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TOPIC: Azaya Synergies: Allergenic addition

Azaya Synergies: Allergenic addition 05 Mar 2017 13:58 #8953

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I had an interesting discussion with management a couple of weeks ago about the synergies between Azaya and Cytori. Here are some bullet points:

1. Cytori has been talking with Azaya for more than a year.
2. Azaya had a term sheet that was days away from becoming a signed agreement with a mid sized pharmaceutical company when Pfizer bought that company. (I haven’t tried to research what company that might be). While I got an incomplete answer, I did discover the upfront cash portion of the agreement was greater than the $4 million total purchase price that Cytori paid for Azaya. This may provide some idea of how much Cytori could get from a potential partner.
3. Azaya’s ATI-0918 has already been approved in the EU as a bio-equivalent drug to doxorubicin. All that remains is for Cytori to prove they can manufacture the drug compound consistently and then apply for marketing the compound in the EU. Everything takes a full year! Revenues in 2019. Partner in 2017 or 2018.
4. Cytori continues to believe the autogolous method yields greater cell potency than the allergenic method, however they do acknowledge several problems with the autologous business model especially with scleroderma.
5. Many patients with advanced scleroderma simply do not have enough excess fat to harvest. This is especially troublesome when additional treatments are deemed appropriate. In these cases, Cytori is adding an allergenic approach with this acquisition. Donor stem cells could be multiplied and encapsulated within the liposomal nanoparticles.
6. Pharmaceutical companies are more apt to partner with an allergenic business model. Cytori acknowledges this after years of failing to secure an autologous partnership.
7. Cytori continues to pursue autologous partnerships for OA on a worldwide basis; SUI on a Japan only basis; Scleroderma on an outside U.S. basis. Personally, I think there is a huge gap in what partners are willing to pay and what Cytori thinks the technology is worth.

The MAP program has not treated the first patient because the available sources of funds are not willing to pay $50,000 per patient. Cytori has spent a lot of time with consultants and insurance companies who have indicated $50,000 to $65,000 per patient per year based on Scleradec I three-year results. Cytori refuses to lower the price because once you do that, you can never get it back. They are willing to forgo the MAP revenues to protect the eventual gross margin for an approved product application. I hope they are right about that because the cost of that decision could be worth over 15 million shares of dilution.

I did not understand why Cytori would have to go through another IDE for Habeo for secondary Raynaud’s since that was a secondary endpoint of the STAR trial that should show a statistically significant result. This three-phase trial would take until 2020 for a USA launch. The reason I was given was that many Scleroderma patients also have Raynaud’s disease. But, the much larger market is Raynaud’s patients that do not have scleroderma. Still, I think this is an example of how the FDA unnecessarily increases the cost of drug development.

BARDA is delayed a little bit as the FDA wanted to change a few things in the trial protocol. IDE should be approved soon. I questioned if the changes were concerning the IV injection and that was not the issue.
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Azaya Synergies: Allergenic addition 05 Mar 2017 15:22 #8954

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Thanks again DOV

I've been looking this past week for a slide that I thought I saw showing a potential partner was at a later stage than many of us were initially hoping but couldn't find it. Anyway it showed the later timeframe you reference.
50K on the MAP isn't beef and beer raising money....I have long felt that pool was limited.
OA partner...sorry but I still snicker at that one. Not sure if SUI in the form we are aware of is much better but I guess there are others here who are better to comment on Japan.
BARDA = a yawn for me.
March is typically when I write off another year for Cytori. As far as revenues..its done. Scleroderma data should make some difference. Maybe a partner for a CA product but that is sounding like less than 6 month of cash in up front payments.

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Azaya Synergies: Allergenic addition 05 Mar 2017 17:20 #8955

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Hi Dov,
Are you certain about this statement?

"Donor stem cells could be multiplied and encapsulated within the liposomal nanoparticles."

I can't see any reason to encapsulate allogeneic stem cells with nanoparticles when Tigenix, for example, has already met Phase III primary endpoints for Fistula using adipose derived MSCs without the additional complication in their allogeneic model. I still believe that they intend to encapsulate the non-living extracellular vesicles that are the chemical messengers secreted by stem cells. Either way this is an entirely new business model that requires tons of capital to get off the ground, IMHO, starting with pre-clinical work. Cytori should be more transparent in explaining this.

Glad to see the acknowledgement, from Cytori I presume, that the autologous model is a handicap. Didn't even know about the lack of fat in scleroderma patients.

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Azaya Synergies: Allergenic addition 06 Mar 2017 07:09 #8957

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I am fairly certain that is what I heard. However, my source is trying to be so extra careful with his wording that he has begun to stutter. A habit he will find difficult to break.

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Azaya Synergies: Allergenic addition 06 Mar 2017 09:24 #8958

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DOV

I think treatment of the Raynaud's P will be given iv using liposomal regenerative med, rather than the same method employed for the scleroderma primary.

If there is any OA pertnership, I think it will come from Japan - collaboration with a local clinic chain for phase 3 trial.

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Azaya Synergies: Allergenic addition 06 Mar 2017 11:31 #8959

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DOV wrote: I am fairly certain that is what I heard. However, my source is trying to be so extra careful with his wording that he has begun to stutter. A habit he will find difficult to break.


Why did I get this sinking feeling after reading your post last night DOV? Still- was highly appreciated, but leaves a lot to explain, which should have been explained already, but has not been. Sounds familiar doesnt it?

People starting to stutter also do not inspire confidence in the strategy and welfare of the organisation,when the self-confidence of the info-conveyer is lacking. The EU MAP program news really is a bummer, very disappointing.

I hope we will get some answers soon- on the tech side, using liposomal delivery with cells do not make sense to me either. The cells do not need a "boat vehicle" for transport in a "water based environment i.e. blood" in my view. Hope we will get some answers soon here too.

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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:

Azaya Synergies: Allergenic addition 06 Mar 2017 11:53 #8960

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Fas,

Could be that there really are no synergies between the respective technologies and this transaction was designed to boost share price and volume for the LP equity line. That WAS my first thought at the time. Who really knows for sure since they won't explain.

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Azaya Synergies: Allergenic addition 06 Mar 2017 12:02 #8961

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What a mess.

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Azaya Synergies: Allergenic addition 06 Mar 2017 13:29 #8962

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Wall Street Titan wrote: Fas,

Could be that there really are no synergies between the respective technologies and this transaction was designed to boost share price and volume for the LP equity line. That WAS my first thought at the time. Who really knows for sure since they won't explain.


I do not think that there are no synergies. Surely they are based on the concepts we figured out within hours after the announcement of the transaction. That would have the best of two BP requirements- off the shelf and not allogeneic, i.e. having no potential long-term adverse effects, since no genetics are involved.

I do hope to get explanations soon - at least the 4Q CC should come very soon- if they pass by this chance, I will get worried yes.: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:

Azaya Synergies: Allergenic addition 06 Mar 2017 15:06 #8963

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Fas wrote:

That would have the best of two BP requirements- off the shelf and not allogeneic, i.e. having no potential long-term adverse effects, since no genetics are involved.


"Not allogeneic and no potential long-term adverse effects" are not mutually exclusive by any means and DOV used the word "donor" in his description above.

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Azaya Synergies: Allergenic addition 06 Mar 2017 20:52 #8965

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FAS

If you would take another look over the CYTX Pipeline Chart, three clinical indications (secondary Raynauds, thermal burn DCCI 1o, CRM 2100 nanomedicine for scleroderma) all are staged Preclinical. I believe that they are intravenous treatments and they need new IDEs, because they contain certain changes from the original IDE for local dose administration.

In the case for the secondary Raynauds, the clinical trials should be considered phase 4, an extension from the Habeo scleroderma, which is up for FDA approval in 3rd Q, 2018 with a 2019 launch. The clinical testings for the extended clinical application should be considered more abbreviated, building on the prior Habeo Scleroderma approval - thus the launch for the secondary Raynauds is expected to be launched only one year later in 2020.

Secondary Raynauds is less severe than scleroderma and the patient population is much larger. I think CYTX is seeking a more convenient and economic way to capture this patient group.

In the case of CRM 2100 nanomedicine for scleroderma by iv route (to capture a larger scleroderma patient group), the development efforts and time should be longer. I would say CRM 2100 is secondary generation treatment for sclerodemra, while he first generation treatment has its limitations (particularly with the retreatment among skinny patients and higher treatment/retreatment costs) and potentially a smaller market size.

Patents with scleroderma are actually patients with an autoimmune disease, which is not restricted to just the fingers. The illness affects many other parts of the body and localized cell therapy is not enough. Effective treatment requires parenteral dosing, which should be addressed by the second generation nanomedicine.

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Azaya Synergies: Allergenic addition 07 Mar 2017 04:58 #8966

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Wall Street Titan wrote: Fas wrote:

That would have the best of two BP requirements- off the shelf and not allogeneic, i.e. having no potential long-term adverse effects, since no genetics are involved.


"Not allogeneic and no potential long-term adverse effects" are not mutually exclusive by any means and DOV used the word "donor" in his description above.


WST- even if it comes from a donor, one cannot speak of allogeneic any longer, since allogeneic means "genetically different" i.e. with the genetic footprint of "somebody else". These vesicles, hormones, cytokines, enzymes however do NOT have a nucleus and therefore do not have DNA and RNA i.e. do NOT have a genetic footprint i.e. are not allogeneic even if it comes from a donor.

All in my view.

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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:

Azaya Synergies: Allergenic addition 07 Mar 2017 05:20 #8967

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franshei wrote: FAS

If you would take another look over the CYTX Pipeline Chart, three clinical indications (secondary Raynauds, thermal burn DCCI 1o, CRM 2100 nanomedicine for scleroderma) all are staged Preclinical. I believe that they are intravenous treatments and they need new IDEs, because they contain certain changes from the original IDE for local dose administration.

In the case for the secondary Raynauds, the clinical trials should be considered phase 4, an extension from the Habeo scleroderma, which is up for FDA approval in 3rd Q, 2018 with a 2019 launch. The clinical testings for the extended clinical application should be considered more abbreviated, building on the prior Habeo Scleroderma approval - thus the launch for the secondary Raynauds is expected to be launched only one year later in 2020.

Secondary Raynauds is less severe than scleroderma and the patient population is much larger. I think CYTX is seeking a more convenient and economic way to capture this patient group.

In the case of CRM 2100 nanomedicine for scleroderma by iv route (to capture a larger scleroderma patient group), the development efforts and time should be longer. I would say CRM 2100 is secondary generation treatment for scleroderma, while he first generation treatment has its limitations (particularly with the retreatment among skinny patients and higher treatment/retreatment costs) and potentially a smaller market size.

Patients with scleroderma are actually patients with an autoimmune disease, which is not restricted to just the fingers. The illness affects many other parts of the body and localized cell therapy is not enough. Effective treatment requires parenteral dosing, which should be addressed by the second generation nanomedicine.


Franshei- Just that everybody knows, what we are talking about below, the pipeline image involved-



To do Raynauds IV does not make sense to me- injections in the fingers worked so great with Scleroderma, why would one change that with Raynauds?

With your Phase 4 type assumption, you could be very well right. Why else would a 2020 launch be possible? DOV however was writing about a "three phase Trial" i.e. IND instead of IDE- as Hedge properly noted- things are a mess, we simply know so little and so much requires elaboration.

The rest of your post has my agreement and concurrence. With the added comment that doing a phase 4 also requires money on top of the fact that the coffers are empty and there is additional 8 Mio extra burden for 2017.

The money riddle needs to be solved first- I personally cannot believe they want to milk Cowens and Lincoln Park at these prices and am still crossing my fingers for a different solution.
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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:

Azaya Synergies: Allergenic addition 07 Mar 2017 07:45 #8969

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FAS and Rodney Strong

I am surprised, but based on "Well. Well. Well" 3/7/2017 and some more recent past messages,

DOV appears to sit on the short side of the stock.

If so, DOV may be successful to chill FAS and many others with his diligence. Is WST also sitting on the same side?

Maybe not, are all of us Swing traders and not true longs?

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Azaya Synergies: Allergenic addition 07 Mar 2017 07:57 #8970

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Franshei,

You need to better understand options! Selling a PUT option is a bullish trade. That is what I have done and done in a rather large way if you consider I am short 200 June $3 puts and 450 June $2 puts. This means I am obligated to buy a total of 65,000 shares at a net cost of under $1.50 in June or sooner if put the stock. My reasoning is that the odds heavily favor the STAR trial achieving a P value of <.05 and probably more like <0.005. This would assure approval from the FDA and should mean a rally in the stock. I chose June options because I want to add to my position prior to these results coming out.

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Azaya Synergies: Allergenic addition 07 Mar 2017 08:25 #8971

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Fas,

I guess the first thing to figure out is whether what DOV was told about stem cells being encapsulated, which both you and I agree doesn't sound right, is true. But yes vesicles are not biologics and contain no DNA. However, most adult stem cells have been shown to be like type O blood and basically immunogenic. Moreover, they don't even engraft so in my view it is a moot point.

Tigenix was in the same place as Cytori years ago and its move to the allogeneic model was certainly the right move. More good news yesterday for them.

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Azaya Synergies: Allergenic addition 07 Mar 2017 09:49 #8974

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franshei
***Selling a PUT option is a bullish trade.***
Franshei by doing this DOV collects the premiums as profit as he is betting CYTX will be trading higher than the strikes at the time of expiration. So he is basically bullish the stock but it cost him nothing beyond the trade commission.
Maybe a different way to think of it is a double negative equals a positive.

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