Is Financing a Problem?
How will NBS finance the extensive studies that are pending?
• “In 2014, NeoStem plans to initiate a Phase 3 study for Melapuldencel-T with a primary endpoint of overall survival.” Cost estimated to be 25 million by management.
• “Completion of enrollment in Dr. Bluestone’s Phase 1 trial for type 1 diabetes trial using Treg cells.” Estimated cost 2 million.
• P2 study of Tregs for Type 1 diabetes. Cost to completion in 2015 estimated to be 20 – 25 million.
• P3 study of AMR-001 assuming P2 results are positive. Estimated cost 25 – 30 million to completion in late 2015 early 2016.
• Initiate a Phase 2 chronic heart failure trial in CD34 Cell Program. Estimated initial cost 5 million in 2014. Cost to completion 20 -25 million in late 2015, early 2016.
Estimates are mine except for P3 study for Melapuldencel-T. From the FY 13 report, “Overall, there were ~50% more active clients compared to 2012. Year-end cash balance was $46.1 million.
Operating expenses were $38.5 million compared to $32.8 million in 2012.”
NBS does not have enough cash to conduct all these studies without the help of a major partner unless management was suicidal. A secondary offering in the immediate future at these depressed prices makes little sense. Therefore, a partnership with a major pharmaceutical has become absolutely necessary and will likely be made in the near future.
The announcement of a partnership will lead inevitably to a rise in pps as would positive AMR-001 P2 results, and then assuming a secondary offering follows there could be sufficient funds to carry out remaining studies.
