At this point, I would gladly accept a $5 pps and smile all the way to the bank but that's 50% as ludicrous as a $10 pps.
If news develops to drive it to five, I suspect it will have room to go beyond that.
Jason K was kind of negative during the 2nd Q CC, never heard him nasty to Hedrick before (if you would listen to what he said carefully),
I think Mark Marino's rationalization of the placebo effects may not be entire right. He tried to rationalize it based on thickening of skin in the more seriously ill patients, where the placebo effects were much less.
We forget that systemic sclerodemra is a progressive illness. The first signs are very much local and then it progresses and reaches the lungs and other organs (fibrosis - very much like bleomycin induced fibrosis). (I am very familiar with this bleomycin induced toxcity, as I was the project leader for this at Brsitol.)
As the above sickness progresses, placebo effects wane (this is the exact words from Dr. Kesten), while the therapeutic effects of cell therapy become more evident.
In France, more seriously ill patients enter the sclerodec I and II trials and this would make a big difference in the study outcomes.
STAR is not quite dead. CYTX should wait for another STAR readout in 72 weeks, before meeting with the FDA. In the 2nd Q CC, in response to a question of Joe, the end of the phase 3 meeting with the FDA is still far off.
CYTX should adopt the VCEL FDA strategy for their phase 2b CV trial. This VCEL trial, just like a lot of other cell therapeutic trials, is really borderline effective. The VCEL strategy goes for approval and continuing postmarketing monitoring and limited studies. STAR and the VCEL CV trial and a lot of other US stem cells trials are in the same boat. If this regulatory approach is not workable with the FDA, every stem cells r/d company has to go the MESOBLAST way by enrolling hundreds and hundreds of CV patients in their phase 3 trials (while a partner like Teva would drop out with only 20% into the study).
STAR is really the first CYTX study in which there is a hint of progressive statistical significance in efficacy among the diffuse cutaneous sclero patients, while we did not observe the same in the OA trial.
Just my thoughts.
PS The inclusion of localized sclero patients may be a rather innocent miscalculation to broaden the Habeo market into "secondary Raynaud's" or early scleroderma -which, I believe, is now dead. Obviously, it is mis interpretation or extrapolation of the sclerodec I data in more seriously ill patients (including 2 terminal patients), in which the first sign of treatment effectiveness is in the Raynaud's P.
I took Maxims downgrade to $5 a simple reflection of the 100% dilution to come. If you consider full execution of the units and the warrants converting it could be more than 100%. Let alone this deal buys very little time and more was will be needed next year. Otherwise, we know Maxim targets are where CYTX will NOT trade...LOL
I took Marino's comments as a expression of some OA failure theories that something was needed to hold the treatment in place for at least some amount of time and the thickening of the skin of more advanced patients did just that. Now, I certainly am reading more into what he actually said but that is what came to mind when I read his comments. Which to me in turn, kind of poo-poos the IV route. Thoughts ?
BTW, I think for the IV route to be effective they will need more than their "half a can of coke" of cell source material.
I am also curious why they still haven't disclosed additional information from the study yet ?
As far as the FDA, a VCEL route or what ever, the final path forward will cost plenty of additional cash. This is not a miracle solution as I once hoped and smaller changes need bigger trials, as you suggest, to tease out the desired results.
Maxim's $5 price target is a laughable joke. That represents a 15X increase from the current price and we know now that the only way to avoid massive dilution is with a bankruptcy filing. Unfortunately, a more realistic price target at this point is $.05.
The best treatment method for scleroderma may be copied from ovarian cancer and bladder cancer treatment: local plus parenteral dosing of drugs. In the case of ovarian cancer, debulking may often follow by belly bath and iv dosing of chemotherapeutic agents. In the case of bladder cancer, topical treatment plus iv dosing are often used. IV dosing would bring the drugs to the core of tumors. Local dosing has pharmacokinetic advantages over iv dosing (Bruce Chabner of NCI).
I believe local treatment of scleroderma cannot be entirely replaced by iv dosing. They go hand in hand, depending on the stage of the illness.
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WST - I loved your comment ''the only way to avoid massive dilution is with a bankruptcy filing''
This would definitely solve shareholder's predicament about their investment in CYTX. They could cease to be a shareholder, without having to struggle with the decision to sell one's shares at a massive loss, or stump up more cash in the preffered issue that's being organised. After 14 years of mendacity and water torture it would almost be a relief.
As an investor I can always diversify my portfolio by buying shares in a different company. Why did CYTX buy Azaya when it was self evident that they did not have the funding to complete the regenerative medicine objectives for the company, much less taking on obligations for a totally new treament/product division? This diversificaion smacks of management benefit rather than shareholder benefit.
Given that it appears that management will be asking US the shareholders to provide more funds with this preferred issue isn't it perhaps time for us to ask specific questions, prior to giving them any more capital?
The capital to be raised is clearly insufficient to fund the company for any meaningful length of time. Why should we give more cash? What do they expect to achieve with these funds that warrants our providing further funding? Why have they been unable to partner with anyone? In the past, vague promises to get our money, and then issue cheaper shares with more warrants to Maxim who short/front run is unacceptable. Has Maxim decided that at these levels there is no point in participating? Do they want to make sure that the pool of suckers is still there?.
Is the major obstacle to partnering the inability of the owner of the device to have differential pricing for what amounts to the same ouput/drug from the device for different conditions, - some serious, some not? Is it also a question of whether small adjusments to the output may invalidate the patent protection? Why the difficulty in partnering?. There are literally hundreds of clinicians conducting trials using ADRC all over the world. This is not occuring just by chance. The data is compelling (STAR data was very good and I believe that the additional clinical data will be positive/supportive)
I guess my questions to the company are: What have you been doing wrong, and what are you doing to correct it? What is it going to require in terms of funds to get to an FDA approval for scleroderma and what will it cost to acually launch it into the market?
There comes a point where potential is not enough. I want some forward looking statements which even if not true can at least be assessed. For me it is finally about the money, not about the promise of the technology.
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You ask many legitimate questions. One overwhelming factor regarding lack of partnerships should no longer be underestimated, one that I have mentioned many times... No company wants to partner with a company using autologous stem cell model.
Hedge, you are absolutely right in raising the issue of whether any statements they make are to be trused. On the basis of past experience probably not. However one cannot NOT pose the questions. Theoretically they are stewards of our capital and are obliged to provide answers to valid questions, particularly when they are asking us to stump up more cash. I feel that they should be on the record so that everyone can make a ''somewhat'' qualified decision.
An evasive or no reply speaks volumes.
WST, you state the following: One overwhelming factor regarding lack of partnerships should no longer be underestimated, one that I have mentioned many times... No company wants to partner with a company using autologous stem cell model.
This may well be true for a wide variety of reasons, I have more than alluded to a number of them in the past. However, within your statement there is nothing to indicate that autologous ADRC do not work. If this is so, and you are in agreement, then there is surely a case for this drug/device to be partnerable.
If true, the question then becomes what are the obstacles that presumably better capitalised and qualified companies (ie. potential partners) find so daunting that they choose to not proceed. There are no doubt quite a few. Perhaps this should be the basis for a new thread/subject discussion, paricularly as it affects the future likelihood of timing, and terms for a partnership deal.
CYTX made a number of misguided decisions in the past which in some cases were understandable. The lack of clarity from the FDA early on was a major constraint as was the lack of a focused businessman asking the hard questions before committing to projects that were ultimately ill advised, even if not necessarily scientific/medical failures. The scientists/doctors were enamoured with the technology, and they ran the company : they drank the Kool Aid, and so did I.
However, within your statement there is nothing to indicate that autologous ADRC do not work.
Well, that remains to be seen doesn't it? Could it be that the variability among donors makes efficacy hard to demonstrate in a statistically meaningful way? Maybe allogeneic is the way to go, not just for convenience but for efficacy. Does getting tested and standardized cells from young healthy donors make more sense? Of course, expandability then becomes an issue as Fas is sure to point out. Nothing has been proven yet other than Tigenix with fistula. I am still hopeful Atherys will succeed in stroke and their cells don't suffer from the scalability issues that MSCs find problematic. The jury is still out on all of this but Cytori has just taken one strike too many.