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TOPIC: Presentation May 24th at B.Riley

Presentation May 24th at B.Riley 16 May 2017 08:01 #9335

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You are highly encouraged to ask pertinent Accounting Questions again...:whistle:

SAN DIEGO, May 16, 2017 (GLOBE NEWSWIRE) -- Cytori Therapeutics, Inc. (NASDAQ:CYTX) announced today that it will present at the 18th Annual B. Riley & Co. Institutional Investor Conference at 09:00 AM Pacific Time (12 PM Eastern Time) on Wednesday, May 24, 2017. The presentation will take place in the Arcadia D room at the Lowes Santa Monica Beach Hotel, in Santa Monica, CA. Dr. Marc Hedrick, CEO and President of Cytori Therapeutics, will provide an update on current corporate activities and recent developments.
Cytori management will be available for one-on-one meetings at the conference. Attending investors who are interested in meeting management are encouraged to contact their B. Riley representative or Cytori (This email address is being protected from spambots. You need JavaScript enabled to view it.).
A live audio and video webcast of the presentation will be available under the investor relations section of Cytori’s website at www.cytori.com ( ir.cytori.com ). A replay of the presentation will be available for 30 days following the event. Please connect to Cytori’s website several minutes prior to the start of the webcast to ensure adequate time for any software download that may be necessary.

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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:

Presentation May 24th at B.Riley 16 May 2017 10:31 #9336

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FAS

A question was raised regarding the PPS and NASDAQ delisting issue. I think Hedrick might have caught in surprise and tried to gather himself in response to this ambush.

Rodney Strong, now known as Yahoo Reader on YM, is also raising his "slight" concern.

Hedrick seems to rely on the STAR data readout for a major reversal of the current situation. Obviously, nonbelievers, including at least prominent one here, may have other agenda in mind.

I personally think Tiago Girao and his colleagues are not feeling the urgency of the matter on hand, as the STAR data readout is considered "years away" in the Wall Street clock. I think they are trying to do something, including this Riley presentation. I think last year, it was a good presentation leading to a PPS uptake.

Obviously, this Riley show is intended for local investors in Southern CAL - maybe many are Chinese and Latin Americans (D'Silva and Girao are likely Latin Americans and Girao seems to have have good connections in Southern CAL). Hope things will do well there.

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Presentation May 24th at B.Riley 17 May 2017 07:13 #9339

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I haven't seen this posted here, but a few days before the CC, B Riley reduced their price target from $6.75 to $2.75 saying that management needed to re-establish credibility on the street. I believe he also reduced his revenue numbers for 2019 and 2020. In other words, D'Silva has been embarrassed by the 50% haircut the stock has taken since he recommended it and correctly blames management. The timing of this declaration of no confidence was interesting to me.

In my opinion, the conference call was one of the better ones, but still came up short. We are roughly 10 weeks away from Phase III data and there is absolutely no speculative buying foretelling positive data. If the stock can trade 17 million shares out of 24 million outstanding on expected news from the FDA, I wonder what will happen when statistically significant data is announced guaranteeing FDA approval. Now there is about 34 million shares outstanding so the stock should trade 25 million shares??

Hedrick was very clear that the trial was sufficiently powered. There are no excuses. The data release is a binary event - success or bankruptcy. They were very clear about being prepared for success and no one believes them or in them.

I continue to believe in the science and believe the science will pull us through. There is way too much data to bet against the science, but that is the bet on the street right now.

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Presentation May 24th at B.Riley 17 May 2017 07:26 #9340

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The exchange between D'Silva and Girao during the CC was not friendly (tone of the exchange).

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Presentation May 24th at B.Riley 18 May 2017 07:25 #9350

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Tiago's explanation was that D'Silva had expected the secondary to occur in the 3rd quarter after data and at a higher price. He had to adjust his forecast based on the higher number of shares outstanding. He got blindsided just like everyone else and felt management needs to recover credibility with future positive news. We all agree with that.

A couple of interesting points came out of my discussion with Tiago yesterday. From a risk perspective, if the P values come in at .05, then the FDA can require another larger trial delaying everything beyond our financial resources (my words). If the P values come in close to those from the Scleredec trial, the FDA would have no grounds or precedent to delay approval beyond the normal one year. The better the data, the better chances for an approval date sooner than one year. After all, there are no side effects to evaluate which is extremely unusual. If the P values are as I expect, they will not chose to go with the Early Access Program because of the cost of reporting results to the FDA in a phase 4 field trial.

I pressed hard on the $100 million shelf implying they intended to issue a lot of shares to a future partner. Tiago assured me it is not their intension to do an equity partnership. It is cheaper to do one large filing rather than several smaller ones not because of the filing fees with the SEC, but because of the lawyer fees to prepare for the filing. I'm OK with that assurance.

I asked about the early patients in the STAR trial, who passed their 48 week point long ago. That is where the "warm and fuzzy" comment from Hedrick came from two CC ago. The placebo patients must wait until the full data lock before they can be treated in the crossover. Incidentally, the video that I saw of the 5 French women who were amazed at how much better their hands were has not been widely released because they don't want to risk any violations with the FDA for advertising a therapy prior to approval. Decent explanation there!

North Korea could help with the amount of the next contract. Originally, it was $8.3 million, but could be increased due to funding additional work outside of the clinical trial. I suspect this additional funding has to do with preparation for an order to deploy the CTX2 devices upon future data (STAR data as well as RELIEF data). Perhaps that explains the timing difference between the IDE and the contract resolution. We are talking about a few million, not big bucks. Still, it helps with cash burn.
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Presentation May 24th at B.Riley 19 May 2017 11:33 #9354

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Thanks DOV,

1. Re D'Silva's assumptions for lowing the PT or TP. Listening to D'Silva's dialogue with Girao and Hedrick during the CC, he sounds young but a thorough and conservative analyst. The assumptions are not baseless. CYTX has not been able to secure any indication partnership, it would be safe to assume that the company may still go solo after the STAR data readout.

2. There is too much bet that the STAR readout will lead to a FDA approval. This could be dangerous to bet on (in the mind of D'Silva), based on CYTX's past record.

3. If the STAR readout would points to a more extended STAR trial (to generate statistical significance, don't want to rule out other numbers other than less than or equal to 0.001 as the gold standard, because other factors are being considered by the FDA0, I think CYTX would instead do a more cost effective and shorter phase 3 trial in the secondary Raynaud's and pursue the lipo doxo and maybe lipo taxo (lipo taxo would take more money and time), leaving Japan as the main outlet for the celution system. I think the company will go on as a liposomal generic cancer drug company - just like how GERON had done departing from the stem cells r/d business.

4. Now, should the STAR data readout is statistically significant leading to a FDA approval/EU approval a year later, the company will still need a lot of money to activate a lot of preplanned programs. I think Hedrick is betting on a successful EU partnership for scleroderma , a successful liposomal doxo and/or a combined scleroderma-liposomal doxo partnership (with an EU company with oncology exposure - I know there are companies like this in Germany and France).

5. Based on the PPS track record of this company (as well as other companies like ASTM/VCEL) and the influence of Sabby (very bad owners of this stock, who might have "manipulated the share prices" - as discussed on this message board), the STAR data readout may only precipitate a big but short bull run. Just look at VCEL: a sharp spike due to a FDA approval, then an immediate sharp drop due to a secondary (this is what had happened to us a month ago).

Just my opinion.

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Presentation May 24th at B.Riley 20 May 2017 03:46 #9355

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A discriminating post franshei...I like it...LOL

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Presentation May 24th at B.Riley 24 May 2017 14:30 #9365

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The B. Riley Presentation: I think it is a good concise presentation.

It is wise to move the liposomal taxo out further - it would cost a lot of money. CYTX may make good money in lipo doxo frist, before actively pursuing lipo taxo. The market price of $1000 per clinical vial of lipo doxo is about right. This is very much a vial of cisplatin would sell for in the US (the manufacturing cost is about $ 1 - yes, one dollar each vial).

Bristol license cisplatin from NCI for $7000 and had an annual revenue of $ 100 million the first year. From that point on, Bristol Syracuse Oncology became the hottest department in Bristol Myers and Stan Crook was made VP at the age of 35.

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Presentation May 24th at B.Riley 25 May 2017 07:10 #9366

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Not much change from previous presentations. No added color to the current reimbursed treatment cost for scleroderma. To add that color myself, $30,000 to $100,000 per yearfor a treatment that does very little to help the patient. The dosage is determined by tolerability, not effectiveness. This has a lot to do with the justification for pricing the Habeo therapy. Sustained benefits from one treatment for three years is very powerful, but from a pilot trial.

If the Star trial data equals the Scleredec data and Cytori gets the needed support from the Scleroderma Foundation and other media, the FDA approval should come within the full year projected by Cytori. With zero side effects, what will the FDA panel do for all that time? A patient with a stable scleroderma disease will visit their doctor at one of the 40 sites once per year. Patients with ulcers and changing condition will visit their doctors much more frequently. The math suggests each site sees between 5 and 10 patients per day all of whom are strong candidates for the Habeo therapy. Current estimates by B Riley assume 35 patients get treated per year at each site. I would like to see added color on that assumption.

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Presentation May 24th at B.Riley 25 May 2017 07:31 #9367

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I have not had a chance to listen to the presentation and probably will not if there is no difference from past presentations, but one thing I noted whilst going thru the slides...

this one here- the last one with content-


As we all know- Cytori Management is very careful to AVOID any mention of partner deals when wording like Objectives or Milestones are used. Of course, this has to be carefully avoided, since otherwise it would "smell" like aligning the interests of management/BOD with those of shareholders of course, since possibly Pay 4 Performance could be seriously and adversely affected....:whistle:

From that perspective the mentioning as an 2017 OBJECTIVE and MILESTONE of a European Doxorubicin Partnership is "new" to Cytori in the Hedrick days. Of course- the courage was not significant enough to do the same with an European Scleroderma partner as an 2017 OBJECTIVE....:grin:
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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:

Presentation May 24th at B.Riley 25 May 2017 09:10 #9368

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Same here Fas and also took note of the slide you posted since they also state it as a 2017-2018 timeframe in the same presentation...LOL
Doesn't matter imho as we all know further dilution coming soon enough.

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Presentation May 24th at B.Riley 25 May 2017 10:07 #9369

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FAS and others,

Keep an eye on Lapointe Anthony Gregg.

He is a big honcho with deals. He is different from Martelli- Martelli is a very small guy in comparison with Gregg. Gregg is a universal pharmaceutical guy in EU, When I was in SuperGen (also known as SuperGenerics - liposomal cancer drugs), Rubinfeld brought in his old buddy Vida from Bristol and gave him a seat on the BOD for a very good purpose - a lot of deals came in. Gregg is here for a good reason. Guess.

Some history re doxo. Doxorubincin and its analogs comes from Italian NCI and Pharmatalia. Doxo is also known as adriamycin. Pharmatalia launched adriamycin in the US through its Adria in Wilmington DE. Pharmatalia and Adria are the sources for many, many cancer pioneers in the pharma industry (Vita, Vida, Steve Carter, Gino L, Renso, etc - amazing numbers in the industry).

Back to the Riley conference.

The corporate plan is now very clear. As WST has implied many times, CYTX regenerative medicine could remain small, even with scleroderma success, the company needs to reinvent itself in order to grow beyond breaking even. I personally think liposomal doxo and secondary Raynaud's would be the next step. In the US, if the scleroderma indication would become FDA approvable - it is a very important platform illness to build up in the autoimmune illness space. If liposomal doxo would reach the market, the financial return is big, offering needed financial resources to do other things, including lipo taxo, nano regenerative medicines, etc.
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Presentation May 24th at B.Riley 25 May 2017 12:04 #9370

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So franshei...have you moved to the camp that the scleroderma market (hand) may be smaller than many think ?
Agree on the Raynauld's and Lipo doxo steps but remember we still share some of the lipo doxo revenues with former Azaya.
What would you guess a partnered upfront payment would look like for the lipo doxo drug ?

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Presentation May 24th at B.Riley 28 May 2017 09:17 #9377

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Hedge,

Interesting comment about the scleroderma hand market being smaller than many people think. I am not sure what people think at this juncture and the company has done its best to make it as clear as mud. The company states peak worldwide revenues of $600 million. That is NOT Cytori revenues because Cytori would only receive approximately 20% of the ROW (rest of world) revenues. I remember some discussion on this board about what happens after all of the candidates have been treated once. Anyway, to achieve $600 million in worldwide revenue, all sites combined must treat 12,000 patients at $50,000 each.

We don't know much about the commercialization phase (if there will ever be one!), but here are some things we do know:

Between March 24, 2017 and June 6, 2017 (49 working days), the STAR trial treated 48 patients utilizing 19 sites. At that pace, 40 established scleroderma sites in the United States would generate annual revenues of approximately $25 million. At a pace of one patient per week, annual revenues would be $96 million. On average, each site currently sees 35 patients per week. One's condition determines the number of visits per year.

We are less than 60 days away from learning the results of the STAR Trial. If the results are as good as the SCLEREDEC I trial, I would think the treatment pace would be greater than one per week. If, for some unforeseen reason, the results are completely different than SCLEREDEC I, the company will not be able to raise enough capital to survive.

On the last conference call, Hedrick stated "we are very optimistic about the results. We think there are a lot of patients out there that want this and are routing for it. Doctors are rooting for it. We know shareholders are rooting for it."

Once the results have been released, the market will determine through the price action of the stock: 1) how long it will take for FDA approval 2) how long it will take to obtain reimbursement codes and for how much 3) How much support this therapy will get from the medical community and various scleroderma foundations and groups. It is all about estimating future revenues and profit margins and discounting those back to a net present value.

$100 million in revenue at 90% margins, operating expenses of $40 million and 50 million shares outstanding = $1.00/share EPS

At $1.03, the market is placing a 3% chance on this happening. In my opinion, the answer is within 60 days!

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Presentation May 24th at B.Riley 28 May 2017 13:06 #9378

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Obviously I meant 2016

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Presentation May 24th at B.Riley 28 May 2017 20:55 #9379

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I could be wrong but here are a few areas where I believe the street is looking assuming they did get it right and the trial shows decent results.
You touch on a few but I'll add some more color.
1. You hit the nail on the head on what the outstanding share count will be. I believe most feel 40 million is out the window and maybe 50 million will finally be it other than the usual overly generous option awards...however some may be scared it will ultimately be even higher. The key take away is no one knows and the unknown always scares the beejeebers out of the street.
2. The debt...you can simply relate to #1 as part of the problem there along who it attracts. They players I mean.
3. 19 vs 40 sites. STAR got 19 eventually enrolling. It took time and many enrolled few. How long is it really feasible to get 40 up and running...including the cost, training, ect. Another big unknown.
4. Cytori management is been wrong on every market estimate they have ever made. Including various aspects in Japan. Suddenly they are 100% right this time ? Who knows but...
5. FDA, insurance reimbursements and when and of course how much, patient acceptance. Perhaps not all huge hurdles but certainly something we need to gauge.
6. Real money wont come before 2019...even on franshei's favorite topic now, doxo. Lots of time.
7. The data....pinch data was the best but a small trial showed stat sig across the board. You would think the street would love a orphan or near orphan indication product such as this...they don't. Not yet anyway. Why ? Are we missing something or is the companies history and some of the above factors enough for the wait and see. I have no clear answer beyond some of the above.

One last issue for me....if the money does begin to roll in can we trust them not to squander it ?

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