In early 2010, the FDA shocked investors in Cytori by refusing to grant a 510K on the Celution 800 device. A 510K approval would have granted Cytori the right to market the Celution system to doctors and hospitals as a device capable of providing a clinical grade dose of stem and regenerative cells for use in the practice of medicine (for use in any application the doctors felt was appropriate). By Congressional Charter, the FDA does not have authority over the practice of medicine. So, why was it a shock that the FDA refused to grant Cytori’s Celution System a 510K? The reason was because the medical device produced stem cells that were highly effective and therefore was worried the cells would be used too widely. As a precaution, the FDA wanted to regulate the Celution System as a biologic rather than a medical device. Safety is the responsibility of the FDA and because these stem cells had been demonstrated to be highly effective, the FDA ruled that each application must be approved based on clinical trial data.
Fast forward to the present; Cytori is in an advanced stage of drug development trials with the FDA and with the European Medicines Agency. It is an advantage to the company and stockholders that the drug is regulated as a device instead of a biologic. That is a benefit in terms of time and investment dollars needed to gain approval. From here, I will discuss each trial, its timeline, and when the company should begin to receive revenues from the drug’s approval and insurance reimbursement.
Scleroderma: (United States)
On March 24th Cytori issued a press release announcing that the STAR Trial had reached its halfway point. All twenty trial sites are up and enrolling patients. Forty patients out of 80 patients have been enrolled to date with a trial completion date of mid-2016. Once the last patient is treated in ~ June that patient will undergo their 48-week evaluation in mid, 2017. Once all of the patients have been evaluated, the CRO (contract research organization) will compile the patient test results and work with Cytori management to prepare the data for submission to the FDA for approval. This submission to the FDA should occur in the 2nd half of 2017, probably September. The FDA may take 12 months to decide whether or not to approve the drug for human use in scleroderma. That would put approval in 2nd half of 2018. The spreadsheet forecasts $10 million in revenue for 2018 in the months of October to December treating 250 patients in that time frame. In my opinion, this is a very conservative timeline for the following reasons:
1) Normally, drug companies must go through a Phase I and a Phase II trial before getting a Phase III trial approved. Cytori has the benefit of regulation as a device therefore is required to perform a pilot safety trial and a pivotal approval trial. In this case, the FDA recognized a highly successful open label pilot trial in France (SCLERDEC I) and granted Cytori a fast track to approval by starting with a Phase III trial in the US. This is very rare.
2) The drug (ECCS-50) has been granted orphan status in the EU as well as qualified for SME status.
03/23/2016 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc . (NASDAQ: CYTX) announced today that the European Medicines Agency’s (EMA) Micro, Small and Medium-sized Enterprise (SME) office has granted SME status to Cytori Therapeutics. The newly granted SME status allows Cytori to participate in significant financial incentives, fee reductions, and fee waivers for selective EMA regulatory filings.
The primary aim of the SME initiative is to promote innovation and the development of new medicinal products by smaller companies. To achieve this, incentives are provided to help SMEs overcome the main financial and administrative hurdles associated with pre-marketing procedures, particularly scientific advice, and marketing authorization application and inspection procedures.
3) The FDA is working closely with their sister agency BARDA (both report up to Kathleen Sebelius, Head of the Department of Health and Human Resources) on a contract with Cytori to develop a quick response to a terrorist attack-involving thermal burns and radiation. In other words, the FDA is involved with the Celution System from a number of fronts and is encouraging its development.
4) Cytori is also involved in another Phase III scleroderma trial. The second one is called SCLEREDEC II and is enrolling in France. This trial will treat 40 patients and should be completed later this year. This is the follow on trial of the SCLEREDEC I trial that was used to convince the FDA to fast track the USA based STAR trial as well as gain orphan drug status in the EU.
02/22/2016 Data presented at 4th Systemic Sclerosis World Congress
SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) today reports new data demonstrating a single administration of Cytori Cell Therapy™ (ECCS-50) achieved a sustained improvement in hand dysfunction at two years in patients with scleroderma. Scleroderma is a rare autoimmune disease that results in hardening of tissue from a buildup of fibrotic tissue in the fingers, skin and other organs and tissues.
The trial findings were presented by trial co-principal investigator Dr. Guy Magalon on February 20, 2016 at the 4th Systemic Sclerosis World Congress in Lisbon, Portugal. In general, the data showed a sustained two year improvement in hand symptoms and function across multiple endpoints in patients with scleroderma following single administration of Cytori Cell Therapy™ (ECCS-50).
Major findings at 24 months following single administration of Cytori Cell Therapy™ (ECCS-50):
Raynaud’s Condition Score, a patient-reported measure of the severity and frequency of Raynaud’s Phenomenon, decreased by an average of 89% over baseline at two years (p<0.001).
Hand pain, as measured by the standard 100mm Visual Acuity Score, and the Scleroderma Health Assessment Questionnaire (SHAQ) score at two years both showed improvement of 50% over baseline (p=0.01 and p<0.001 respectively).
Improvement of 20 % in grip strength and 330% in pinch strength at two years (p=0.05 and p=0.004 respectively)
Continued reduction in the # of ulcers from 15 at baseline to 9 at one year and 6 at two years.
“Hand dysfunction in scleroderma is both disabling and hard to treat,” said Dr. Guy Magalon. “The standard treatments we rely on for these patients are often not effective or are poorly tolerated because of side effects. The broad efficacy signals along with a very favorable safety profile make ECCS-50 one of the more promising new therapeutic options for these difficult to treat patients.”
Given there are no effective treatments for Scleroderma of the hand, I cannot understand why the FDA would take the full 12 months to approve this much needed therapy. The spreadsheet shows the worst-case scenario. The best case would be approval in late 2017, which would pull forward 2019 revenue estimates of $105 million into 2018. Somewhere in the middle is the likely outcome.
Scleroderma: (European Union)
10/19/2015 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced that the first patient has been enrolled and treated in the SCLERADEC-II trial, a late phase, follow-on European clinical trial designed to determine the efficacy and safety of Cytori Cell Therapy™ in patients with hand dysfunction associated with scleroderma.
If the trial endpoint is successfully achieved, this trial may be used to seek European marketing approval of Cytori Cell Therapy for this indication, which has been designated by the European Commission as an orphan medicinal product for treatment of scleroderma.
As mentioned above, the SCLEREDEC II Trial is currently enrolling in France with full enrollment expected later this year. While this trial progresses through completion and then the approval process, there has been a major development that will provide significant revenues to Cytori starting in the 2nd quarter of 2016.
01/12/2016 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today that it has entered into an agreement with Idis Managed Access, part of the Clinigen Group plc, to establish a Managed Access Program (MAP) in select countries across Europe, the Middle East, and Africa for patients with impaired hand function due to scleroderma. A MAP will allow Cytori, upon completion of the statutory legal and regulatory requirements, to offer patients and their healthcare providers access to Cytori Cell TherapyTM, known as ECCS-50, in advance of the product’s full marketing authorization in their respective countries.
This program is estimated to generate revenue to Cytori of $1.6 million in 2016 as the program gets started. In 2017 revenues should jump to $12 million and reach $18 million in 2018 before the program winds down and is substituted by full EU approval and insurance reimbursement. Revenues to Cytori (net of any partnership sharing) from Scleroderma therapies in 2019 should reach nearly $47 million and in 2020 should be $125 million.
The scleroderma opportunity in Japan was discussed during the March 3rd conference call. The new regenerative medicine laws should make this therapy available and reimbursed in a relatively short period after a small trial in Japan. The number of scleroderma patients in Japan is estimated to be approximately 5,000 and there are very few treatment centers, perhaps between five and ten, making it fairly easy to access the entire market over time. Fifty patients are projected to receive treatment in 2018 followed by 375 and 750 in the next two years.
The Scleroderma cell therapy is the most advanced drug in Cytori’s pipeline. Regulatory approvals and reimbursement are expected in the United States between late 2017 and the fall of 2018. In the EU, full approvals are expected in early 2019, but substantial revenues may be generated through the compassionate use laws starting in the 2nd quarter of 2016. Japan may contribute to the scleroderma revenue starting in 2018. By 2020, Cytori will have worldwide revenues from scleroderma of $335 million with approximately 85% margins. Based on the efficacy of the cell therapy and the lack of any effective drugs, consultants have estimated reimbursements of $50,000 per patient in all regions of the world. My estimates use $40,000 in the U.S. and Japan and $25,000 in the EU. The 2020 revenue estimates are based on 8,750 patients being treated worldwide. The average of the estimates I have seen on the number of patients needing the Cytori Cell Therapy in the three regions discussed is 150,000. It is common to have a list of patients ready to treat upon approval.
Urinary Incontinence: (Japan)
Cytori’s Cell Therapy is involved in a third PHASE III trial in Japan to treat male stress urinary incontinence following radical prostatectomy. Personally, I have some doubts about the primary endpoint for the ADRESU trial. Unless the therapy stops leakage 100%, then the motivation for having the procedure is greatly diminished. I have been told the early treatments were purposely metered so as not to over-treat the sphincter and cause complete blockage. There is a balance between under treating and over treating. The revenue to Cytori for each patient is estimated at $25,000. Compared to another analyst’s estimate, my revenue assumptions are 95% lower at $30 million in 2020. This reflects my concerns about the learning curve for this procedure.
09/03/2015 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced that the first patient has been enrolled and treated in the ADRESU trial, a late phase, physician-initiated Japanese clinical trial to study the efficacy and safety of Cytori Cell Therapy™ in men with urinary incontinence after prostatic surgery for prostate cancer or benign prostatic hypertrophy.
ADRESU is a multicenter, 45 patient open label controlled trial of the ECCI-50 cellular therapeutic and is based on promising pilot trial data published in the International Journal of Urology in 2014. Details of the pilot trial can be found on clinicaltrials.gov and the MHLW website. The primary endpoint for the ADRESU trial will be the number of patients who experience reduction of urinary leakage volume (as measured by the weight of diaper pads used over 24 hours) 52 weeks after treatment. If the endpoint is successfully achieved, the data will be used to seek approval of Cytori Cell Therapy for this indication. Japan’s Ministry of Health, Labour and Welfare substantially support the trial costs, with additional support by Cytori. The trial is sponsored by Nagoya University.
BARDA: (Thermal Burns, U.S.)
There has not been a lot of recent news about the BARDA contract. It is progressing at a pace satisfactory to the BARDA Agency, but perhaps too slow for anxious stockholders. I understand Cytori should be prepared to apply to the FDA for an IDE (Investigational Device Exemption) to conduct a human trial starting sometime in 2017. Here is the most recent press release:
11/30/2015 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today the publication of preclinical data demonstrating that Cytori Cell Therapy can promote burn wound healing via topical spray delivery, achieving similar effects to local injection. The option for spray delivery expands the potential utility and offers greater ease of use for Cytori Cell Therapy in the burn setting. The study was performed with support from the Biomedical Advanced Research and Development Authority (BARDA), and is described in a paper entitled “ Adipose-Derived Regenerative Cell Therapy for Burn Wound Healing: A Comparison of Two Delivery Methods ” (Foubert P. et al. DOI: 10.1089/wound.2015.0672) now available online ( http://online.liebertpub.com/doi/abs/10.1089/wound.2015.0672).
“These data clearly show that topical spray delivery represents an effective solution to administer Cytori Cell Therapy and potentially optimize standard of care in fragile burn patients,” said Dr. Mayer Tenenhaus, a plastic surgeon from UCSD Burn Center.
The purpose of this study was to compare the effects of topical spray delivery and local injection of Cytori Cell Therapy in a porcine model of thermal burn. Importantly, the data demonstrated that administration by topical spray led to statistically significant improvement over control in epithelialization, blood vessel density, and inflammatory cell infiltration. Results with topical spray were equivalent to those with local injection suggesting that delivery via a spraying mechanism is a viable and favorable alternative to other, more cumbersome delivery routes.
This research, performed as part of a development collaboration with BARDA, is planned for inclusion in an Investigational Device Exemption (IDE) package to be submitted to FDA for a proposed clinical trial using Cytori Cell Therapy in thermal burn injury.
Results showed that delivery of Cytori Cell Therapy by topical spray or local injection of Cytori Cell Therapy increased wound epithelialization by about 21% over control at day 12 post-treatment (p<0.05). In addition, at day 7 post-treatment, digital analysis showed that micro vessel density was significantly greater in wounds receiving either topical spray or local injection of Cytori Cell Therapy compared to control treatment (1.5-fold. p<0.05). Finally, blinded histopathology and immunohistochemistry analyses showed that topical spray or local injections of Cytori Cell Therapy reduced neutrophil infiltration in burn wounds at day 7 post-treatment (p=0.05). The data are consistent with the cell therapy promoting angiogenesis, modulating inflammation and promoting wound repair.
The current standard of care of full-thickness burns requires early wound excision and application of autologous split-thickness skin grafts (STSG). For large injuries, STSG must be often widely meshed due to limited donor sites and are often associated with scarring and functional and cosmetic complications. Cytori Cell Therapy is potentially an attractive option to optimize skin graft healing and functional outcome. The results presented herein suggest that topical spray delivery or local injection of Cytori Cell Therapy may improve skin graft reepithelialization and healing outcome and support the use of Cytori Cell Therapy as an adjunct therapy to skin grafting in severe burn patients.
Since the BARDA contract was signed in September 2012, we have heard about the potential for BARDA to purchase the Celution System (CTX2) and forward deploy them throughout the country to be prepared for a terrorist event involving mass numbers of thermal burn victims. These devices would be deployed to burn wards and general hospitals and people would be trained in how to use them. The event that will likely trigger this purchase order is the FDA approval of the Celution system to treat scleroderma. At this point, the FDA has deemed the drug output to be safe for injection into humans.
My spreadsheet has this purchase listed throughout 2019 with revenues of $24 million in 2020 from the treatment of burn victims sent to these burn wards and hospital burn centers. The assumption here is that the results from the human trial conducted starting in 2017 and ending in 2018 will be robust enough to be considered the new standard of care for the severely burned. Historically, there have been approximately 40,000 people per year that get treated for severe burns. My spreadsheet estimates only 6,000 of the 40,000 will be treated with Cytori’s Cell Therapy and the revenue per patient is estimated at only $4,000 per patient.
Osteoarthritis: (United States)
Osteoarthritis has an enormous market potential for Cytori’s Cell Therapy. It is also becoming a crowded field as a number of stem cell companies are conducting FDA approved trials. In addition, just about every airline magazine has ads in them for clinics around the country treating patients with their version of stem cell therapies. The FDA has issued a number of warnings that these clinics are in violation of the FDA rules and their therapies need to follow the trial route that Cytori is following. This is probably the biggest advantage Cytori has in this field. We would all like to believe that the Celution System does, in fact, produce a far more potent dose of fresh ADRCS (adipose derived stem & regenerative cells) than any other method, faster and at a lower cost than competing technologies. The key to winning in this race is to be the first to get FDA approval and reimbursement from the insurance companies. The Holy Grail is to prove that our cell therapy actually regenerates damaged cartilage. If this can be proven by the ACT-OA trial, Cytori will have no problem attracting a partner and developing this multi-billion dollar per year market.
Below is the press release from the 24-week partial unblinding of the ACT-OA trial. The 48-week testing will include a MRI scan to determine if the single injection of ECCO-50 into the knee actually regenerated the cartilage. If the results are favorable and if the data is strong enough to attract a partner willing to pay the full cost of a 400+ patient PHASE III trial, Cytori will continue to pursue this therapy. If not, Cytori will drop this therapeutic. The press release was as uninspiring as any I have ever read. The stock dropped over 20% after this announcement. Follow up revealed the results were actually good. You decide! I have highlighted words that I wish had not been included.
Cytori Reports Interim Data on U.S. Phase II Osteoarthritis Trial 02/08/2016
Data suggest beneficial effect of ECCO-50 for knee osteoarthritis: full data set expected Q3 2016
SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today the top-line data as part of the pre-specified partial unblinding of 24 week follow up data from the company’s ACT-OA trial. The trial is a U.S. phase II randomized, double-blind, placebo controlled trial designed to evaluate the safety and feasibility at 48 weeks of a single intra-articular knee injection of the ECCO-50 cellular therapeutic in patients with chronic knee pain due to osteoarthritis.
“Key endpoints and trends observed thus far suggest that a beneficial effect may be attributable to a single intra-articular administration of ECCO-50 in patients with osteoarthritis of the knee,” said Dr. Marc H. Hedrick, President and CEO of Cytori Therapeutics. “The full 48 week data set is the next important milestone in this program. While we continue to move our clinical pipeline along, the company will remain intensely focused on bringing to market our lead therapeutic for scleroderma which is currently in phase III.”
The primary goal of the ACT-OA trial is to help determine: (1) safety and feasibility of ECCO-50 for osteoarthritis, (2) provide dosing guidance and (3) explore key trial endpoints useful for a phase III trial. As a proof of concept trial, ACT-OA was not sized or powered for statistical significance in any of the endpoints.
The purpose of the interim 24 week partial unblinding in this trial is to provide early data that will facilitate key regulatory and business development discussions and provide better understanding of the therapeutic mechanism of action that may impact other clinical programs.
The interim analysis pre-specifies the evaluation of a number of patient reported outcomes important in patients with osteoarthritis of the knee. A total of 94 patients were treated in the trial (30 received a low dose of ECCO-50 [20 million cells], 31 received a high dose of ECCO-50 [40 million cells] and 33 received placebo). Patients, providers and Cytori personnel remain blinded to individual patient treatment allocation and patient subgroup outcomes.
The interim top-line data show the following:
The randomization is relatively balanced among the three treatment groups: low dose, high dose and placebo.
Intra-articular application of a single dose of ECCO-50 appears to be safe and feasible in an outpatient day-surgery setting. No complications occurred related to the fat harvest, cell processing or cell delivery.
A significant placebo response was observed, similar to that demonstrated in other OA trials.
The pre-specified primary endpoint, pain on walking at 12 weeks, as measured by a single question from the Knee Injury and Osteoarthritis Outcome Score (KOOS) did not obtain statistical significance.
Key secondary endpoints include the total and sub-scores of the KOOS, patient assessment of knee pain, knee stability, osteoarthritis activity and osteoarthritis damage, use of as-needed pain medication, pain while walking 50 feet and health status as measured by the SF-36. Consistent trends were observed suggesting improvement in the cell treated group relative to the placebo group at the 12 and 24 week time periods for patient reported outcomes.
Both high dose and low dose of ECCO-50 performed similarly.
In the 3rd quarter, following full unblinding of the data, the Company will be able to more fully evaluate the data, including 48 week follow up, patient subset analyses, and the effect on knee cartilage as measured by magnetic resonance imaging results changes between baseline and 48 weeks.
In summary, patterns of response are suggestive of a beneficial effect attributable to a single intra-articular administration of ECCO-50 in patients with osteoarthritis of the knee. The full 48 week data are expected to be available for review during the third quarter of this year, which will more fully inform further development decisions, including phase III trial design, cell dose, administration protocol, inclusion/exclusion criteria, selection of primary and secondary endpoints and sample size. Further details of the trial can be found on clinicaltrials.gov (NCT02326961).
The spreadsheet does not contain any Research & Development expenses for the ACT-OA trial past 2016. For this application to continue, a suitable partner must be found. My spreadsheet does assume a successful conclusion to the ACT-OA trial and a partnership gets formed.
Other Revenue Sources and Therapies Currently in Clinical Trials:
Rather than me expand upon each trial going on around the world, it is easier for me to copy and paste a few paragraphs from Cytori press releases and point you to web sites if you wish to do further reading about certain therapies.
Inflammatory Bowel Disease/Crohn’s/Fistulas
10/22/2015 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today the publication of the results of a pilot clinical trial of Cytori Cell Therapy™ for the treatment of recalcitrant enterocutaneous fistula in patients with inflammatory bowel disease. This single center, single arm exploratory study enrolled six patients with fistulas that had failed to heal following conventional therapy including antibiotics, drainage, irrigation and ileostomy. Four patients had fistula associated with Ulcerative Colitis (one following surgery for rectal cancer) and two patients had fistula secondary to Crohn’s Disease. All patients received a single treatment with the adipose derived cellular therapeutic injected into the peri-fistular region and into the fistula tract. Patients received a total dose of between approximately 1x107 and 1.4x108 adipose cells. Patients were followed for fistula closure and epithelialization at 4, 12, and 24 weeks after treatment.
A fistula closure rate of 83% (5 of 6 patients) was observed within four weeks after treatment. A fistula closure rate of 100% (all six patients treated) was observed at 24 weeks after treatment. A single patient had a recurrent fistula 10 months after the initial procedure related to a relapse in the primary disease.
A fistula is an abnormal tunnel linking the interior of the stomach or intestines to the skin such that the contents of the intestines leak through. They are associated with substantial pain, risk of infection, and reduced quality of life. Fistulas of this kind are both more common and more difficult to treat in patients with inflammatory bowel diseases such as Crohn’s Disease and Ulcerative Colitis. Fistulas occur in 20-40% of patients with Crohn’s Disease with approximately 90% of these requiring surgical interventions. More than 20% of patients do not achieve complete healing and recurrence is common, occurring in 20-35% of cases. The Crohn’s and Colitis Foundation of America estimates that as many as 1.6 million Americans are affected by inflammatory bowel disease. It has been estimated that the incidence of rectoanal fistula in the USA is 68,000-96,000 cases per year.
01/19/2016 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today enrollment of the first two patients in an investigator-initiated clinical trial of Cytori Cell Therapy™ for the treatment of the orphan indication, fistula-in-ano associated with Crohn’s Disease.
This 10 patient open label trial is being performed by Professor Jean-Charles Grimaud and colleagues at the Hôpital Nord, Marseille, France under the authority of the Agence Nationale de Sécurité du Médicament (ANSM), the French equivalent of the US Food and Drug Administration (FDA). As with the SCLERADEC I trial of Cytori Cell Therapy performed by a different group in Marseille, this trial is being executed in an indication that has been recognized as orphan by both the European Medicines Agency and the US FDA.
“This trial continues and expands the use of Cytori Cell Therapy in strategic niche indications such as orphan diseases. When coupled with the previously published trial data in fistula repair from Japan and the United Kingdom this trial could provide the basis for a follow-on sponsored clinical trial as part of a formal clinical development program,” said Dr. Steven Kesten, Chief Medical Officer at Cytori.
02/03/2016 SAN DIEGO --(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) announced today the publication of the results of an investigator initiated Phase I clinical trial using Cytori Cell Therapy™ for the treatment of erectile dysfunction (ED) following radical prostatectomy (RP).
The open-label, single-arm study was conducted in Denmark and enrolled 17 patients who had undergone radical prostatectomy within 5-18 months prior to the study. To qualify for the study, patients were required to have not regained erectile function following surgery despite appropriate pharmacological intervention. All patients received a single intracavernous injection of Cytori Cell Therapy. There were no serious adverse effects reported at six months follow-up, and eight of the 17 patients recovered erectile function within three months of treatment. In the publication, the authors concluded their “…ﬁndings suggest that autologous, freshly isolated ADRCs are safe to use and possess potential efficacy in the treatment of ED after RP.”
A post-hoc analysis was performed in which patients were divided into those who were continent prior to treatment (11 patients) and those who were incontinent (6 patients). Of the 11 in the continent group, 8 (73%) recovered erectile function, which remained improved at 6 months. None of the incontinent patients recovered function.
The international index of erectile function-5 score (IIEF) for continent men improved from 7 (baseline) to 17 units at 6 months (p=0.007). The erection hardness score (EHS) improved from 1 (baseline) to 3 units at 6 months (p=0.03). The IIEF and EHS did not improve in the incontinent group.
Dr. Martha Haahr , the lead investigator, stated, "We are very pleased with the results from our Phase 1 study. In this open-label trial, we saw a very good effect on erectile function. It is remarkable, especially as these men had previously seen no effect from traditional medical treatment and continue to have good erectile function after 6 months follow-up. This suggests the possibility of therapeutic options for patients suffering from erectile dysfunction from other causes. We are already planning a double-blind randomized follow-up study.”
07/31/2013 SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics (NASDAQ: CYTX) has entered into a $15 million three-part agreement with Bimini Technologies and its affiliates, Puregraft Technologies and Kerastem Technologies. First, Cytori has sold global manufacturing and commercialization rights for the Puregraft® product line. In exchange, Cytori has received a $5 million upfront payment and will receive up to an additional $10 million from commercial milestones related to future Puregraft® sales. In addition, Bimini has acquired global, exclusive rights to commercialize the Celution® System for Alopecia (Hair Field). Under the commercial agreement, Bimini will be responsible for all clinical studies, regulatory approvals and market development activities for Alopecia and will pay Cytori perpetual royalties on sales.
“Our vision is to develop a leading company in the expanding cash-pay aesthetics market,” reported Bradford Conlan , CEO of Bimini. “Puregraft® represents a best-in-class solution that addresses the emerging fat grafting market. Expanding into the Alopecia market adds depth and innovation to our portfolio and increases potential utilization of Puregraft® as an integrated component with Celution® in the hair growth procedure.
70 Patient Phase II Trial to Begin Enrollment This Year
SAN DIEGO--(BUSINESS WIRE)-- Cytori Therapeutics, Inc. (NASDAQ: CYTX) today announced that Kerastem Technologies, a wholly owned subsidiary of Bimini Technologies, received U.S. Food and Drug Administration (FDA) conditional Investigational Device Exemption (IDE) approval to conduct a clinical trial studying the safety and feasibility of its technology for the treatment of female and early male pattern baldness (androgenic alopecia).
The phase II study, known as the STYLE trial, follows initial clinical work in Europe and Japan. This clinical experience served as a basis for the FDA IDE submission. The data will be presented in September at the 2015 International Society of Hair Restoration Surgery meeting in Chicago. STYLE is a 70 patient controlled trial that is expected to begin enrollment in late 2015 at up to eight (8) centers within the United States. The primary endpoint is safety and tolerability of the treatment and secondary endpoints include change in hair growth and density.
In 2013, Bimini, a private medical technology company, acquired global and exclusive rights to commercialize Cytori Celution® Technology for alopecia and hair related indications. Under the commercial agreement, Bimini will be responsible for all key activities including clinical studies, regulatory approvals, and market development. Bimini will acquire Cytori products at agreed upon transfer pricing and pay Cytori a perpetual royalty on sales.
For more information on the STYLE trial, visit www.kerastem.com or https://clinicaltrials.gov/ct2/show/NCT02503852?term=Kerastem&rank=1
Through my research, I have discovered that the STYLE Trial is running ahead of schedule. I encourage you to visit this web site and see photographs of a few treated patients. The therapy does not work on all patients because there are several main causes of baldness. If you live on planet Earth, you are aware of the size of the private pay market to treat alopecia! Kerastem currently has two clinics operating outside the United States with a third opening soon. Based on logical financial expectations for a return on investment and the progress on the STYLE trial, I have plugged in revenues from Bimini into my spreadsheet. I suspect that if my assumptions are wrong, they will be too conservative.
An unbiased summary must avoid a look into the distant past. The subtitle of this paper is The Next Four Years. During the March 3rd conference call, Marc Hedrick’s opening remarks included his assessment of the progress made in 2015. From his prospective, the company is in the best position it has ever been in regarding its late stage trials in scleroderma, SUI, OA as well as IBD, ED, BARDA and a number of other acronyms. The company is on the cusp of real revenue gains prior to regulatory approvals and a break-even path to 2018. From the perspective of the long-term stockholders, 2015 was the worst year on record as the stock lost almost all of its value and closed the year at $.19 per share. Stock option awards granted on Jan 4, 2016 were in multiples of historical grants as shareholder returns were not part of the 2015 goals and objectives. Our expectations for the future growth of this company and its technology should be very high.
I have spent some time comparing the valuations given to small biotech stocks in roughly the same stage of drug development that Cytori finds itself. It is clear that until Cytori produces solid Phase II and III data, the investment community will not value a stem cell company as a drug company. In my opinion, this stance has created an incredible investment opportunity. I do believe the attached spreadsheet is fairly accurate and that there will be a catalyst or two that changes the perception of value. The earnings potential of these stem cell therapies go well into the billions in future years and as this trajectory becomes believable, the stock should trade at a PE ratio equal to its growth rate. That would put the stock price in a range of $25 to $75 in 2019 or 2020 (not adjusted for a reverse split).
Important: some of the comments in this write-up relate to a spreadsheet with the "four years financial future of Cytori" spelled out for you in detail- by clicking the following link, a spread sheet will open up with its "gory" details- Spreadsheet Link