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Henry McCusker
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Editor and Publisher ... Henry enters his twelve (12) year at RegMed Investors which aggregates, curates and creates bottom-line content of regenerative medicine and cell therapy news providing a "vetted" selection of relevant and high-impact synthesis. He was VP - Strategic Planning... More
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Scimitar Equity-Regenerative Medicine Investors
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Scimitar Equity Blog
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  • SeekingAlpha Undermines NeoStem's (NBS) Stock Performance With Nom De Plume Fact And Questionable Articles

    SeekingAlpha undermines NeoStem's (NBS) stock performance with nom de plume fact and questionable articles

    Again and again, the vehicle for shorts to "obscure" the facts via S/A

    The RegMed sector, I thought was emerging from "hibernation" but, as the markets take down one … so goes the universe.

    "NeoStem (NBS closed -10.5%) started the day in positive territory but quickly faded into the red and is now down double-digits. Even they < SeekingAlpha (S/A)> admit … It looks likely that an article by SeekingAlpha contributor Probio Invest <3 articles, 2 instablog and 33 followers> is weighing on the shares. Probio says a study that showed autologous stem cells did not boost heart function "clearly does not bode well for NBS' AMR-001." <Source: SeekingAlpha>

    Article that I question … http://seekingalpha.com/article/1695942-competition-landscape-looks-much-brighter-for-sunshine-heart-after-stem-cell-therapy-failure?

    But, did he get the facts right (?), is this nom de plume a legitimate author or a "short" plant (?), or is this just a "spurious" article that … as usual, S/A did … not validate or verify and seeks to "legitimize the "shrills" of shorting.

    NeoStem (NBS) has run … "fast and furious" … lately in price appreciation which made it a "target" for the short sellers. But, many of the SeekingAlpha articles … don't establish the facts and obscure the facts … blatantly to the retail universe - who in many cases do not know the difference!

    I find it hard to claim the Capricor's (CADUCEUS) cells didn't work …there was actually a positive signal for efficacy, but study was very small so subject to type 2 error - plainly said it was too small of a trial to document benefits in clinical outcomes, so the fact that it didn't do so is expected. If the control group had such high event rates … a clinical benefit was shown that would be a problem!

    But just for the sake of discussion let's say that the Caduceus cells don't work -- why should AMR-001? <to address this question one needs to ignore the fact that this entertains a notion that one cell's failure or success predicts the fate of others - no one would posit this about small molecules or biologics>.

    NBS' CD34 cell, the therapeutic being testing in the P2 study, is one of the principal cells that are naturally called upon during any ischemic insult to help protect/repair the vasculature. That story is very well documented and it has been reiterated by multiple labs in pre-clinical and clinical models.

    At least 4 randomized double-blinded, controlled human clinical trials have shown a positive signal for efficacy and safety of CD34 cell therapy for ischemic tissue repair. Is there any other CV cell therapy that has that track record? Even those not intentionally studying CD34 cells have shown the relationship between CD34 cell content and clinical outcome in their studies (Zeiher, Perin).

    By comparison the cardiosphere is a melange of cells not defined in nature by a response to injury as far as we know - the cardiosphere itself was created as a result of the development of manufacturing methods to derive a cell product containing potential progenitors and repair cells. One of the best characterized and perhaps most potent of the cells contained within cardiospheres, ckit+ cells, are likely a minority of those delivered. An autologous prep of cardiospheres showed a positive signal of bioactivity in the clinical trial and could work for cardiac repair even though there may be variable potency due to the manufacturing method.

    Notably Capricor has shifted to an allogeneic approach for which there is no human data at this time.

    In essence comparing NBS' CD34 cells to the cells of Caduceus is not rational and using what amounts to a positive study to claim negativity of the field belies some other purpose than scientific discourse.

    And … this is NOT the first case of misrepresented and misconstrued facts from SeekingAlpha!

    Should FINRA investigate the "significance" of Seeking Alpha's participation in "running the shares" in this market?

    SeekingAlpha … seems so proud to say … Probio is one of their contributors! Have they forgotten that they are creating "animosity" of the RegMed universe - in their "selectivity" of contributors?

    If … I have "something" to say and I usually do - I put my name on the article for context and attribution!

    NBS came back and closed at $8.27 DOWN -$10.59% to $8.27 after having a day's range of $7.88 to $9.89 with a share volume of 1.5 M shares compared with the average 3 month volume of 283.67 K shares after a previous close of $9.25.

    As I stated in the mid-day … NeoStem (NASDAQ: NBS) … was jumping on patent news until a "SHORT SALE" Uptick Rule 201 was put into effect … since it was "spiking" DOWN.

    NeoStem's (NYSE MKT: NBS) was … once again … subject to short selling restrictions …The short sale rule 201 was put into effect just at 11:47 am. This alternative uptick rule is designed to restrict short selling from further driving down the price of a stock that has dropped more than 10% in one day. It will enable long sellers to stand in the front of the line and sell their shares before any short sellers once the circuit breaker is triggered. The rule is designed to preserve investor confidence and promote market efficiency, recognizing short selling can potentially have both a beneficial and a harmful impact on the market.

    Reiterating a 94 <from 90> relative strength factor. BUY NBS on dips!

    Trading UP to name a few were: BioLife Solutions (OTC: BLFS) +$0.03 to $0.79, BioTime (NYSE MKT: BTX) +$0.17 to $3.96, Geron (NASDAQ:GERN) +$0.26 to $2.25, Harvard Bio (NASDAQ:HBIO) +$0.01 to $5.40, Pluristem (NASDAQ:PSTI) +$0.21 to $3.43 and StemCells (NASDAQ:STEM) +$0.06 to $1.79 and Verastem (NASDAQ:VSTM) +$0.25 to $13.96.

    Trading DOWN to name more than a few were: Aastrom (NASDAQ:ASTM), Athersys (NASDAQ:ATHX), bluebird bio (NASDAQ:BLUE), Cytori (NASDAQ:CYTX), Medistem (PINK: MEDS), NeoStem (NASDAQ: NBS), Neuralstem (NYSE MKT: CUR), Northwest Bio (NASDAQ:NWBO), Opexa (NASDAQ:OPXA), Osiris (NASDAQ:OSIR), Sangamo (NASDAQ:SGMO) and Stemline (NASDAQ:STML).

    Early Movers - equities were NEUTRAL with 18 red (down), 18 green (ups) and 7 black (flats).

    Mid-Day - equities were NEGATIVE with 19 red (downs), 15 green (ups) and 6 black (flats).

    At the Close - equities were NEGATIVE with 25 red (downs), 15 green (ups) and 2 black (flats).

    In the broader market … stocks eased off their session highs Monday, but the Dow and S&P 500 were still within 1% of hitting their all-time highs following news that Larry Summers had pulled out of the race to be the next head of the Fed.

    The NASDAQ closed DOWN -4.33 (-0.12%) to 3,717.85 while the DOW was UP +118.72 (+0.77%) to 15,494.78. The CBOE Volatility <fear factor> Index (VIX) bopped to near 14.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Sep 16 6:23 PM | Link | Comment!
  • Cytori Therapeutics (CYTX) Q2/13 Results – Revenue Misses While EPS Beats By $0.08. I Smell The Smoke But Don't See The Fire As They Leverage Risks, Narrow The Focus And Expectation!

    Net loss was $3.135 M or $0.05 per share

    Net loss was $3.135 M or $0.05 per share compared to a net loss of $7.883 M or $0.13 in Q2/12. Net loss for the first six months of FY13 was $10.9 M, or $0.16 per share, compared to $17.2 M, or $0.30 per share, in the first six months of FY12.

    Total revenue for Q2/13 was $2.3 M. Total product and BARDA contract revenues $2.3 M, compared to $1.9 M in Q2/12. Gross profit for Q2/13 was $800 K compared to $900 K in Q2/12. R&D expenses for Q2/13 were $4.2 M compared to $3.2 Min Q2/13. The increase is predominately related to reimbursed services performed under the BARDA contract, in addition to increased clinical trial costs. SG&A expenses for Q2/13 were $6.5 M compared to $6.4 M in Q2/12. DuringQ2/13, as a result of acquiring Olympus Corporation's 50% interest in the Olympus-Cytori Joint Venture, CYTX realized a non-cash gain of $4.9 M due to the independently assessed valuation of its previously held equity interest. Also, as a result of the acquisition, CYTX recorded a $2.5 M non-cash gain resulting from the elimination of the option liability between Olympus Corporation and Cytori. Shares used in computing the net loss were 67.2 M in Q2/13 versus 58.676 M in Q2/12.

    • CYTX ended Q2/13 with $13.6 M of cash and cash equivalents and $2.9 M in accounts receivable. Subsequent to the end of the quarter CYTX received $5 M from the upfront payment associated with the divestiture of the Puregraft® product line.

    6 Month Results:

    • Total revenues for the first six months of 2013 were $6 M compared to $5.9 M for the first six months of 2012. Total revenue for the first six months of 2013 included $2.8 M in product sales and $1.4 M in BARDA contract revenue. Gross profit for the first six months was $1.4 M compared to $1.5 M for the first six months of FY12. R&D expenses for the first six months were $7.9 M compared to $6.1 M for FY12. The increase in R&D expenses is predominately related to reimbursed services performed under the BARDA contract, in addition to increased clinical trial costs. SG&A expenses for the first six months were $12.6 M compared to $12.7 M in FY12.

    Highlights

    • Received FDA approval to expand the ATHENA trial of Cytori's cell therapy for chronic ischemic heart failure;
    • Completed first BARDA objective; substantial progress toward the 2nd objective; final objective underway and is on schedule;
    • Entered $15 M agreement to divest Puregraft® and out-licensed Celution® for Alopecia;
    • Restructured term loan resulting in net proceeds of approximately $8 M and deferral of principal payments through 6/14;
    • Establishing a nationwide Japanese distribution network for Class 1 Celution® System sales;
    • Received approval for the Celution® System in Australia for processing and delivering adipose-derived regenerative cells as well as commercial registration in New Zealand;
    • Entered into an agreement to acquire the remaining interest in the Olympus-Cytori Joint Venture, including all manufacturing rights for the Celution® System;
    • Awarded 3 patents, including a methods patent for using adipose-derived regenerative cell therapy for treating renal disease and licensed exclusive rights to a patent related to adipose-derived regenerative cells for the treatment of autoimmune diseases;
    • Recruited Dr. Steven Kesten as EVP and CMO

    The Bottom Line: They made progress but slowly ... patients enrollment in Athena continues <not much fire there but there is smoke> with FDA approval to expand the scope of the ATHENA clinical program <a little more definition is needed>, continued qualification for BARDA, a spatter of commercial registration in Australia, Contained SG&A expenses <way too high to begin with> … still too slow in recognizing product revenue - hopefully the 2nd half will be better. Regulatory approvals … are still too slow. Cash be ... problematic as they proceed through the 2nd half?

    The Puregraft® was a good deal as it drew away focus to the current focus. CYTX is adjusting 2013 revenue target to $14 M in combined product and cash contract revenue - could that be considered … guidance? The restructured term loan resulted in net proceeds, deferred payment and lesser quarterly payments - prolonging their capacity to BARDA payments and any … partnering collaborations which precludes any run to the capital markets - they still need to cut expense!

    CYTX … expects the Athena program to begin enrolling in Q4/13 at up to 10 centers, immediately following the full enrollment of ATHENA. Athena II is important to determining the optimal cell dose for heart failure. In addition to strengthening the clinical data on the utility of ADRCs for heart failure, CYTX believes having this additional data on a 2nd dose will maximize the chance of a pivotal trial. Full enrollment of ATHENA II is anticipated during the first half of 2014 and is not <they state> expected to delay the initiation of the U.S. pivotal trial planned for 2015.

    The ADVANCE trial has enrolled 23 patients. As part of a comprehensive evaluation of CYTX's global cardiovascular strategy, resource utilization and development priorities, they have decided to … discontinue enrollment … in the ADVANCE trial <EU clinical trial for acute myocardial infarction (heart attack)> once it has achieved the 2013 target enrollment goal of 25 patients or on 9/30/13.

    CYTX closed at $2.65 DOWN -$0.04 or -1.49%. Expect a further drop but CYTX should settle as they stand but, better deliver. I still fly the CYTX banner but a SELL is appropriate until <again> it settles with a $2.45 - $2.50 bottom and I am back … IN!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 09 7:45 AM | Link | Comment!
  • NeoStem (NASDAQ: NBS) Q2/13 Results – Beats On Revenue With A Smaller Net Loss Than Expected While Expenses Range Up And Down Due To The Discontinued Operations And New Management Additions Add To The Limelight

    Net loss for Q2/13 was $8.6 M compared to $33.4 M for Q2/12.

    For the six months ended 6/30/13, net loss from continuing operations excluding non-cash charges was $13 M. The net losses from discontinued operations - net for Q2/13 was $26.2 M, representing the operations of former Pharmaceutical Manufacturing - China segment, comprised of 51% interest in Suzhou Erye, which was sold in Q4/12.

    Progenitor Cell Therapy generated revenue in Q2/13 to $4.4 M from $2.5 M compared to $3.4 M for Q2/12, a 73% increase in revenues from Q1/13. ForQ2/13, total cost of revenues was $4.2 M compared to $2.7 M for Q2/12, representing an increase of $1.5 M or 55%. The increase is primarily due to the completion of 3 third party process development contracts during Q2/13, resulting in the recognition of approximately $1.5 M of previously deferred costs associated with the contracts. Overall, gross profit for the $100 K or 3%, compared to gross profit for Q2/12 of $600 K or 19%.

    For Q2/13, operating expenses totaled $8.3 M compared to $7.4 M forQ2/12, representing an increase of $900 K or 11%. R&D expenses were approximately $4 M for Q2/13 compared to $2.7 M for Q2/12, representing an increase of $1.3 M, or 46%. R&D expenses associated with the P2 clinical trial for AMR-001 increased by approximately $1.3 M for Q2/13. Equity-based compensation included in R&D expenses for Q2/13 was approximately $100 K compared to $300 K in Q2/12. SG&A expenses were approximately $4.3 M for Q2/13 compared to $4.7 M in Q2/12 representing a decrease of approximately $400 K, or 9%. Equity-based compensation included in DG&A expenses for Q2/13 was $900 K, compared to approximately $1 M for Q2/12 representing a decrease of $100 K. Non-equity based G&A expenses for Q2/13 was $3.4 M, compared to $3.6 M for Q2/12, representing a decrease of $200 K. Selling expenses also decreased $100 K compared to the prior year period. Other expense, net for Q2/13 was $58 K compared with $24 K in Q2/12. For Q2/13, interest expense was $100 K compared with $500 K for Q2/12.

    • Ended Q2/13 with $14.7 M in cash and, subsequent to June 30, 2013, raised an additional $3.9 M in cash through warrant exercises and issuance of stock

    Highlights:

    · Continued enrollment in the PreSERVE P2 AMR-001 clinical trial, with 120 patients infused as of 8/8/13;

    · Executed agreements with the University of California, San Francisco to collaborate on the development of human Regulatory T cells for the treatment of type 1 diabetes ("T1D") within the Athelos subsidiary;

    · Effected 1-for-10 reverse split of common stock;

    · Transferred listing to NASDAQ from NYSE MKT <AMEX>;

    · Raised $11.5 M in an underwritten public offering through Aegis Capital Corp;

    · Named Stephen W. Potter as Executive Vice President;

    · Recruited Douglas W. Losordo, MD, FACC, FAHA as Chief Medical Officer;

    · Acquired new clients for Progenitor Cell Therapy;

    · Expansion of intellectual property worldwide to provide regional partnering opportunities;

    · PCT completed 3 process development contracts, triggering higher revenue recognition. PCT also recently signed 2 new clients, including a large pharmaceutical company that is entering the cell therapy sector;

    · Secured $4.6 M in grants to support VSEL™ Technology to advance treatments for wound care, bone regeneration, and macular restoration.

    6 Month Results:

    Revenues from continuing operations for the six months were $6.9 M, compared to $7.1 M for the same periods in 2012. Net loss for the six months was approximately $17.5 M compared to $42.6 M for the six months ended June 30, 2012. Net losses from continuing operations for the six months were approximately $17.5 M and $15.2 M in FY12. The net losses from discontinued operations - net for the six months ended were approximately $27.4 M, representing the operations of the former Regenerative Medicine - China segment, which was deconsolidated in Q1/12 with the operations of pharmaceutical manufacturing - China segment. R&D expenses were approximately $7.1 M for the six months compared to $4.7 M for the same period in 2012 for, representing an increase of $2.4 M or 53%. R&D expenses associated with the P2 clinical trial for AMR-001 increased by $2.3 M. Equity-based compensation included in research and development expenses for the six months and June 30, 2012 were approximately $300 K in each period. SG&A expenses were approximately $10.1 M for the six months ended June 30, 2013 compared to $11.1 M for the six months ended June 30, 2012, representing a decrease of approximately $1 M, or 9%. Equity-based compensation included in SG&A expenses for the six months ended June 30, 2013 was approximately $2.8 M, compared to approximately $3.2 M for the six months ended June 30, 2012, representing a decrease of $400 K. Non-equity based G&A expenses for the six months ended June 30, 2013 were approximately $7.2 M, compared to approximately $7.5 M for the six months ended June 30, 2012, representing a decrease of $300 K. Selling expenses also decreased $400 K compared to the prior year period.

    The Bottom Line: The operations are smoother but need focus to cost containment but clinical costs are on target. A cleaner version of the NBS should be better and forth-coming as Q3/13 unfolds! Equity based compensation as related to specific units should be consolidated as even I am confused! AMR-o1 advances as do … other subsidiary endeavors with a leaner focus of results and expectation. Cash position isn't bad considering other comparable entities. As the 2nd half unfolds … I expect greater specificity and metrics to evolve making measureable results more attuned to financial and trial expectations!

    NBS closed DOWN -$0.10 or -1.35% to $7.30 with 306 K volume on 8/8/13 from $7.40 with 297.7 K volume on 8/7/13 and after being UP +$0.46 to $7.75 with 620.5 K on 8/6/13. Not so bad, considering the reverse and subsequent listing on the NASDAQ. <Disclosure - I attended the opening bell for NASDAQ: NBS ceremony>. Most comparable companies in the RegMed universe are trading DOWN post earnings release - I would foresee a smaller discount to the current pricing but … notice an appreciation focus to the stock as the anticipation was marginalized by events, share pricing, volume and attraction of industry named additions to the management team and hopefully … a new CFO soon.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 09 7:42 AM | Link | Comment!
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