Cockrell Group's  Instablog

Cockrell Group
Send Message
The Cockrell Group, Inc. is a strategic capital markets development firm focused on small-to-midcap companies. It aligns a company's strategic goals to an institution's investment thesis and fundamentals to create a sound, long-term investment objective. The company also advises companies in... More
My company:
COCKRELL GROUP
  • LOM Initiates Coverage On Two Regenerative Medicine Companies  0 comments
    Oct 25, 2012 8:33 PM | about stocks: ANIK, AXGN, BMTI, DXTR, CRY, CYTX, EV, PDLI

    Analyst Tao Levy of Loewen, Ondaatje, McCutcheon (LOM) initiated coverage on two companies today; AxoGen, Inc. (NASDAQ:AXGN) share with a BUY rating and a $5 price target and BioMimetic Therapeutics, Inc. (NASDAQ:BMTI) With a BUY rating and a $7.50 price target.

    AxoGen is an emerging player in the field of regenerative medicine, with a unique focus on the peripheral nerve repair market, which is estimated to be a $1 billion market opportunity.

    According to Levy, demand for AxoGen's product portfolio, led by its Avance product, the only commercially-available nerve allograft, has grown significantly over the last 12 months, and he forecasts the Company will deliver 60+% yr/yr sales growth in 2012. The key drivers behind this performance have been the publication of positive clinical data, greater clinician awareness of Avance's benefits, and an expansion of AxoGen's sales and marketing efforts.

    Levy also believes that AXGN's recent $20.8 million financing with PDL BioPharma (NASDAQ:PDLI) removes a significant overhang that now allows the company to focus its efforts toward growing the business.

    AXGN trades at a 2013 Enterprise Value (NYSE:EV)/Sales multiple of 2.3x, which is an approximately 40% discount to peers which include: Anika Therapeutics (NASDAQ:ANIK), Cytomedix (CMXI), Cardiac (CRDC), Cryolife (NYSE:CRY), BioMimetic , Cytori (NASDAQ:CYTX) and MiMedx (NASDAQ:MDXG). Levy believes that AXGN current share prices, "does not adequately reflect the growth potential of AXGN's product portfolio." His price target of $5.00 is based on applying the average peer group multiple of 3.5x EV on his 2013 AXGN sales estimate of $14.5 million.

    BioMimetic Therapeutics is a development-stage regenerative medicine company focused on the $1+ billion orthobiologics market. Its lead product candidate is Augment which is designed as an alternative to autograft in foot and ankle fusion surgery. The Company recently submitted an ammended PMA which Levy believes improves the Company's chances for receiving FDA approval.

    BMTI shares has been under pressure as a result of a January 2012, non-approval letter from the FDA for its Augment product. In July 2012, the Company submitted a PMA application, which according to Levy, addressed all of the information requested by the FDA. Additionally, the Company's patient study, which includes 13,000 patients appears to have allayed carcinogenic concerns with a protein used in Augment.

    Levy's $7.50 price target is risk-adjusted and reflects, "a 70% probability that our base case scenario (2H13 Augment approval) occurs and 30% probability for our bear case (2016)".

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: ANIK, AXGN, BMTI, DXTR, CRY, CYTX, EV, PDLI
Back To Cockrell Group's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • AxoGen, Inc. $AXGN CEO Karen Zaderej, expected to appear on FOX Business' "After the Bell" with Liz Claman today at 4PM ET
    May 4, 2015
  • Bacterin $XTNT CEO on "After the Bell" with Liz Claman at 4:20PM ET
    Nov 11, 2014
  • SUPN: 2013 Revenues Exceed Analyst Company's Expectations; Maintaining Positive Outlook $SUPN http://seekingalpha.com/a/18t9v
    Mar 16, 2014
More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.