The Daily Dialogue, Wednesday, 5/4/11
Long/Short Equity, Special Situations, Contrarian
Seeking Alpha Analyst Since 2009
What drove the regenerative medicine – stem cell market today …
The 6 W’s: The … who, what, where, when, why and what of it.
US equities remained on the defensive on Wednesday, with the S&P finishing down for a 3rd straight session. The recent pickup in concerns that the economic recovery may be stalling remained a drag on sentiment, particularly with the weaker-than-expected service sector data out today. Emerging market tightening concerns also remained a headwind, with the focus shifting from India back to China, where the Shanghai Composite fell 2.3%, its biggest decline in 2 months. Once again, the deeper cyclical pockets of the market with outsized leverage to the global risk/recovery trade were among the worst performers, while the higher-beta small-caps also continued to struggle. Defensive sectors largely outperformed, while a number of domestic play also fared well, with some support chalked up to the pullback in commodity complex. Earnings takeaways seemed fairly mixed and continued to skew much more company-specific in nature than the first couple of weeks of Q1 earnings season, though a continued ramp in M&A activity and dividend and buyback increase announcements may have helped to contain some of the more macro-leaning damage today.
Regenerative medicine/stem cell universe stocks were down since the day started on Wednesday (5/4/11). The NASDAQ dropped -13.39 (-0.47%) to 2828.23. The Dow closed down -83.93 (-0.66%) to 12,723.58. On Wednesday, depreciation ruled the day …
Highlights:
Cytori’s Therapeutics (CYTX) StemSource® Cell Bank to be installed in Hong Kong. CYTX will install a comprehensive StemSource® Cell Bank in Hong Kong upon Neo Derm’s current use of its Celution® System; the bank installation will be the 1st adipose cell and tissue bank in Hong Kong. NeoDerm is the leading provider of medical aesthetic products and services with 18 treatment centers located in Hong Kong and Shanghai, among others, with approximately 900 employees. The StemSource® Cell Bank includes a StemSource® processing system along with all other equipment, software, database and protocols required to cryopreserve patients’ own ADRCs for future use in aesthetic procedures. Cell and tissue banking not only facilitates patient capture for the clinic but also provides economic and process efficiencies that makes these procedures practical for both the doctor and patient. The bottom line, with both adipose-derived stem and regenerative cell (ADRC) and tissue banking capabilities, the initial focus of the bank will be on the potential of aesthetic medicine. As part of NeoDerm’s network of aesthetic centers, the bank will help fulfill demand for cell-enriched aesthetic procedures. The establishment of this bank with NeoDerm furthers CYTX’s belief that the banking model represents the future for aesthetic medicine practices. CYTX’s earnings are tomorrow!
The California Institute for Regenerative Medicine (CIRM) may reach a milestone of sorts Wednesday when its governing board will vote on whether to fund a clinical trial involving a therapy derived from stem cells. It would be a first for CIRM, which was created with the passage of Proposition 71 to invest $3B in stem cell research over 10 years. The clinical trial grant under consideration Wednesday would provide almost $25M to probably Geron (GERN) that is developing a spinal cord injury treatment derived from human embryonic stem cells. The bottom line, according patients with paralysis from spinal cord injuries will receive increasing doses of stem-cell-derived oligodendrocyte progenitor cells, which can help stimulate growth of nerve cells after injury and also produce myelin, insulation that helps electrical signals travel through nerve cells. The trial is the first to test a therapy made using human embryonic stem cells.
Cephalon (CEPH) to pay Teva Pharmaceutical Industries (TEVA) $275M if deal cancelled as stated in a notice to the US SEC if CEPH cancels its acquisition by Teva, it will pay a fine of 4% of the $6.8B deal or $275M. The bottom line, according to the joint presentation by the 2 companies following the acquisition announcement, Teva will still have more than $1B in cash after closing the deal. It also said that its balance sheet has “sufficient liquidity for future strategic opportunities.” Why do I care, the Mesoblast stem cell partnership still reflects the potential of our regenerative medicine universe’s future!
Valuation:
Advancing companies (2):
- Advanced Cell Technology (OTC: ACTC) up $0.003 (1.78%) to $0.195; and
- Opexa (OPXA) up $0.04 (2.20%) to $1.81.
Trading down companies (15):
- Aastrom (ASTM) down -$0.01 (-0.36%) to $2.74;
- Athersys (ATHX) down -$0.02 (-0.69%) to $2.89;
- BioMimetic (BMTI) down -$0.22 (-1.68%) to $12.90;
- BioTime (AMEX: BTX) down -$0.25 (-3.68%) to $6.54;
- Cytori (CYTX) down -$0.13 (-1.84%) to $6.94;
- Geron (GERN) down -$0.03 (-0.62%) to $4.82;
- ImmunoCellar Therapeutics (OTCPK:IMUC) down -$0.03 (-1.50%) to $1.97;
- International Stem Cell (OTCQB:ISCO) down – $0.02 (-1.82%) to $1.08;
- NeoStem (AMEX: NBS) down -$0.10 (-5.56%) at $1.70;
- Neuralstem (AMEX:CUR) down -$0.05 (-3.18%) to $1.52;
- Osiris (OSIR) down -$ 0.09 (-1.34%) to $6.62;
- Pluristem (PSTI) down – $0.06 (-2.24%) to $2.62;
- ReNeuron Group (RENE.L) down -$0.08 (1.50%) to $5.25;
- StemCells (STEM) down -$0.06 (-6.87%) to $0.814; and
- Tengion (TNGN) down -$0.03 (-1.15%) to $2.58.
Flat (3):
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