Updating Cytori Therapeutics (CYTX)
Maintaining a BUY ranking as the stock appreciates each day – slowly – as market dynamics sputter, but
still validates that CYTX’s stock has held at a low valuation.
CYTX’s short ratio had increased from 7.3 at the end of May to 20.7 at the end of August which has declined post the triple witching of 9/17/10 to curently 6.3 when many shorts were covering (options and Warrants) to keep it under $5.00.
This BUY ranking implies a valuation of $7.97 based on Quarterly Basic & Diluted Weighted Average shares of 45.3M. The fair value is $5.86 which is discounted 10%. The close on 9/24/10 was listed at $5.08.
- In Q2/10, installed-base systems grew in the EU, Asia and US bringing cumulative revenue generating units worldwide to 122 achieving the highest level of quarterly consumable shipments to date at 392 including 304 consumable re-orders;
- PureGraft™ System received EU approval for fat grafting procedures. In addition to the 27 countries of the EU, the CE Mark is followed by 8 other countries facilitating additional registrations around the world;
- Expanded EU Celution(R) regulatory approval includes multiple medical indications and improves sales opportunities to hospitals. The PureGraft System offers a lower cost entry point for customers facilitating the sale of the Celution® System;
- Reported positive outcomes from 2 EU clinical trials in acute heart attacks and chronic heart disease based on the outcome from the APOLLO heart attack trial. Initiating a randomized, double-blind, placebo‐controlled EU heart attack approval trial named ADVANCE;
- IDE requires a new PMA study in the US: plans are on-track for soft tissue reconstruction with the exact scale, scope, design, timing being determined for Q3/4 in FY13;
- Launch of Celution® One System in early 2011 designed and manufactured in collaboration with Olympus Corporation with CE Mark application due in the Q3/10 with expanded indications for Celution® 800 anticipating an EU approval in early 2011;
- Q2/10 product revenue was $2.1M compared to Q1/10 revenue of $2.3M. The net loss for Q2/10 was $5.4M or ($0.12) per share, compared to Q1/10 net loss of $2.4M or ($0.06) per share;
- Received US Patent No. 7,771,716 (“716” patent) for Celution® System methods of treating musculoskeletal disorders such as spinal disc disease;
- Entered into a $20M secured loan facility (6/14/10) allaying the perception of dilution; these amounts will fund operations into FY12;
- GE Healthcare’s current distribution agreement was extended and modified: the term of this agreement has been extended through the end of 2011;
- It is important to note that CYTX has no involvement in human embryonic stem cell research;
- It is equally important that investors observe that Cytori’s stock price should not be tied to any federal ruling on embryonic stem cells, as CYTX focuses on therapeutic uses of autologous cells.
Cytori Therapeutics manufactures and sells products to the cosmetic and reconstructive surgery markets and develops treatments for cardiovascular disease. Its principal products include the Celution® System family of products, which processes patients’ cells at the bedside in real time, consisting of a central device, a related single-use consumable used for each patient procedure, proprietary enzymes and related instrumentation.
This review is available at: New Review, Cytori Therapeutics (CYTX)
