DD Education: Which Cell Therapy companies present the best value? Part 2

We developed an analysis using public filings and annualizing the most recent quarters as of 12/31/11. As such, the accuracy is subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

We conclude that ex leaders Dendreon and MesoBlast make the space very inexpensive. The sample below represents just over $500 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials. Recent data peaks from the Cardiology space suggests that Baxter (BAX) and their CD34 cell type may be very viable. NeoStem has a very similar approach. The retrenchment in MesoBlast shares since that company presented data at AHA in November is of concern. Cytori, Aastrom, Athersys all have active programs in cardiology while Athersys lead program is partnered with Pfizer for Ulcerative Colitis and Aastrom is entering a Phase 3 trial in CLI.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash: (enterprise value). In all fairness here, we know that NeoStem with $20-$30 million in value from their China generic company, could be the cheapest name and others are / will raise capital but ex China, Athersys is the “cheapest name”.

Looking at R&D spending: IMUC, Prima and NeoStem are among the most efficient but in fairness one must adjust for the fact that Aastrom is embarking on a pivotal trial versus Prima just starting their P3 and NeoStem their P2.

Revenues: Here we have excluded NeoStem’s $65 million from China which means PCT (Cell Therapy CMO) is running at close to $10 million in annual revenues (currently).

Which Cell Therapy companies present the best value?

In the wake of a robust season of financings, and low valuations we revisit the basic questions in the cell therapy space, updating our tables for year end reported financials. Our numbers are forward looking and subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

Dendreon and MesoBlast remain the market leaders, but the best values by far are in the micro-cap space with names like Aastrom and PluriStem funded with strong balance sheets.

The sample below represents just over $875 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks: 

By Price ($), Osiris , MesoBlast and Dendreon are the highest $ price:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash (enterprise value):

Looking at R&D spend gives us an idea of who is spending what on clinical programs:

Prima BioMed files for NASDAQ listing (ASX: PRR)

Just a quick heads up that Australian biotech company Prima BioMed (ASX: PRR) has filed for a NASDAQ listing of American Depositary Receipts (ADR). Once the listing is complete the company will have a dual listings of its securities on both the Australian Securities Exchange (ASX) and NASDAQ. Every one ADR will represent 30 common shares, so Prima at $0.17 cents would trade at $5.10 and a market cap of >$160 mln.

Prima’s proposed NASDAQ listing will be a Level II ADR compliance listing, and is being managed by Bank of New York Mellon and US broking houses Deutsche Bank AG, Noble Financial and Aegis. Prima did say that they are currently unable to say precisely when the shares will actually list and trade but we expect it will be soon.

Here the big question: Is this a blessing or a Curse ?

Prima is listing on the NASDAQ for better exposure and most importantly access to U.S. capital markets. The company is now beginning a Phase III trial in ovarian cancer using a dendritic cell based vaccine (in the U.S., Progenitor Cell Therapy (NeoStem-NBS) is doing the manufacturing, recall that PCT did the clinical work for Dendreon's Provenge and is also working for Coronado (CNDO) and Immunocellular (IMUC). If anyone can make sure that the "manufacturing goes off with-out a hitch” its PCT-NBS. 

So the next big question, is does it work ? Ovarian is a very tough indication and the life expectancy of Ovarian cancer varies a great deal. Prima's Phase II data was not double blinded cross-over so the results are not definitive. No way to say what the results of the current global PIII trial will be yet. We do know Prima will likely need to raise capital at some point ahead (thus the U.S. listing).

Perhaps the most important event that investors will watch will be not Prima at all, but Merck KG who is running the StimuVax trial which like Prima's product (C-Vac) targets the MUC-1 antigen (over-expressed in ovarian cancer).

If StimuVax works, Prima could rock, if not, it could flop as it validates one way or another the MUC-1 antigen as a target.

Let’s watch Prima and see how the company does as they work to build a U.S. institutional presence and present their data to the scrutiny of US investors.