Stem cell-focused NeoStem's (NBS) prospects are looking up. Equity research firm LifeTech Capital announced Tuesday that it has raised its target price for the company by 7% to $4.00, based on NeoStem's recent $20 million acquisition of stem cell storage business Progenitor Cell Therapy.
Progentior has cell therapy manufacturing facilities, as well as processing and storage facilities for stem cells collected from the umbilical cord at birth, located on the east and west coast of the US.
Since Progenitor's inception in 1999, the company has served over 100 clients and has performed more than 30,000 cell therapy procedures, and processed and stored over 18,000 cell therapy products.
LifeTech said it is raising NeoStem's price as a result of the "multiple synergies" Progenitor has with the company, such as stem cell banking, consulting and research and development capabilities.
This, LifeTech believes, will ultimately increase sales with reduced expenses. "NeoStem and Progenitor Cell Therapy were already strategic partners so we expect a smooth transition and integration with NeoStem," the equity research firm added.
While NeoStem's research and development efforts are ongoing in the US, the company has already commercialized adult stem cell therapies in China with indications for orthopedics, wellness, cosmetic and anti-aging purposes.
NeoStem also has a 51% stake in Chinese pharmaceutical company Suzhou Erye Pharmaceuticals, which manufactures and distributes both antibiotic prescription drugs and active pharmaceutical intermediates, with sales expected to approach over $70 million during 2010.
LifeTech's 12-18 month price target and 'strong buy' rating is based on projected 2014 earnings of NeoStem, which were discounted by 20% to adjust for risk, it said.
NeoStem was trading at $1.43 as of 2:19pm EST on Tuesday.