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TOPIC: WebVest and NEW REGISTRATION

WebVest and NEW REGISTRATION 08 Nov 2013 09:19 #1050

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I am getting mail notifications from WebVest- a small (new) stock analyst outfit, where Putnam also is now employed.
They seem to be big Cytori fans and rightly so.

Just a note from me- registration (and login) was hindered by my new caching- speed up the site philosophy. Only in the non-cached Raccoons Lodge the login worked and at other places one would get a message- "unvalid token". This is also resolved now-
THE REGISTRATION AND LOGIN can NOW be done in the general menu (bottom of each page) and at entry on the front page or the blogs section right in the menu at the top. It opens a new page, which is excluded from caching.


This is the article from WebVest- link here - WebVest Securities

$24 Million Equity Infusion Better Than A Stick In The Eye– More important than Cytori’s Q3 results was the detail management supplied surrounding the recently announced equity infusion of $24 million, valued at $3.00 per share Made by Lorem Vascular, a recently formed company led by K.T. Lim, a real estate developer (Victoria Investment Properties) headquarter in Victoria, Australia. Mr. Lim appears to have been involved in numerous business ventures throughout the Pacific region. In addition to the eight million shares (10.6% of outstanding shares making Lim the Cytori’s largest shareholder) Lorem will acquire a 30 year license agreement to commercialize Cytori’s adipose cell therapy for the treatment of cardiovascular, renal and diabetes in China, Hong Kong, Malaysia, Singapore and Australia.

Awaiting approval of its technology in China, which we believe will occur in 2014, Lorem will launch immediately in Hong Kong, Singapore and Australia which will provide Cytori with approximately $7 million in Celution system and consumables revenues of which $2 million should occur almost immediately. The contract call for licensing payments to Cytori of up to $500 million over 30 years based on specified revenue milestones being achieved.

Can Lorem Vascular Deliver ?– So the question really boils down to, “can a very successful real estate developer become a very successful medical device entrepreneur”? Chris Calhoun’s answer is that CYTX has had an 18 month due diligence with Mr. Lim and he, Calhoun, has personally been involved for the past six months. Mr. Lim is known as a major entrepreneur in Asia & Australia with strong personal political and regulatory relationships especially in China. Lorem will begin operating this coming Monday, November 11th having spent the past several months developing the infrastructure necessary to become a sales and marketing organization. Mr. Lim has invested substantial capital in both CYTX and as importantly, in Lorem. While only time will tell if this is the “right” partner, we are encouraged by Chris Calhoun’s sense of enthusiasm for the relationship with Lorem and Mr. Lim. The most important element of the relationship is that CYTX participates along with Lorem in its revenue growth through a direct royalty.

BARDA, Japan & Clinical Trial Update—The BARDA contract for the treatment of thermal burns calls for total potential payments of $106 million under three phases. The initial phase of the contract provides approximately $5 million to achieve three primary objectives. Achieving these three objectives qualifies Cytori to seek a second phase of the contract worth up to $56 million in additional funding toward product development and clinical trials.

The first objective, which was validation of the performance of the next-generation Celution System has been achieved. During the third quarter, Cytori submitted data to BARDA on the second and third objectives and is in the process of scheduling of an In-Process Review (IPR) meeting with BARDA early in the first quarter of 2014. Favorable review at this meeting may lead to funding of up to $32.6 million over three years for Option 1. This would fund a pilot stage clinical trial program in thermal burn injury, ongoing development of the next generation Celution System, and any FDA-required preclinical studies. Cytori anticipates a second IPR meeting on schedule for Option 3. Option 3 is valued at up to $23.4 million over approximately four years.

ATHENA I and II—Athena I’s protocols have been reset, an eighth center has been added and the trial restarted with a goal of 45 patients (currently 16 patients) and reporting clinical data by year end 2014. The higher dose trial, Athena II will be in 10 centers and commence in Q1 2014 with enrollment of 45 patients by year end 2014 with a pivotal trial to be initiated in 2015.

JAPAN Trundles Along—Japan remains a cloudy regulatory environment with several laws having yet to be undertaken by the Japanese Diet. This legislation will reduce the very laborious regulatory system that is currently in place. Additionally, the safety of adipose cell therapy is well established and as such, we believe CYTX could become among the first companies to achieve both regulatory and reimbursement approvals and could actually result in reasonable revenues in late 2014/early 2015.

Additional Capital Should Provide Sufficient Cash to Achieve 2014 Goals—CYTX finished Q3 with $13 million in cash and with the addition of the $24 million it will receive from Mr. Lim, $12 million of which has already been received, if management continues to hold spending on SG&A steady, the company should be able to achieve its regulatory and BARDA goals for 2014. The company reiterated its 2013 revenue guidance for product sales and research revenue of $14 million which implies Q4 revenues of $5.3 million vs. $4.0 in the same period of 2012. In comments during questioning, Calhoun said the quarter is shaping up to be quite strong and the $5.3 million could be exceeded, slightly.

Our Conclusion—Going into the call we were dubious about Lorem and its ability to deliver on what is a potentially very large opportunity in the markets it has been granted, especially China where heart disease is an extremely large problem. We come away with only mild skepticism based on the significant amount of personal capital being invested by Mr. Lim in both Cytori and Lorme and his very strong entrepreneurial track record. It appears that Lorem is further along in developing a team to address these markets than we saw at the outset of the announcement. Additionally, given the time it will take to achieve regulatory approval in China, sometime in 2014, Lorem will have the additional time it may require to scale-up in advance of the opportunity. We believe that the additional capital flowing into Cytori does reduce the risk associated with this fledgling technology and company
The following user(s) said Thank You: d9dozrman

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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:
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