterday added almost 100 Million $ to their market cap because of stating that they proved differentiation and homing of embryonic stem cells as heart muscles in animal studies.
(Geron: Tests show human stem cells prevent rat heart failure
Wednesday February 22, 3:07 pm ET
"The studies reported today are the first to demonstrate survival of [human embryonic stem cell-derived] heart muscle cells in the infarcted myocardium that significantly improved cardiac function. These results are in contrast to studies by others using adult bone marrow-derived hematopoietic or skeletal myoblast stem cells which do not produce new cardiac muscle tissue after injection into infarcted hearts.")
->Cytori has prooved the ability of adult adipose stem cells that do not have to undergo the IND process and are free of any ethical controversy to do the same a long time before (http://ir.cytoritx.com/ReleaseDetail.cfm?ReleaseID=169104)
->what we need now to attract mr. markets attention and increase common visibility is a buy/research-report by a big, well respected investment adress like jpmorgen, ubs or someone from the biotech investment scene like rodman&renshaw that can help to carry the companies vision and strategy into the investment world.
Someone reading this thread? Feedback appreciated!!!
just my two cents
gulliver |
