Henry McCusker's  Instablog

No new securities are being offered ..contrary to the "Fly" non-article

NeoStem is … NOT … engaged in a new financing as reported by "The Fly on the Wall.com … Get the facts straight - they just finished one for $10.7 M in proceeds.

This registration statement was merely a renewal of an outstanding registration statement that covered the potential issuance of shares underlying warrants that were issued 3 years ago and remain outstanding.

NBS has an existing "shelf" registration statement on Form S-3, File No. 333-166169, that was declared effective on May 11, 2010 and which expires on May 11, 2013 pursuant to Rule 415(a)(5) under the Securities Act.

NBS filed … this new Registration Statement for the sole purpose of ensuring that an effective Registration Statement covers the exercise of such previously issued November 2010 $1.85 Warrants and Series E Warrants.

The Bottom Line: What the "hell" is this …!!! If NBS … were … to sell … any securities being registered, NBS would identify this event! The underlying shares were previously registered but the registration statement expired under relatively recent SEC rules needed to be refreshed. So bless me father in public confessional for using bad words to tell the truth!

NBS closed at $0.53 DOWN a penny from Wednesday.

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

Net loss was $7.7 million, or ($0.11) per share

Net loss was $7.7 million, or ($0.11) per share for Q1/13 compared to $9.3 million, or ($0.16) per share, in Q1/12.

Revenues were $3.8 million, compared to $1.5 million in Q1/12. Product and government contract revenues were $1.9 million, compared to $1.5 million for Q1/12. Government contract revenues were $500 K related almost entirely to work performed under the BARDA contract, for which there were no comparable revenues recognized in Q1/12. Additionally, $1.8 million in revenue was recognized for services performed in relation to the JV with Olympus and the Senko distribution agreement. During Q1/13, CYTX terminated the Senko distribution agreement and reacquired from Senko the rights to SurgiWrap in Japan. Gross profit was $600 K, or 46%, compared to $600 K, or 42%, in Q1/12.

R&D expenses were $3.7 million compared to $2.8 million in Q1/12. The planned increase in R&D expenses is mostly related to services performed under the BARDA contract, in addition to clinical trial costs. SG&A expenses were $6.1 million compared to $6.3 million in Q1/12. Total operating expenses were $9.739 million versus 8.996 million in Q1/12 with an operating loss of (-6.737) million versus (-8.365) million. Shares used in computing the net loss in Q1/13 were 66.99 million compared with 57.48 million in Q1/12.

• CYTX ended Q1/13 with $16.4 million of cash and cash equivalents and $3 million in accounts receivable.

Guidance: CYTX reiterates guidance for the year of $15 million of product and contract revenue. Gross margins are expected to increase substantially in the second half of 2013 as increased second half revenues are realized. CYTX's core milestones for the next 12 months include the following:

• Complete enrollment in the ATHENA trial
• Achieve proof-of-concept milestones in the BARDA contract and qualify Cytori for up to $56 million in additional development funding
• Publish the 18 month outcomes from the PRECISE European chronic ischemic heart failure trial
• Continue to strengthen the Company's patent position
• Generate product and contract revenue of $15 million in 2013

Q1/13 Highlights:

• Entered into an agreement to acquire the remaining interest in the Olympus-Cytori Joint Venture, including all manufacturing rights for the Celution® System;
• Continued enrollment in the ATHENA trial of Cytori's cell therapy for chronic ischemic heart failure; goal for completion of enrollment remains summer of this year;
• Continued enrollment in the ADVANCE European heart attack trial; the current goal for enrollment is 25 patients by year-end 2013;
• Opened new tissue ischemia and intravascular markets for the Celution® System with expanded CE Mark claims for these respective indications;
• Submitted report to BARDA containing data demonstrating achievement of the first of 3 objectives under the BARDA contract by validating the core design elements of the next-generation Celution® System; achievement of the other objectives is anticipated on or ahead of schedule;
• On track to have a nationwide Japanese distribution network;
• Awarded 2 patents, including a methods patent for using adipose-derived stem and regenerative cell therapy for treating renal disease;
• Recruited Dr. Steven Kesten as EVP and CMO.

The Bottom Line: CYTX closed at $2.60 UP +$0.04 or +1.56% to $2.60 and is DOWN in the after-market -$0.01 or -0.38% to $2.59. I believe this was one of the most informative Q reporting with no whining aspects of beginning the year compared to a few of the reporting companies.

CYTX reduced near and long-term liabilities in Q1/ by approximately $5.8 million. A substantial portion of its recent and projected cash needs relate to principal payments on its existing term loan. CYTX is in discussions with its lender group to extend the term of the loan and defer principal payments to coincide with anticipated product sales, government contract payments, and other potential cash milestones.

Also, consider the positives of CYTX in relation to the RegMed sector: completion of enrollment in ATHENA, successful execution of the BARDA contract deliverables, and growth in total revenues.

CYTX's product revenues were more heavily weighted by orders from Japan.This is driven in Japan based on the recent Class I approval and in Europe by the Celution® System CE Mark for intravascular delivery and tissue ischemia.

For the remainder of 2013, it is expected that product revenue growth will be driven by expanded research and general clinical use based on recent regulatory approvals in Japan and the EU.

Another positive, CYTX is seeing growing interest in the number of investigator-initiated studies, the number of multi-center studies and the number of patients anticipated to be treated in those trials. Financially, these trials are funded primarily by government grants or funds from specific healthcare institutions. Recently, an approximate $5 million grant from the Ministry of Health, Labor and Welfare (MHLW) in Japan was issued to support a multi-center trial that could lead to approval and reimbursement for cell therapy for stress urinary incontinence.

In Europe, CYTX has been informed by an investigator in France that an ongoing pilot study in patients with hand complications from scleroderma is being considered for a multi-center trial based on encouraging preliminary results.

The Puregraft® product line continues its positive sales trends. Record Puregraft® revenues were reported with growth in both sales and units shipped in sequential quarters as well as quarter over year ago quarter. This trend reflects the increasing demand for this product as well as the overall growth in fat grafting among plastic and reconstructive surgeons.

CYTX expects to accelerate Puregraft® sales with the launch of an important product line extension later this year, targeting a significant market for small volume fat grafting procedures.

CYTX has finalized an agreement with Olympus Corporation to acquire all of Olympus' rights to the Olympus-Cytori Joint Venture, including Celution® product manufacturing and patent rights and eliminating any royalty obligations to the Joint Venture.

As part of the agreement, the Olympus-Cytori Joint Venture will return all rights to Cytori at closing in exchange for alternative payment or call options including: $4.5 million within 1 year or $6 million within 2 years <some of which is part of dollars already held>.

I consider CYTX a … BUY … and value <that they haven't driven to the offering window> reducing costs and decreasing the net losses while structuring their guidance to highlight their current service agreements with BARDA and other sources. Regaining full control of manufacturing rights provides CYTX with greater flexibility on the manufacturing process and associated costs, enables higher margins, and speeds the transition to the smaller next-generation system although at a I believe a … minimal cost as associated with the dollars invested over the development and past partnered agreement.

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

Enhancing Hematopoietic Stem Cell Engraftment will be the first indication

PSTI has identified its first clinical indication in the hematology field for its Placental eXpanded (PLX) RAD cells for the enhancement of the engraftment of Hematopoietic Stem Cells (HSC) in patients experiencing a delay or failure of their bone marrow transplant (BMT).

This follows Pluristem's completion of additional pre-clinical studies showing promising results for PLX-RAD for this indication. PLX-RAD is currently being evaluated by the U.S. National Institute of Allergy and Infectious Diseases (NIAID), a division of the U.S.NIH, in models of the acute radiation syndrome (ARS).

The Bottom Line: PLX-RAD cells have been shown to have an immunomodulatory effect via the secretion of cytokines and proteins that are known to stimulate Hematopoietic Stem Cells (HSC) to enhance the production of white blood cells, red blood cells and platelets. There was also evidence of a significant improvement in the recovery of these three blood lineages in bone marrow deficient animals compared to control animals.

PSTI closed at $2.97 and is UP +$0.09 or +3.03% to $3.06 in the pre-market. I would add another $0.05-$0.07 to the current movement by the close of day. A "BUY".

The essential element in BMT is the transplantation of Hematopoietic Stem Cells (HSC), the precursor of the formed elements of the blood (red cells, white cells and platelets). BMT is commonly used in the treatment of hematological malignancies to reconstitute the patient's bone marrow after their diseased marrow is eradicated with chemo or radiotherapy. Approximately 15% of patients undergoing BMT will either have a significant delay or failure to engraft the HSCs contained in the BMT, a condition that is life threatening, expensive and often requires the continued support of the patient with blood products. According to the National Marrow Donor Program, an estimated 25,000 allogeneic bone marrow transplants are performed annually worldwide. Approximately 15% of these patients will either have a delay or failure to engraft the HSCs, resulting in a condition that is life threatening, expensive and often requires the continued support of the patient with blood products. PLX-RAD may be beneficial to these patients.

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