US Stem Cell Inc (USRM)

[TheHungryHippo]

USRM MYOCELL PHASE III & BIOTECH VALUATIONS

so there's a disagreement about the valuation of the companies in question.

USRM a Phase III Clinical Trials for Chronic Heart Failure Drug MYOCELL
also Phase II for COPD and Degenerative Disc Disease

and

ACTC now known as (OCATA) a Phase II Macular Degeneration Drug.

Lets look a little deeper... Lets go to seeking alpha for clarification in their article titled:

How To Value Advanced Cell Technology As A Phase II Company
Aug. 7, 2014 11:55 AM ET

http://seekingalpha.com/article/2395295-how-to-value-advanced-cell-technology-as-a-phase-ii-company

A broad method for quantifying share price in the event of a successful transition to Phase II is discussed.
The actual inputs to these calculations will depend almost entirely on the details presented in the publication of the company's Phase I results.



Advanced Cell Technology has estimated the worldwide TAM for macular degeneration at $25-30 billion.

(TAM = total addressable market) Worldwide 2016

Now Lets look at USRM's TAM

Chronic Heart Failure Treatment:
$18.6 billion

http://www.bccresearch.com/pressroom/phm/global-market-congestive-heart-failure-drugs-reach-$18.6-billion-2016

Degenerative Disc Disease

Spinal Surgery 9.3 Billion

http://www.strategyr.com/PressMCP-1821.asp

spinal and neurostimulation intervention products

$12.6 billion in 2016

https://www.giiresearch.com/report/bc409481-spinal-intervention-markets-surgical-replacement.html

COPD “Chronic Obstructive Pulmonary Disease (COPD)

in 2013 $11.3 billion, and is forecast to reach a value of $15.6 billion by 2019

so we will say 2016 is in the middle at

19.1 Billion for COPD...

ok Lets continue....back to seeking alpha..


Any larger Pharma company that might wish to purchase or partner with ACT (OCATA) would make calculations vaguely along these lines. The terms of any deal would depend almost entirely on the details of the publication of data from the Phase I trial

From What I could find out about ACTC prior to the Seeking alpha article.

ACTC (OCATA) APRIL 17, 2014

ACTC’s share price is currently sitting at .0628 per share and with nearly 2.5 billion shares outstanding, this gives the company a market cap of $174 million. As of December 2013, ACTC had $1.7 million in cash, total liabilities of $26.4 million, and an accumulated deficit of $313.8 million.

How did they supposedly come up with all that cash on hand you were talking about I have no idea where you got that from?
http://www.nanalyze.com/2014/04/some-problems-with-advanced-cell-technology/

So whether or not they had cash makes no difference.

Experts agree.. all that matters is "ENTIRELY UPON THE DETAILS OF PUBLICATION OF DATA"

Now the Motely Fool.

How to Value Clinical-Stage Biotech Stocks

https://www.fool.com/investing/2016/12/19/how-to-value-clinical-stage-biotech-stocks.aspx

Valuing biotech companies that lack an FDA- or EMA-approved product is a tricky endeavor, to put it mildly. So, to help shed some light on this complicated issue, we asked three of our healthcare contributors how they go about calculating a workable valuation metric for clinical-stage biotechnology companies. Here's what they had to say.

Estimating your chickens before they hatch
Kristine Harjes: In order to value a clinical-stage biotech, you must first attempt to value the company's pipeline. For simplicity's sake, let's consider a company that has one lead candidate in development. We can determine a reasonable expectation for this drug's sales by using the following formula:

Size of patient population * expected market share * price of drug = sales

Company's pipeline.. ok

Patient population for Macular Degeneration as in ACTC (OCATA) =

Affecting more than 150 million patients worldwide, AMD is associated with an accumulation of drusen (deposits of lipid and fatty proteins) under the retina, and patients with AMD experience blurred vision or blindness in the center of the visual field. There are two forms of AMD: "wet" and "dry." The wet form accounts for approximately 15 percent of AMD cases and is treated using therapies previously developed at Mass. Eye and Ear/Harvard Medical School. The "dry" form is more common, accounting for approximately 85 percent of cases, and effective therapies are currently lacking.

The projected number of people with age-related macular degeneration in 2020 is 196 million (95% CrI 140–261), increasing to 288 million in 2040 (205–399).

Ok so what I can see is approximately .. 85% of 150 MM =
127,500,000 million patients worldwide

with an expected market share of the total TAM of 25 Billion =
OCATA expected market share = ?????
__________________________________________________________________________________

Number of heart failure patients worldwide. 26 million

More than 17.5 million people die from cardiovascular disease (CVD) each year - making it the number one cause of death worldwide.

but there's a catch...



Degenerative Disc Disease

degenerative disc disease affects an estimated 8 million people in worldwide

http://hopestemcell.com/stem-cell-treatments/degenerative-disc-disease

COPD Lung Disease Patients WorldWide =
According to WHO estimates, 65 million people have moderate to severe chronic obstructive pulmonary disease (COPD) 3 Million die each year.

http://www.who.int/respiratory/copd/burden/en/

uh... NOBODY IS DYING FROM DRY AGE MACULAR DEGENERATION GUYS...

Expected market share has two components. Does the drug have competition? If so, how does it stack up against its competition? If it beat the standard of care in trials, it's safe to say it'll steal away a good bit of market share. However, if it hasn't been tested head-to-head, it might only garner a small share, as many doctors prefer to stick to prescribing a familiar drug.

Speaking of competing drugs on the market, this is just about the only way to estimate the price tag. If there isn't any other similar drug out there, your job just got a bit harder. This is likely the case with rare disease drugs, which almost always price in the low 6-figures.

Let's look at an example from Celldex Therapeutics (NASDAQ:CLDX). Its lead candidate, glembatumumab vedotin (glemba), is in a phase 2 study that could support an application for treatment of breast cancer patients with tumors that lack three important targets employed by existing treatments. Each year an estimated 170,000 women are diagnosed with "triple-negative" breast cancer, but it seems a large percentage have tumors that express glemba's target.

To illustrate adjusting clinical stage biotech assets for risk, we'll assume the drug's total annual patient population is around 50,000 patients at a list price of $100,000 each. Assuming the drug can capture the entire market, this gives us a peak annual sales estimate of $5 billion, which suggests Celldex Therapeutics' recent market cap of just $448 million is grossly undervalued.
___________________________________________________________________________

Now I am not going to go through and calculate the cost of drug and competition I wouldn't even know where to begin but you can clearly see that the VALUATION on USRM could EASILY blow right past the buyout valuation of ACTC and their DRY AGE MACULAR DEGENERATION therapy for blindness. Why? Because the cost of Healthcare is much Higher with USRM related therapies!

Doesn't even matter about HOW MUCH CASH USRM HAS. THE TRIALS ARE WHAT MATTERS!

THE DATA!

$USRM