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Interesting call 12 Mar 2015 21:11 #3768

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So I guess it was about 2/3 the way through the call and I was thinking to myself this is actually a interesting call. The first in YEARS it seems !
Then at the end someone from Oppenhimer came on and basically echoed my sentiments.

A few points worth mentioning, discussing or to listen for, if you haven't yet heard the call. I plan to listen again at some point.

First, the possible pricing for US scleroderma treatment...as much as 50K/year/treatment. That is significant even if it doesn't quite reach that high.

The phrase " niche opportunities". Remember my niche player comments. Now I wont pretend that what seemed to be hinted at was exactly what I was referring to but it was interesting that Cytori's near term view has changed. Treating a number of smaller indications with reasonably unmet needs may be the direct focus of the company and larger indications (here I am giving my own opinion) may be the land of partners. Nothing wrong with being a big fish in a small pond. Other comments welcome here...or anywhere for that matter.

Japan still seems to be a black hole as to what to expect.

CTX2...late 2015 or even early 2016. Again I am not surprised here and something I was speculating on as one possible reason for muted 2015 guidance.
Nice comments on the CTX2 capabilities in getting cell populations like the 800 series with as little as 25-50cc of tissue or even larger amounts from what we used to call the "half a can of coke"

Analyst actually asked some half decent questions except from Maxim (JK wasn't on the call , as if that would have mattered...LOL)

Cash issue: No mention of current cash levels. They felt confident they would solve the problem. Hints at coming partnerships in various forms but no details and given their history that was probably smart. Mention various tools in fixing the balance sheet available to them and mentioned ATM as one but didn't say if ATM has been exercised in any form. I cant believe they haven't at least tapped some given the time issue but that is my opinion. Working with Oxford as stated in the release but said the resolution may come in 2 parts. Dedicated to getting rid of the debt.

Still waiting to hear from China on approval. Have consultants working with them on it besides Lorem who has kept the pressure on to get it done as they want to get started with their own expansion plans

I am going to grade this call a solid "B"
Still one heck of a lot of work to be done. Recent PPS improvements don't change the fact we are still far below our traditional dismal pricing but there does at least seem to be a plan and that in itself is a improvement from jumping all over the map on trials and indications with never executing anything to completion.
In the meantime I will continue to hold management accountable and express critical opinions as warranted. One call doesn't change 8 years.

PS.
Listen at the end when they are asked about US clinics calling Cytori !
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Interesting call 12 Mar 2015 21:25 #3769

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thanks for the info. I'm hoping that with earnings out of the way, some positive ATHENA 6-month, 31-patient data might be forthcoming.

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Interesting call 13 Mar 2015 03:39 #3770

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Thanks Hedge.. nice summary.

I did have a chance to listen last night because of US summer saving time, which is not introduced in Europe yet.

But went straight to bed after the call. Was pleased also, especially hearing Dave Musket in the call. He is one of the very few with a clue on the science. A fundmanager from the East coast apparently who was a friend of Saad and apparently very well informed.

The last speaker paid a lot of respect to current Cytori management- will have to find out who that is. :grin:


Anyway- will listen again (or hopefully a transcript will come out from Seeking Alpha) and discuss this some further. The special pricing for Scleroderma for instance are interesting themes. :whistle:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Interesting call 13 Mar 2015 06:04 #3771

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Good call, with all the cost cutting talk by Tiago really goes to show just how wasteful and mismanaged Cytori has been and why we find ourselves so way behind where we should be. Zero mention of Okyanos again and contribution to bottom line. Something is up there that will come to light. I also noticed in video Fas posted that camera zoomed in on brand names on all equipment being used except cellution machine and Cytori. logo. Not a question from analysts on subject either and they lob softballs.. Perhaps I am just too mistrustful of management but have every reason to be. New investor's would not notice so they are I am sure thrilled with what they heard. Will listen again but, an informative positive call
but a long way to go. A decent partnership and funding news and CYTX could make a run.

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Interesting call 13 Mar 2015 07:20 #3772

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Here are two points I'd like to share. First thing, DOV called me yesterday to share something he heard that sounded very unexpected and asked me see if I could poke around about this. >The FDA will require Cytori's involvement in every batch of output produced since they are the manufacturer of the drug. WHAT??? This was not addressed directly but mentioned in a surprising comment Hederick made about no longer focusing on razor/ razor blade model. WHAT??? In other words, Cytori needs to have its hands on every autologous batch of ADRCs! WTF? I thought? What kind of business model is this? Then I heard later in the call how the new desktop version will be web connected and Cytori will have real time access to each machine. BINGO! So my theory now is that every batch of ADRCs made in the field will be monitored remotely by the drug manufacturer of the approved cell therapy, i.e Cytori. They will need to give the go ahead that the batch looks good as to quantity and quality. Kind of a bazaar model dictated by the fact that the Cytori model falls outside anything else ever done with the FDA. A locally manufactured drug. Well, this new development puts Cytori so far ahead of the SVF field that they will have a monopoly for a long time, if the FDA enforces its own rules.

Another point is they haven't used the ATM and talked about an imminent balance sheet restructuring that fixes things "once and for all". This concerns me. If they are negotiating with their lenders or with new lenders they should have tapped the ATM anyway to strengthen their negotiating position given the opportunity over the last week even if they just raise $5,000,000. They are putting all their faith in the hope that these lenders will not screw them over and the longer this goes on the smaller the corner they are getting backed into. It seems like they have a strategic investor but until the get this done, its an issue.
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Interesting call 13 Mar 2015 08:06 #3774

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Thanks WST. The key element behind the responsibility of Cytori as the manufacturer of the device celution and ultimately the therapeutic used by surgeons with patients is Quality Control.
The therapeutic should have a predictable outcome and healing impact, which can vary due to the variability of fat samples taken from the patients themselves and the resulting Celution output..
To me that should be able to be incorporated in the XCT2 itself, with the MicroRNA software of that scottish company they lined up with two years ago- Sistemic has provided. Here those data could be generated and as you say, if you have constant access to your machine, which from a technical perspective is extremely simple in this day and age, you basically have control over all processes within the device and at the customers.

Actually Hedrick and Calhoun together with some engineers filed a patent on this idea about 4-5 years ago.
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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Interesting call 13 Mar 2015 15:38 #3784

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Wow- this is more than excellent.... :happy:

Cytori already has the transcript on their webpage, which I "stole" of course and you will find attached.

For me its half-time at a soccer game which I am watching and after that I will see if I can watch some A´s game (they have a split squad tonight)- so- I will read again tomorrow. Hope you will too and we surely will get some stimulating conversation out of this... :grin: :winky:



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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Interesting call 14 Mar 2015 06:57 #3787

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Hedge , well done. Forgot

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Interesting call 14 Mar 2015 08:23 #3788

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WST

I wanted to listen again to the call before commenting on your post.
Your comment: ***So my theory now is that every batch of ADRCs made in the field will be monitored remotely by the drug manufacturer of the approved cell therapy, i.e Cytori. They will need to give the go ahead that the batch looks good as to quantity and quality.***
Since this is going to be cloud based my theory is it will be automatic and simply run with software. I doubt CYTX will have someone 24/7 just sitting around to approve harvest populations generated around the world. If you do get more info please update us.

As for the ATM, I still didn't hear where the claimed they DID NOT use it. Only that it was a tool at their disposal. I agree with you that it would have been foolish not to tap at least some funds for dealing with Oxford. Tiago has been running the CFO position quite differently so I am going to extend him some faith here that he can get the job done with Oxford. My theory would be the ATM will be helping with that.

Forgotmorthanuno...Thank you.

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Interesting call 14 Mar 2015 08:41 #3789

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If one listens Hedrick's remarks re balance sheet and financial matters, he notes the big trading volume and he makes reference to ATM. Though he does not say money is being drawn from ATM, he seems to imply money is available from ATM to burn and possibly pay down the Oxford loan. If ATM money is not drawn now, CYTX needs another source of money for the Q on top of the sales and BARDA revenue. There could be a deal coming in from Calhoun's new company to franchise the EU sales/marketing, as well as the licensing of the sport medicine indications-but, this deal, if any, is slow coming and the money may not be as big as what many people might think.

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Interesting call 14 Mar 2015 11:23 #3790

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franshei wrote: If one listens Hedrick's remarks re balance sheet and financial matters, he notes the big trading volume and he makes reference to ATM. Though he does not say money is being drawn from ATM, he seems to imply money is available from ATM to burn and possibly pay down the Oxford loan. If ATM money is not drawn now, CYTX needs another source of money for the Q on top of the sales and BARDA revenue. There could be a deal coming in from Calhoun's new company to franchise the EU sales/marketing, as well as the licensing of the sport medicine indications-but, this deal, if any, is slow coming and the money may not be as big as what many people might think.


Franshei, I heard the same thing, except he suggested that they will be cash flow positive by EOY, and he might not need the money. Of course I thought he was fishing for fishies like me to echo that (I say this because of past experiences, he might've meant it) but his point was that they will tap if need be... He is going to Asia, one never knows.

Anyway, my take....

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Interesting call 14 Mar 2015 11:23 #3791

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In hindsight- this Cytori transcript is pretty much a useless affair, since it does not reflect the spoken word and exchange between participants.

Seeking Alpha came out with a "real" transcript: CYTX Transcript at SA

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Interesting call 14 Mar 2015 13:45 #3792

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Since this is going to be cloud based my theory is it will be automatic and simply run with software. I doubt CYTX will have someone 24/7 just sitting around to approve harvest populations generated around the world. If you do get more info please update us.


Hedge, I agree with you on the possibility of that scenario and it occurred to me the day after I posted this theory. However, consider that this started with a conversation that the FDA will be requiring Cytori be responsible for each batch of ADRCs produced as opposed to the razor / razor blade model. I almost fell off my chair when I heard this because it would have ended Cytori's business and I figured there had to be some misunderstanding between DOV's contact and Hederick. At least I hoped so. In fact, I had my sell orders at the ready. When Hederick talked about an end to the razor/razor blade model without much of an explanation I really didn't have a clue about how this would work out. Not until I heard the real time communication abilities of the desktop version did I see an answer to this problem, thinking that a centralized process was still possible. Whether its a person on staff or a algorithm really doesn't matter much from a COGS perspective as long as the worse case nightmare off a physical Cytori presence at every ADRC extraction is avoided.

Regarding the ATM, I heard second hand that it had not been used so far. I don't think this is prudent even if negotiations with the lender or others are going well. Just remember that Hederick had been calling for a shareholder friendly capital infusion before shareholders took it up the A$$ as Sabby enjoyed itself at our expense. I can only hope that the debt holders, who also own warrants, see the value proposition Cytori is putting forward with Scleroderma and Osteoarthritis. There is so much good going on but until the balance sheet is cleaned up, I'm not comfortable.

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Interesting call 14 Mar 2015 14:17 #3793

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On the balance sheet something is in the works, maybe something big. These are Tiago's words.

At December 31, we had $14.6 million in cash and an outstanding debt balance of approximately $25 million. We are in need of additional cash to fund both operations and our debt obligations for the next 12 months and enable the company to meet the important near term objectives. Management is working closely with our lenders and we are pursuing both financial and strategic opportunities that we believe have the ability to fund the company to near term objectives and through targeted commercial and operational improvements in 2015 and beyond.

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Interesting call 14 Mar 2015 14:26 #3794

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I did not listen to the call again but used the transcript from SEEKING ALPHA to extract some highlights and important stuff for your info and consideration. From this summary you will realize that Hedge did a real nice job of summarizing before.. :yep:

CASH ISSUE- We have a high degree of confidence right now in our current plan to strengthen the balance sheet, including our debt obligations ( red: from the prepared statements)
Q&A- Answer on Musket request to elaborate: we have really been focusing on increasing the number of tools in our capital toolbox.
On the inflow side we want to protect our NASDAQ listing which we have done, we have had a lot of volume and some depreciation of stock price. We’re expanding our partner outreach and we’re looking very specifically at sources of capital. We have warrant set are well in the money, we have an ATM of $40 million, we have the ability to raise capital. I think we’re in very different position than we have been in the past in terms of our tool to address capital inflow issue.
And then if you look at the tools on the capital outflow side and that gets to your specific question about restructuring the debt. I will look to do something might be one step, it might be two steps to significantly push out the debt but also pay some of the debt down. We paid some of it down I think there is an opportunity to do that. The lenders have been great and I anticipate that we will be able to continue to do what we have done in the past which is to work with them to make that not an issue for us but not a significant issue.


It seems that Cytori Management is MUCH less concerned than the market and as we are. Lets hope this is justified... :really:

Future "corporate language": As we move forward, on a relative basis, expect to hear more from us, from the management team, from the company about the specific therapeutic or drug, and it's clinical claims, it's benefits and the pharmacoeconomic outcomes and less about the device, the consumables, the enzymes and the cells.


So- maybe a change from- we want a Celution in every clinic of the world, to going to several Celutions in specialized clinics for the disorders the technology serves. To me the above makes sense from a "price tag differentiation" perspective i.e. the 50k$ cost per treatment for scleroderma, but NOT as what we see happening in the field- Okyanos treats multiple disorders all with the same equipment and does not differentiate at all. :winky: But does use competing equipment for specific disorders i.e. OA with LipoGems.

ATHENA- we plan to have the raw data this quarter and after complete analysis of the data, make a decision as to the proper venue for presentation and it's publication.


From this- no ATHENA data this weekend at ACC. Mind you- Hedrick is excellent with laying smoke-screens, he was part of top management for the past 13 years.... :grin:

Partnerdeals- we intend to target new business relationships in the following 3 broad categories, broad strategic partnerships with med tech or pharma, limited commercial partnerships that could result in some meaningful commercial revenue at favorable margins for the company or access to expanded networks of patients also resulting in increased revenue. And then finally potential partnering around new technologies that could be synergistic or value add with our current technology. In terms of how we think about the economics in these areas, we’re looking specifically on one hand for balance sheet impact in terms of upfronts fees and milestones, and perhaps shorter term commercial impact in terms of opening orders and system sales. But we’re also looking for longer growth opportunities that will more greatly impact the P&L over time.


No further comment... we had this before too... :whistle:

But it became clear to us over the last year or two that while there wasn’t a specific orphan drug pathway in the U.S. it's available to a device that manufactures the cell therapy in the OR, the FDA would effectively if the data was right, the indication was right and we can make that rare disease argument that the FDA would be permissive to green light us through to pivotal Phase III and that’s indeed what happened. So I think it really sets up a nice precedence for us to pursue similar indications in the same way.


Surely one can build on a certain positive experience and repeat that process (even faster) on equivalent disorders. :winky:
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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Interesting call 16 Mar 2015 19:07 #3815

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I did get a clarification today on the issue of Cytori having some kind of presence at the point of ADRC batch creation. This is directly related to scleroderma and reimbursement, NOT the FDA. Assuming FDA approval, by having a physical presence at every batch creation, Cytori is able to obtain premium pricing. Since the number of centers that treat scleroderma is limited in the USA it will involve about 30 professionals or so. Although it seems kind of odd, this is more of a pricing strategy than an FDA requirement which is a relief when you consider other indications that are not treated in a limited number of clinics such as osteoarthritis.
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Interesting call 16 Mar 2015 19:33 #3816

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Wow...so I guess now is what do they mean by professionals ? Doctor, Lab Tech, other ?
I believe there are 34 clinics in the USA for scleroderma.

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Interesting call 16 Mar 2015 21:42 #3818

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Doesn't matter much I suppose. Could be a outside contractor under Cytori's control. This setup will maximize gross profit. All good stuff.

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