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I remember that you (or maybe another poster?) wanted to see Cryoport adding a bunch of phase 1 trials. I would rather see more phase 2 and 3 trials that are closer to commercialization, and have larger patient populations at multiple locations, since they present a much higher revenue potential for Cryoport. I think the increase in the number trials is one reason for the revenue beat last quarter, but going forward, commercial revenues will far outpace this.
Generally, phase 1 trials are testing for safety, and (since they don’t want to kill a bunch of people) they are only tested on a very small number (handful) of patients. Although a majority (~65%) are successful and move on to phase 2, less than 10% make it to approval. One reason for the small number of phase 1 trials that Cryoport supports is that many are conducted at a single site that doesn’t require Cryoport’s services. I looked at this last year and discovered Cryoport was landing a majority of new phase 1 trials, but yes, Fisher Bio and World Courier are probably the biggest competition in this area. This clinical trial breakdown doesn’t really bother me. What is encouraging to me is that nearly 60% of phase 3 trials make it to approval, and Cryoport’s phase 3 trials continue to grow. If that percentage holds true, Cryoport is looking at close to 20 near-term approvals.
Historically, only about 30% of phase 2 trials make it to approval. but with the new RMAT guidelines, I think that percentage will go up significantly. Remember, the FDA approved Kymriah based on the results of the phase 2 ELIANA trial for B-cell ALL, and recently for DLBCL based on the phase 2 JULIET trial. And Yescarta was approved based on the phase 1/2 ZUMA-1 trials.
Wow, over 400k shares traded Friday and over 150k so far today; looks like the tutes are back. Just read the conference call transcripts and a few things stood out to me. First, they are already lowering their estimate from 5 to 7 to 5 or 6 additional BLA or EMA filings in 2018. Overall, it is encouraging that the industry is headed for tremendous growth and Cryoport is embedded with so many key companies, but it will probably take a couple years for these to produce meaningful revenue for Cryoport. Once again, I’m disappointed by some of the lame questions asked by the analysts. Paul Knight asking what the patient population is for the second indication of Kymriah? C’mon man, do your homework! And WILL SOMEONE PLEASE ASK what happened to the outsourcing contract with Bristol Myers for the handling of Yervoy or Opdivo? They were supposedly in the final process of on-boarding over 6 months ago!
I was shocked that management actually stated the commercial revenues from Gilead and Novartis. It sounds like the contracts are tiered and based on a transport and service component. My estimate was fairly close (off by 100k), and now analysts may be able to estimate these revenues a little more accurately. At this level of production, I think it is roughly $2500 per patient, but it may take another quarter or two to confirm. This was the relevant question:
Paul Knight (Janney)
Okay and what was the revenue in the fourth quarter for these two therapeutics indications.
Jerrell Shelton
I think, we studied in the earlier on it was about, Robert, is it 318,000.
Robert Stefanovich
For the previous quarter, it was 100,000 just as they commenced towards the end of the year and then for Q1, it was 318,000.
At least the big question was asked by Jason Seidl about the rumored meeting with Jefferies and the need for another capital raise. It is also interesting that just 2 months ago, Shelton was saying they have enough cash for the year but now is only saying “we don’t have any immediate plans today for a capital raise.” Was it just me, or did anyone else think Shelton’s answer was a little strange?
Jason Seidl (Cowen)
Okay, perfect. And I think, you sort of alluded to it before, but it seems like at least on a balance sheet perspective, you guys are pretty comfortable with your cash position. No need to raise from your fund. I just want to know, if you wanted to comment on that because there had been at times your stocks moved around and we heard rumors in the market because people talking [indiscernible] cash, so I am just curious of your official statement on your balance sheet is.
Jerrell Shelton
I mean, I think, some of those rumors in the market came as a result of what I mentioned and at the end of my comments where we do – we are in the market building out our relationships in the marketplace with institutional investors and others because a lot of folks simply haven’t heard of us and we run into them every day. We are not a large company. We haven’t been around all that long and a lot of people haven’t heard of us. So we do spend time. So there is rumors got started, they were, obviously they didn’t come true and we don’t anticipate them coming true. We are at comfortable cash position right now fortunately and so we don’t have any plans immediately to raise capital on any basis right now other than there will be some warrants that will come in over this year because they will expire and so we will get some money from that. But some investment from that but we don’t have any plans for today for a capital raise.
You just said that because I predicted you’d be disappointed again! Haha. Maybe I lowered your expectations enough. I was pleasantly surprised with the numbers this quarter. I was expecting about 10% growth quarter over quarter growth and it was double that. I was estimating 16 new trials added, but instead there was 22! I was also estimating only about 200k again for commercial revenues and I think it was higher. Gilead has been impressive. Novartis even had a couple month head start; in the middle of January, Novartis had 19 medical centers open for Kymriah and Gilead had 14 for Yescarta. By the end of the quarter, Novartis only added 17 to reach 36, while Gilead added 26 and was up to 40. I think Novartis may catch up a little this next quarter now that Kymriah’s label was expanded.
I haven’t listened to the conference call yet, but I’m interested to hear why you’re not complaining again.
Gilead reported decent numbers on Yescarta yesterday. This is what they had to say on the conference call:
. . . We are seeing an increase in patient enrollment, as clinical experience with Yescarta steadily grows and additional authorized cancer centers with expanded geographic reach come online. We have now completed the authorization of 40 cancer centers and are on track to have enough centers certified to treat 80% of Yescarta-eligible patients in the United States by the middle of the year . . .
And finally, sales of Yescarta were $40 million in the first full quarter since approval in October. As John mentioned earlier, we are making great progress in training and certifying additional centers. In terms of access in the U.S., we are seeing the payer mix play out as expected, with approximately two-thirds of Yescarta patients covered by commercial and fee-for-service plans and approximately one-quarter of patients covered by Medicare. There is broad coverage of Yescarta-eligible patients with commercial insurance. It's encouraging to see the strong execution by our commercial, medical affairs and manufacturing teams, the positive feedback from centers, and the growing awareness of Yescarta in the hematology and patient communities.
Interesting article - Blockchain: The Next Big Trend in BioPharma?
This is the future and I sincerely hope Cryoport is working on it . . .
https://www.contractpharma.com/contents/view_online-exclusives/2018-04-13/blockchain-the-next-big-trend-in-biopharma/
Accenture Life Sciences' Carly L. Guenther shares her thoughts on the future of blockchain in supply chain management
Betsy Louda, Associate Editor 04.13.18
With the constantly changing climate of supply chain demands and technology within the pharmaceutical industry, companies are on the hunt for the next new trend that will expedite the serialization process.
According to Accenture Life Sciences, verifying where a medicine’s ingredients were made, where the drug was manufactured, and how it was handled all the way to the patient in a trusted manner, is becoming an increasingly mandatory supply chain management capability.
Blockchain technology is a new tool that is able to connect those dots. It allows a network of branches throughout the process to maintain a shared log of information without the risk of tampering. It also eliminates the need for complete trust between the different pathways. This is possible by using a timestamp tracked system to the ensure accuracy of recorded events in the drug’s life. This type of seamless information sharing aims to make communication about the medicine’s history much easier to access from inception to delivery.
Contract Pharma spoke with Carly L. Guenther, managing director at Accenture Life Sciences, about the basics of blockchain technology, and how it will impact the future of pharmaceutical supply chain management.
Contract Pharma: Can you give a brief overview on what blockchain technology is?
Carly L. Guenther: Blockchain is protected by cryptography, which allows a network of nodes to collectively maintain a shared ledger of information without the need for complete trust between the nodes. Blockchain is essentially a time-sequenced chain of events based on an agreed upon consensus mechanism. The mechanism guarantees that, as long as much of the network validates the entries (i.e., the “blocks”) posted to the ledger (i.e., the “chain) as per stated governance rules, information stored on the blockchain can be trusted as reliable. Investors and enterprises across multiple industries and functions have taken notice of blockchain’s potential. Recently, investment and spending on blockchain-based technology have each topped more than $1 billion, and both continue to accelerate. Accenture’s current projections for the blockchain services market alone estimates a CAGR of more than 60 percent, hitting close to $7 billion by 2021. Within life sciences, blockchain technology could provide a $3 billion opportunity by 2025.
CP: Can you elaborate on the opportunity you feel that blockchain could provide in the life sciences industry as a whole?
CG: Blockchain has applicability across all supply chain functions. However, it can particularly address certain unique aspects of the life sciences industry, such as:
* Provenance: Blockchain technology is an ideal solution, given that no single organization is responsible for provenance. Organizations across the life sciences ecosystem benefit from having authentic product in the supply chain, ensuring brand integrity and improving patient outcomes. Blockchain enables the idea of a “digital passport” for a product, containing all relevant information for each component or ingredient, including instructions and patient adherence information from the packaging;
* Serialization Track and Trace: Like provenance, one of the major challenges with track and trace is the effective exchange of data across the ecosystem of partners from the pharmaceutical manufacturers, to wholesale distributors, to dispensers. With the use of blockchain, supply chain partners can more effectively and securely share data across the supply chain and, eventually, with the end patient; and
* Specialty Logistics: In one aspect of the life sciences supply chain, pressure is mounting on pharmas to optimize their cold chain logistics. When applied to the cold chain, blockchain combined with technologies like Industrial Internet of Things can create secure documentation of storage temperatures at every point in a product’s journey. This enables supply chain managers and executives to identify potential temperature excursions and other efficiencies across the end-to-end supply chain.
CP: What is the biggest challenge of serialization that blockchain can alleviate?
CG: While significant investment has gone into serialization capabilities over the past decade, life sciences companies are restricted by traditional technology limitations where information is captured in a database, transmitted to another database (owned by a separate internal or external partner) and then reconciled. Blockchain is becoming increasingly relevant to address the perennial challenges of trust and speed in the life sciences supply chain. Enabling data-driven business decisions in forecasting the flow of goods and having visibility into the origin of materials and inputs has always been difficult, partly due to the technologies involved and partly because suppliers are mistrustful about sharing data they fear will be abused by downstream customers. This can negatively impact their ability to price products effectively.
CP: What are the different ways that blockchain technology can be leveraged, and what are benefits to each?
CG: What if innovations in the life sciences supply chain kept up with those in medicines and treatments? In one example, patients with acute lymphoblastic leukemia are now benefiting from a type of immunotherapy called chimeric antigen receptor T-cell therapy. The approach, pioneered by Memorial Sloan Kettering Cancer Center, involves the extracting immune cells from a patient, modifying them with cancer targeting proteins and giving them back to the patient. These cells are “living drugs” in the patient’s body, with autologous therapies tailored to each patient.
There are several benefits of blockchain technology for life sciences, including:
* Immutability/indisputability: Single source of truth, replicated across all nodes; data on the ledger is encrypted, pervasive and persistent;
* Automation: Network self-validates all ledger entries; smart contracts automatically enforce business rules; near real-time data and transaction processing;
* Cost reduction: Reduction in operational costs related to exceptions and reconciliation;
* Auditability: Provides a real-time track-and-trace audit trail; improves business, operational and regulatory reporting;
* Decentralization: Assets are tied and controlled by their owners rather than institutional custodians; exchange of information with pre-agreed consensus validation instead of third-party; and
* Security: Encryption provides record-level security of data; no single point of failure—network is resilient against attacks on individual nodes.
CP: For companies adapting the technology, what would that process be like?
CG: There are several types of blockchains that can drive value for the life sciences supply chain, depending on the need and types of permissions among those sharing information. Different types of blockchains include:
* Public, permissionless blockchains allow access to any user at any time. Ledger management is facilitated by the distributed network (e.g., Bitcoin, Ethereum);
* Federated, persmissioned blockchains (single or multi-industry) allow access to users based on the rules defined by the group of entities (consortium) participating in the network. Ledger management is facilitated by the consortium (e.g., Ripple, R3, Corda); and
* Private, permissioned blockchains allow access to users based on the permissions set by the private network. Ledger management is facilitated by single company for private use (e.g., Chain, Bankchain).
CP: Any predictions for the future of blockchain in the sciences industry?
CG: Innovative therapy challenges such as the chimeric antigen receptor T-cell therapy I mentioned earlier and other macro life sciences influences are driving a shift in products coming to market, specifically within oncology, central nervous system and systemic anti-infectives. These types of therapies challenge the traditional life sciences supply chain, increasing the need for secure and authenticated drugs that are delivered without delay and kept at a verifiable temperature. The right treatment needs to be delivered to the right patient at the right time, all through a secure supply chain.
Investors and enterprises across multiple industries and functions have taken notice of blockchain’s potential. Within the next three years, Accenture predicts 30 percent of life sciences companies plan to utilize blockchain (if they aren’t already), opening new business opportunities and addressing challenges. Supply chain applications of blockchain are endless for life sciences, given the requirements for specialized medicines and therapies. Organizations that start now—who are willing to experiment, fail fast and innovate based on that experience—will achieve competitive advantage and improve patient outcomes.
Unfortunately, Cryoport’s Investor Relations is about as forthcoming as their management. When asked previously to clarify rumors regarding management’s meeting with Deutsche Bank, their comment was that the company meets with numerous investment banks for various reasons, but could not comment specifically about the rumored meeting.
CN, it’s always been a long road, and a 2019/2020 story in my view. You’ve been disappointed with the numbers for each of the 3 quarters I’ve been here, and I predict this will continue on May 3rd.
Kite didn’t really have a commercial department and got a late start getting their medical centers up and running and laying the groundwork for insurance coverage last year. We have the reports that CMS and a few private insurers are just getting on board now, but insurers are still requiring preauthorization, so it will take a bit more time to work this out. Gilled won’t report Q1 earnings until May 5th, but I’m expecting little revenue from them this quarter.
Novartis just reported their Q1 earnings last week and had this to say with regard to Kymriah:
Kymriah produced $12 million in sales in the first quarter ($475k price = ~25 patients). (analyst’s are forecasting ~$160M for the year)
DLBCL remains on track for U.S. approval in Q2 of this year
and one question from an analyst:
Emmanuel Papadakis (Barclays)
. . . And the second quick question, if you could answer is just bit more color on Kymriah. I will tell you they have helpful sales figures you said the majority lives are now covered maybe you could talk a bit about patient centers trajectory you expect for the rest of this year? Thanks very much.
Elizabeth Doherty
Yeah, sure. Love to give a little bit more color on that. As we've talked about before, their revenue in Q1 was actually in line with our expectations. We have been focused on exactly what you're talking about expanding the sites, we now have 35 sites up and running. Just keep in mind the new therapy is the new therapy for us it's also new therapy for the hospitals and centers. So, we spent a lot of time making sure that the experience that they're having is a positive one and that we are getting the logistics down properly. And we feel very good about where we are in preparation for the DLBCL hope for anticipation of expansion soon. So, I think we saw the reimbursement, we have not had any issues as reimbursement that's going very smoothly. The sites are up and running, we feel very good about that and in anticipation again of the expansion of the label soon. So, I think so far so good, yes, we expect that we'll see the trajectory improve over time. But again, keeping in mind, not only with ALL but also with DLBCL outlook starts to launch that these patients need to be referred to the centers. And so, I think you'll see a continuous improvement quarter-over-quarter. But you will see it, it will take time for these centers to get up and running and used to use in this new therapy.
You’re joking right? You mean like the last couple raises?
This is Shelton’s comments to investors on the conference call on March 6th:
Jerrell Shelton
Well, we will approach the financing as we go along. We have enough cash now to fulfill our plan for this year. So that's not on the table and we'll look at things as we move along, but we have nothing planned at this time.
Then literally 2 weeks later they are planning to meet with investment bankers? This could simply be about upcoming Investor Conferences; there are a couple in June, both in NY and MA. http://www.jefferies.com/OurFirm/ConferenceList/Investment-Conferences/159
Or perhaps certain unforeseen events occurred recently with one of their customers that necessitates additional capital. (right Laser?)
Cryoport management was supposed to meet with Jefferies last month on March 22nd and 23rd, which exactly coincides with the current downtrend.
https://thefly.com/landingPageNews.php?id=2703226&headline=CYRX-Cryoport-management-to-meet-with-Jefferies
FYI - Cryoport management to meet with Jefferies
Meetings to be held in New York on April 18 and in Boston on April 19 hosted by Jefferies.
https://thefly.com/landingPageNews.php?id=2714095&headline=CYRX-Cryoport-management-to-meet-with-Jefferies
Yeah rob, I know the Dendreon story. And you’re welcome. Good to know that you can pull that stick out long enough to allow a chuckle.
At least you can admit that I'm right rob. That must have been very difficult for you.
Cold please stop selling, you're crashing the stock! Don't burn any bridges on the way out.-you may want to come back. Your sleuthing will be missed. Best wishes.
I’m not surprised that you fundamentally disagree rob. To date, DC based vaccines have had limited success (Provenge) and have had numerous trial failures (Immunocellular, Celdex, Argos, etc.), so that statement I made goes against the “conventional wisdom” to which you subscribe. I’ll try to keep this short for you.
I said dendritic cells will be the next big thing because one of Cryoport’s customers presented clinical trial data evaluating autologous dendritic cells at last years ASCO that shows patients are living longer than expected and the trial appears to have a long, fat tail. They are likely to be presenting updated data shortly that may change the “conventional wisdom.”
This share grab and dilution under the 2015 and 2018 Omnibus Equity Incentive Plan is outrageous, and isn't justified. Their reason appears to be “well all of our peers are doing it.”
Per the 14a:
If the 2018 Plan is approved, the total shares of common stock subject to outstanding awards as of December 31, 2017 (5,322,858 shares), plus the total number of shares available for future awards under the 2015 Plan as of December 31, 2017 (1,293,784), which would be available for issuance under the 2018 Plan, and the proposed shares available for issuance under the 2018 Plan (3,730,179 shares), represent a total fully-diluted overhang of 10,346,821 shares (27.6%) under the 2018 Plan.
BTW - nice to see you coming out of the shadows to post. As Nikki Haley says - I’m locked and loaded! GLTY
OK. Just curious. I don’t want to get into OT discussion but I wasn’t sure if you were saying one day all drugs will be replaced with biologics or targeted delivery, or saying alternate delivery methods like topical, patch, or inhalation will one day replace oral medications to treat a simple headache for example, or just more specifically about precision medicine replacing traditional drugs by preventing genetic disease. The statement seemed a bit far-fetched depending on what you were saying. Anyway, good job in bringing it back to CYRX.
Thanks mike - Haha gasworld . . . that seems appropriate.
After seeing that photo, I’m reminded of the impression that I get every time I see a photo of their “logistic center.” It’s always of a couple guys standing around doing a little manual work on a dewar. It really does not leave me with an impression of a high tech, state-of-the-art facility buzzing with activity. I remember during a conference call, an analyst asked about this process and if it will be automated for efficiency and Shelton deftly sidestepped it.
I see a day when oral medications are a thing of the past.
Yes it’s good to see Shelton and a few directors holding the stock instead of immediately dumping it, but the scale is rather underwhelming especially in relation to total holdings. If he exercised hundreds of thousands of options, and sat on the stock, then I would say that is a bullish sign. And again, it’s nice to see the performance-based bonus program, but the whole idea of Boards and compensation committees appointed by management determining said management’s bonuses and compensation is a bit of a farce in my opinion. But that’s only a small part of their compensation and they are now requesting shareholder approval for the 2018 “incentive” plan which would “compensate” them almost 4 million shares!! And yes, it’s at $10 a share, but that’s going to look cheap in a couple years, and it’s over 10% of the current shares!! I am really tired of these excessively greedy share grabs at shareholder expense and usually vote no, but they are always routinely approved anyway. But to your point, yes I would agree that it’s mildly bullish that management and the board appear to think the share price will be higher at some point this year, but really, who doesn’t think this if they are looking at another 5-7 client approvals.
Regarding recent filings and IGNORING LITTLE THINGS THAT ACTUALLY HAVE A POTENTIALLY BIG IMPACT: Did anyone notice this other little nugget from the 14a?
PROPOSAL 4 — TO AMEND THE COMPANY’S AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY’S COMMON STOCK FROM 50,000,000 SHARES TO 100,000,000 SHARES.
Reason for the Amendment
We are currently authorized to issue 50,000,000 shares of common stock with a par value of $0.001 per share. As of March 22, 2018, we had 27,486,606 shares of common stock issued and outstanding and stock options, warrants to purchase up to an additional 10,463,970 shares of our common stock issued and outstanding, and 1,269,821 shares available for issuance under the 2015 Plan. Additionally, we are also requesting approval of the 2018 Plan, pursuant to which we would be authorized to issue equity awards that may result in the issuance of an additional 3,730,179 shares of common stock.
Other than the possible need to issue shares upon the exercise of options and warrants, pursuant to our 2015 Plan and pursuant to our 2018 Plan, if approved by the stockholders, we have no definitive plans or arrangements to issue any additional shares of common stock.
More generally, the increase in the authorized number of shares of common stock will enable us to engage in (i) possible future public or private equity financings, and (ii) such other corporate purposes as the Board determines in its discretion. These corporate purposes may include future stock splits, stock dividends or other distributions, future financings, acquisitions and stock options and other equity benefits under possible new benefit plans.
After the increase in the authorized number of shares of common stock, there will be available for issuance 57,049,424 shares of our common stock after giving effect to 27,486,606 shares of common stock outstanding, 10,463,970 shares reserved for the possible exercise of outstanding options and warrants, 1,269,821 shares available for issuance under the 2015 Plan (which will become available for issuance under the 2018 Plan, if approved) and 3,730,179 shares reserved for our 2018 Plan, if approved by the stockholders. The par value of our common stock will remain $0.001 share. The relative rights and limitations of the shares of common stock would remain unchanged under the Articles Amendment.
The flexibility of our Board to issue additional shares of common stock could also enhance our ability to negotiate on behalf of our stockholders in a takeover situation and have an anti-takeover effect. The authorized but unissued shares of common stock could be used by our Board to discourage, delay or make more difficult a change in the control of our company. For example, such shares could be privately placed with purchasers who might align themselves with our Board in opposing a hostile takeover bid. The issuance of additional shares could serve to dilute the stock ownership of persons seeking to obtain control and thereby increase the cost of acquiring a given percentage of our outstanding stock. Stockholders should therefore be aware that approval of this proposal could facilitate future efforts by our Board to deter or prevent changes in control of our company, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices. The increase in our authorized common stock, however, is not being proposed in response to any effort of which we are aware to accumulate shares of our common stock or to obtain control of our Company. The availability of additional shares of common stock is particularly important in the event that our Board needs to undertake any of the foregoing actions on an expedited basis and therefore needs to avoid the time (and expense) of seeking stockholder approval in connection with the contemplated action.
Okay, first of all, they say that there would only be ~7 million authorized shares available for future equity financings or other purposes, but actually they would still have over 10 million shares available if it wasn’t for management’s attempt to award themselves 4 million shares through their proposed 2018 option plan. This filing states that there are no definitive plans to issue shares and Shelton told investors last month that they have enough cash for this year. But why take it off the table? If they were PROACTIVE and OPPORTUNISTIC and wanted to take advantage of their stock price this year, how many shares would they need to issue if they did it near the highs (mid-teens?) when these approvals are announced? But instead, it appears their plan is to wait until next year when the overall market conditions potentially may not be as favorable and more shares would be necessary.
In addition, the reasons stated are questionable. Other than equity financings, does anyone actually think that there will be stock splits, stock dividends or distributions before the next shareholder meeting? And the idea that the Board needs the flexibility to “enhance their ability to negotiate in a takeover situation and have an anti-takeover effect” is ridiculous. They already have a number of anti-takeover provisions and the Board already has the ability to issue up to 2,500,000 shares of “blank check” preferred stock, without action by stockholders.
I’m really not sure that I want to give this management team the flexibility to potentially mismanage more shares. Perhaps they need a little more accountability.
New article on SOS today - H2R must be on vacation already.
https://smithonstocks.com/cryoport-gilead-update-on-yescarta-strongly-supports-my-view-that-cryoport-has-explosive-sales-growth-an-important-upward-inflection-is-approaching-cyrx-8-75-buy/
AACR Annual Meeting April 14th-18th 2018
Northwest Bio is listed as an exhibitor here:
http://www.aacr.org/Documents/Exhibitor%20List%20as%20of%20March%202.pdf
and they have a (good size) booth across from Juno (and not near the bathrooms)
https://aacr18.mapyourshow.com/7_0/floorplan/index.cfm?st=booth&hallID=S&sv=northwest%20biotherapeutics&selectedBooth=booth~3239
but I don’t see an abstract for Northwest Bio this year. Has anyone else looked?
http://www.aacr.org/Meetings/Pages/MeetingDetail.aspx?EventItemID=136&DetailItemID=708#.WraR8WXw_Vo
Sorry if this has been discussed
it was quadruple witching today
Your guess is as good as any . . .
I was curious to see what you came up with Rev, but I think you are just spinning your wheels. We’re already in March so even if they were approved tomorrow, they probably wouldn’t contribute anything until the 4th quarter, and even that would be minimal. The revenues will depend on patient populations and services required, but the companies will face some of the same hurdles that Gilead and Novartis encountered, which will likely cause a slow ramp into 2019.
Most of the revenue last year was from biopharma clinical trials, and this should continue this year as well. Management confirmed that growth in the clinical trials continues to be strong and commercial revenues will not contribute the majority of growth this year. Commercial revenues from Gilead, Novartis, and the BP global cold chain logistics support will begin to contribute, some this quarter, but increasingly more towards the end of the year. Predicting THESE revenues seems more relevant to me at this point.
I’m guessing that the transition of the handling of the global biologics manufacturing projects for Big Pharma still has not been completed yet or Jerry would have mentioned something about it in his remarks last week, so I’m not modeling any revenue from this source for at least the first quarter.
We also have the information from Gilead last month that 28 centers are now certified, and by the middle of the year they will have enough centers certified to treat 80% of all eligible patients (which they estimate to be ~7,500). We also have a survey from the doctors at these centers who estimate that they will treat about 3 patients per month this year, but they have the capacity to treat 10 per month You can take it from there, and I have seen a wide range of estimates. If only 28 centers are used, that would be 84 patients treated each month x 12 months is about 1,000 patients. When I first attempted to calculate the revenue that these $8-$10 million contracts represent, I thought it was about $10k per patient because the patient population for the first Novartis indication was around 800. But then they announced the Kite contract was the same $8-10M for a patient population 10x larger, which would only be $1k per patient.
I look at the clinical trials, animal health and reproductive as the base-line revenue, which grew about 50% overall last year. . If this continues at this rate, that alone would be $18M for 2018. If it only grows at 40% then it would be $16.8M, and if it increases to 60% it would be $19.2M. To be conservative,I think it will be at the lower end of this range - say $17M. Then the question is: how much will commercial revenue add to this baseline? I’m being conservative and currently estimating only about $2M for the year, for total revenues in 2018 of $19M. I have lowered this estimate twice; from $23M to $21M after last quarter’s conference call and then from $21M to $19M after this last call. Right now my model shows these quarterly estimates for 2018: Q1 3.52 Q2 4.31 Q3 5.23 Q4 5.9 = 18.96. This represents my conservative estimate, and I have run a range of scenarios and hope to revise this estimate upward as we get further updates throughout the year
Interestingly, Larry Smith is estimating 18.73M for 2018 with commercial revenues from Gilead/Novartis of 1.6M and Big Pharma cold chain of 200k. I thought he was being overly conservative, but so far he has been pretty accurate
Options have traded on CYRX for as long as I've been invested but they are very illiquid.
Nice work Rev - thanks. Yes the cash position is solid for now, but predicting 30 months of cash based on past burn probably won’t hold up - especially if they sign another 5-7 clients this year.
By far this is the best call with the most information for the public on CryoPort performance and details.
Cold, I didn’t read the conversation that got deleted but I would agree that it is ridiculous to attempt to value Cryoport at this point based on some sales or revenue metric. The value is in it’s intellectual property, dominant position in the industry and clients. I think it IS impossible to duplicate and this will become more clear when they announce contracts with the next wave of 5-7 client approvals, and the moat continues to grow. There is only one way in, and Cryoport holds the keys, which is why I say it’s inevitable. . .
Yes the NOL’s (which are ~100M) would be attractive, but there may be limits for an acquiring company in the event of a buyout. (I recall getting burned on a case study competition in college) Did you happen to notice when they begin to expire? Hint: 2019. Hmmmm
BTW - What did Rob say that he felt the need to self moderate?
Just read over the transcript. Obviously the headline numbers were in line with my expectations - I was off by 100k. I’m actually surprised the price held up as well as it did yesterday. Maybe the additional institutional ownership has helped. I also may have underestimated the significance of the article in Wired. While WE didn’t learn anything new, the article reached an entirely new audience than all of the previous industry articles, and may have generated renewed interest. The volume has picked up since it was released, but that may just be coincidence.
I’m not sure if anyone else here understood the significance of the new RMAT guidelines for Cryoport when it was released by the FDA on November 16th. CYRX share price was ~$6.50 and that day it began a run to ~$9 within a month with one small pullback for two days. A couple of other companies I own have tripled and doubled since that day. Obviously the news of Increasing the estimated BLA /EMA filings Cryoport will support this year from 2-4 to 5-7 is huge! IF this actually happens, I think we will see the inflection point and the sharks begin to circle. This may be another reason the share price held up.
All that management would say about the commercial launches of Yescarta and Kymriah was that they’re seeing acceleration. Thanks guys.
No analysts asked about the Big Pharma outsourcing cold chain logistical support contracts management was crowing about a year ago. Not sure what to make of their silence about them now. As a reminder this is what Jerry had to say about them at the last conference call:
“Cryoport has been successful in landing a large pharma support project, supporting the global biologics manufacturing. Although the transition of these types of projects has been complex and slower than anticipated they are approaching completion on the contractual and quality related aspects before onboarding to be finalized. Once fully converted, these will ramp throughout the next fiscal year. Cryoport anticipate additional program adds in this space in the coming quarters as the market awareness in this space develops.”
The McKesson partnership was of interest but once again little information was given. Here is the exchange from the Q&A:
Jason Seidl (Cowen)
Fair enough. Then McKesson collaboration that seems fairly exciting there, huge name, seems like it enables you to go sort of up and downstream, could you talk a little bit more about that and what that's going to let you do and not this year but maybe say over the next three years?
Jerrell Shelton
We're very pleased with the McKesson agreement and I'm going to turn it to Mark because he helped engineer that to large extent.
Mark Sawicki
Yes. So we've really been focused on building a network, and a network that that helps us provide broader and deeper coverage throughout the regenerative therapy space, and in fact, we just had a two-day workshop last week where we had over 120 folks come in from clients, perspective clients to partners, and not only McKesson supported that event but it was also co-sponsored by GE, Fisher Bio, and Be The Match, from a support standpoint.
So those are -- there's a core strategy for us which is to be able to leverage our competencies in support of organizations such as McKesson moving forward, because we believe that we can provide a tremendous amount of value to those organizations, but it also provides a lot more value to our core client base, both through clinical development as well as commercial launch.
It will be interesting to see if this strategic partnership is exclusive, or if they do a similar collaboration with Cardinal. That may be telling.
Also Interesting that a couple individual investors got to ask a few questions. Was it anyone from the board? I thought this was a good one and it seems they took the capital raise issue off the table for a while. The slow commercial ramp has probably helped in this areas as well.
Nathan Cusick
Okay, cool and then with the current my fleet expansion do you guys in both European convergence and East Coast center do you expect your cash on hand to be sufficient for this are you looking for possibly like debt markets are possible secondary offerings to deal with this construction and further build-out.
Jerrell Shelton
Well, we will approach the financing as we go along. We have enough cash now to fulfill our plan for this year. So that's not on the table and we'll look at things as we move along, but we have nothing planned at this time.
I also liked Jerry's closing statement:
"For any newcomer to the market it would be incredibly difficult to overcome our advanced stake and to gain meaningful market share. We have made the barriers to entry into our market for potential competitors high and across the board almost impossible to overcome. Our demonstrable track record rose daily and our reputation for reliability and safety is unapproachable."
Cold, you were the first person I thought of when I read the McKesson news and thought you would appreciate the implications. I agree that a buyout is inevitable and you have named some of the same companies I have thought of (including AMZN - Bezos would recognize CYRX’s value). I think there are several other potential suiters, Amerisourcebergen (now that the WBA deal fell through) and GE to name a couple, and others that are still unnamed. The new corporate tax laws will likely encourage more M&A than we have seen in recent years, but I think the timing and price are related, so I’m hoping it doesn’t occur this year. I know that many here have held this investment far too long and are anxious to move on, but I think that Shelton understands how undervalued the company is right now and the unique position it is in to dominate the industry, and is not in a hurry to make a deal until more value is realized.
OK Rev I’ll bite. Yes, I think it will go over $10 again, but NOT in the near-term due to meeting or exceeding 4th quarter earnings expectations. I think It would really have to be a blowout quarter FAR exceeding expectations, and more importantly, it would require management to provide REVENUE GUIDANCE that far exceeds expectations, which in my opinion (and based on recent history), is highly unlikely. I expect a decent quarter because of the clinical trials added in the 2nd quarter (1 quarter lag). My model shows 3.43M for Q4. The greatest unknown is the commercial revenues from Novartis and Gilead, but my expectation now is on the low end (200K).
I think management was very optimistic on the Q1 2017 conference call and led investors (and apparently some investment bankers) to believe that a large number of commercial contracts were signed and more would continue throughout the year, with these commercial revenues ramping by the end of the year and early this year. My personal optimism for this investment is based not only on the cryogenic cell therapy business which all the analysts are modeling, but rather the potentially much larger cold-chain business Cryoport is expanding into, (and analysts aren’t modeling yet) and management has been unfortunately very quiet about. My expectations are lowered in the near term but still very positive long term, and I think the share price will see new highs this year when more BLA’s are approved, commercial contracts are announced, and commercial revenues begin ramping in the second half of the year. Having said that, my longterm outlook for the stock market overall is not positive and I think companies like Cryoport that are not really trading on fundamentals will suffer, so I’m hopeful that revenues will begin to ramp and management will provide some clarity on the commercial contracts.
it doesn’t show up on my first page unless I click on a post. Anyway, I guess I was really asking why no one was talking about the first real news in a long time. Granted, the news release is a little vague as usual but it seems fairly significant to me. Oh well, wake me up in a week for the conference call. Maybe we will hear more about it, or get a long-overdue update on other partnerships.
Why hasn't anyone posted this news on the "new partnership?" It's posted on their Twitter feed and that seems to be where everyone gets their DD.
Is this phase 1?
https://www.businesswire.com/news/home/20180226005239/en/McKesson-Specialty-Health-Cryoport-Collaborate-Bolster-Logistics
McKesson Specialty Health and Cryoport Collaborate to Bolster Logistics Services to Support Commercialization of Cell and Gene Therapies
Industry-Leading Cold-Chain Logistics Collaboration Enhances McKesson’s End-to-End Medication Access and Patient Support Capabilities
February 26, 2018 09:00 AM Eastern Standard Time
THE WOODLANDS, Texas & IRVINE, Calif.--(BUSINESS WIRE)--McKesson Specialty Health, a division of McKesson Corporation, announced a strategic collaboration with Cryoport, Inc. (NASDAQ: CYRX, CYRXW) designed to further strengthen its robust logistics services to support the delivery of cell and gene therapies to patients at the point of care. Adding Cryoport’s integrated cold-chain capabilities and real-time monitoring, the McKesson and Cryoport collaboration will provide an end-to-end solution for complex products which require high-touch patient access and adherence support as well as temperature-controlled product transportation.
“Cryoport is the premier provider of cold-chain logistics solutions to the life sciences industry, and we are pleased to work with them to enhance our ability to deliver critical time- and temperature-sensitive medications with short shelf lives to patients at the right time and place”
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Cryoport, the world's leading cold-chain logistics company serving the life sciences industry, will provide its cold-chain logistics solutions for temperature-sensitive biologic materials, such as immunotherapies, stem cells, CAR-T cells, biologics and reproductive cells. Cryoport's suite of unique cold-chain logistics solutions include its Cryoport Express® shippers, SmartPak II™ Condition Monitoring System, Cryoportal™ Logistics Management Platform and 24/7/365 logistics support. These unparalleled capabilities enable users to monitor their shipments and track the conditions, location and courier handling of their biological commodities in transit around the clock and to deploy intervention capability to mitigate any potential logistics risks.
“Cryoport is the premier provider of cold-chain logistics solutions to the life sciences industry, and we are pleased to work with them to enhance our ability to deliver critical time- and temperature-sensitive medications with short shelf lives to patients at the right time and place,” said Layne Martin, vice president, Supply Chain Services, McKesson Specialty Health.
Chief Commercial Officer of Cryoport Mark Sawicki, PhD, commented, “We are very pleased to have the opportunity to further extend and amplify our cold-chain logistics expertise with McKesson’s end-to-end patient access and support services focused on helping patients avoid delays in treatment through accelerated patient on-boarding, prior authorizations, end-user training and comprehensive adherence and educational support programs.”
McKesson and Cryoport, along with Fisher BioServices and GE Healthcare, are hosting a workshop titled, “Process Considerations for Cryogenic and Regenerative Medicine Commercialization.” The complimentary two-day workshop will provide a forum for industry experts to present and discuss current technological advancements in cryogenic management, regulatory requirements and best practices for processes in the support of regenerative medicine commercialization. The event will take place February 28-March 1 at the Marconi Automotive Museum in Tustin, California.
About McKesson Specialty Health
McKesson Specialty Health, a division of McKesson Corporation, works together with stakeholders across the healthcare delivery system to preserve and strengthen specialty care, passionately driven by the benefits it provides patients and the system as a whole. Through innovative provider, practice management, biopharma and payer solutions, McKesson Specialty Health focuses on improving the financial, operational and business health of our customers and partners so they may provide the best care to patients. At McKesson Specialty Health, we believe that we are all in this together. For more information, visit www.mckessonspecialtyhealth.com.
About Cryoport, Inc.
Cryoport is the life sciences industry's most trusted global provider of temperature-controlled logistics solutions for temperature-sensitive life sciences commodities, serving the biopharmaceutical market with leading-edge logistics solutions for biologic materials, such as regenerative medicine, including immunotherapies, stem cells and CAR-T cells. Cryoport's solutions are used by points-of-care, CROs, central laboratories, pharmaceutical companies, manufacturers, university researchers, et al; as well as the reproductive medicine market, primarily in IVF and surrogacy; and the animal health market, primarily in the areas of vaccines and reproduction. Cryoport's proprietary Cryoport Express® Shippers, Cryoportal™ Logistics Management Platform, leading-edge SmartPak II™ Condition Monitoring System and geo-sensing technology, paired with unparalleled cold-chain logistics expertise and 24/7 client support, make Cryoport the end-to-end cold-chain logistics partner that the industry trusts. For more information, visit www.cryoport.com. Sign up to follow @cryoport on Twitter at www.twitter.com/cryoport.
How is this non-dilutive? According to the filings:
“As of December 15, 2017, the Company had 26,405,707 shares of common stock outstanding. In connection with the Offer, 1,590,797 Original Warrants were properly tendered by holders of Original Warrants in exchange for 1,590,797 New Warrants, which were immediately exercised for gross proceeds to the Company of approximately $4.8 million.”
26,405,707 +1,590,797 = 27,996,504 Isn’t that about 6% dilution?
Happy New Year Everyone. Wow I've been away for almost 2 months and didn't miss a thing!
FYI - That may be the last one on Seeking Alpha, but Grant Zeng has been writing reports on Northwest Bio on Zacks Small Cap Research since his initiation report in 2011. The last one was written a year ago (01/05/17) here:
http://s1.q4cdn.com/460208960/files/News/2017/January-5-2016_NWBO_Zeng.pdf
Others can be found here under Northwest Bio and clicking on the +
http://scr.zacks.com/Coverage/Biotech-Grant-Zeng-CFA/default.aspx
So let me get this right. With all of your DD, you understand the real value of CYRX, and the analysts and investment community with their DD, are oblivious?
Cold, Cryoport isn’t even on the radar of the larger institutions, and likely won’t be for another year or two, so yeah you probably do know more about the company. You can hang your hat on that. If the smaller institutions don’t have the whole story, it’s because management isn’t sharing it, and that is the problem. Maybe the institutions you were talking to at that time were clueless, but they were performing the industry and company diligence that retail investors couldn’t possibly do, and that was my point. I did an internship at Prudential Securities in college and saw the caliber of people institutions hire, and the quality and quantity of research and analysis they perform, and was just passing that along.
I didn’t say that institutions are fairly valuing CYRX. Institutions have one motivation; and that is to make a profit. They will perform a valuation analysis, and if their analysis shows that it is fully valued, they won’t continue to buy it. I’m not going through the posts, but Robert said that their first price target was $9 and another one (when the price reached that) said that it wouldn’t get interesting again until new contracts were announced, or it sold off to around $6.
I think you may be reading too far into the McKesson partnership. The meeting on the Mesa was an industry conference with dozens of presentations, discussions and partnering opportunities. We know there is a lot going on behind the curtains at Cryoport and they are sitting on contracts that haven’t been announced. During the 2nd quarter conference call, they said they weren’t ready to announce the Kite contract . . YET. Then about a week after Novartis received approval for Kymriah, they announced the contract with Kite, apparently to keep the momentum going.
Laser, the reason I thought he was talking about Northwest Bio, is in February, Northwest stated that the PFS events had been reached and OS events should be reached in a few months. So at that time, if they were in discussions with Cryoport about commercialization preparations, it may have seemed to Cryoport that a BLA filing could happen this year. While they didn’t exactly shelve it, the trial is taking longer than it looked like it would 9 months ago, and I think Mark was doing a little ad libbing. I don’t know who else he could be talking about. I agree that we should get a readout soon, and a lot of things are lining up, (FDA guidance on RMAT’s released, funding, etc ) and it could be one of the BLA’s they are talking about for next year.
BTW - I added some more trading shares since that post, so my house could be beachfront, right next to yours. Hawaii right?
Cold, I agree that the Cryoportal is a significant competitive advantage for the company and it’s the primary reason Cryoport has the leadership position it does. And while I think the management team certainly understands the company’s strengths and the industry in which it competes, and have improved and leveraged Cryoport’s products and services to position the company on the doorstep for success, I question if they are capable and understand what it takes at the next level.
I think many here understand the company quite well, but a number of factors have to come together to make a good investment. Timing is very important, and it can be the difference between a profit and a loss. As you said, for many years CYRX wasn’t investable. Robert is talking about the investment thesis, and quite honestly, CYRX didn’t have one until recently, and it hasn’t changed. Cryoport isn’t undervalued because the market doesn’t understand the informatics advantage Cryoport has, or it’s value proposition. The market doesn’t like uncertainty, and right now, there are a lot of unknowns with Cryoport.
The larger institutions have access to more information than you could ever imagine. They hire the best and the brightest, and have analysts who conduct surveys and field level research, attend industry conferences, company presentations, and listen to conference calls, economists who conduct and access macro-economic research, quants who build financial and forecasting models, and of course teams of highly educated analysts conducting detailed financial, competitive, market, valuation, and risk analysis on individual companies for possible selection by the PM for their stock or bond portfolios. They have trading desks with experts in options and futures, stock and bond trading strategies, and technical analysis, and use artificial intelligence supercomputers to assist or even perform their trades. There is nothing that you know, or think you know, about CYRX that they don’t.
Robert didn’t make a great first impression, but he has had some timely and helpful posts. And he did answer those questions. You just have to know how to listen.