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Amazing praise coming from the CEO of Histogenics at there earnings call. When asked about the competition here's what he said:
Adam Gridley
Sure. Great question, Brandon. And I think you're spot on. The competition has created substantial awareness over the last year. They've had a fantastic launch in our opinion and kudos to them from the team here at Histogenics. We've been really pleased to see the market awareness that is increasing. I think there's a general excitement that they're starting to beat some new cartilage therapies that are hopefully going to provide better outcomes than some of the surgical procedures or some of the first generation products.
Until very first Macy program launched about a year in quarter ago, they reported some great results last week. They've seen robust reimbursement coverage, and I think that both surgeons, patients, and investors as well are really starting to pay attention to this space. I think that this for us and other competitors is positive overall. This is an extremely large market. The Macy team is focused on a number of the sort of larger lesion activities. Some of the previous cartilage cell surgeons and they've just done a tremendous job educating, training, and creating awareness for that product.
Average biotech Price to Sales ratio is 7.02. If VCEL was given that, the current share price would be $12.64. STILL UNDERVALUED.
OUTSTANDING new MACI promotional info. A must watch: http://www.maci.com/patients/dara/index.html
lasers are you OK?
It has been over 2 months since you posted a message on this board. That worries me. When I first discovered VCEL back in 2016, it was your positive messages along with my own DD that got me excited about this company. So far that has resulted in some very large profits.
I hope you are fine. Please let us know.
Incredibly positive statements on this new video from NBC news station in Little Rock, AK.
The surgery went great. Jennifer can walk without pain again, thanks to new technology, called "MACI".
"That this could prolong my need for knee replacement surgery for up to 25 years, and that sold me," said James.
Dr. Reynolds has been using "MACI" for a little over a year when the FDA approved the procedure. He did 15 transplants last year. He's on track to do up to 30 implants this year.
"I personally see this exploding," Dr. Reynolds says, "We're seeing such faster recovery, such faster results".
http://www.arkansasmatters.com/news/local-news/health-matters-cell-therapy-knee-repair/985321105
Thanks.
Setting a particular dollar amount to exit a stock is usually not a great strategy for what one considers a long term investment. Better to constantly review the reasons you bought the stock in the first place and if it still meets your risk/reward & potential growth expectations, then it doesn't make sense to sell.
That said, there is also nothing wrong with having a certain percentage of short term shares to trade around your core holding. In many of my stocks I will have a day order in to sell some shares if it jumps up over 10% that day. Most times when that occurs I will be able to buy the shares back for less that same day so I still have the same amount of shares but have lowered my cost by adding a little profit. Of course, that strategy is only for full time investors who are right on top of what is going on in the market. For all others it is best to just hold until something significant happens that changes your opinion of the stock. Don't see that happening anytime soon with VCEL.
Back in June I made a comment on a Seeking Alpha article in which I suggested the author take a look at VCEL which at the time was selling for about $3. The author of the article is Justin Polce. Recently I went back to that article and asked him if he had in fact looked into VCEL. He responded and said he had looked at it but unfortunately didn't buy any and he asked about my opinion of it going forward. Here is my response:
Commoncentsinvestorguy
Comments (527) |Following
Hi Justin,
Sorry you did not take advantage of the already big gains in VCEL, but at $6, it has a very long way to go. I will try to explain as simply as I can why I believe that to be true.
Firstly, for a stock to take up as much space in my portfolio as VCEL does, I require that it has the potential to at least double or triple over the next 12 to 18 months and have little if any downside risk. I believe VCEL definitely fits those parameters.
You ask: ".looks to me like they will be somewhere around $54m in 2017 revs (flat v. 2016), correct?"
Almost but not quite correct. Revenues for the first 9 months of 2017 have been $40.6M. Historically December has been Vericels biggest revenue month so I expect FY 2017 to be about $60M. That would be about a 10% increase over 2016. Nice, but not exactly a bonanza. Here's why.
MACI was just FDA approved in January 2017. It is a 2 step procedure. First a biopsy and then the surgery. There is about a 3 to 4 month gap between the two as they prepare and grow the cartilage regeneration scaffold. So immediately you lose about a quarter of a years revenue. Then of course with a new procedure they had to sell surgeons on it and train them. Another time delaying factor. Then you also have to get insurance company approval. I believe they have now reached approvals with almost all the majors and coverage for about 90% of the market. They should reach 100% soon.
Because of these reasons, rocket growth was never expected in 2017. 2018 is a different matter. At Carticels peak they had about 150 surgeons trained. With MACI they are now over 450. Carticel was approved for fewer areas of the knee and as a 2nd line treatment. Most policies now cover MACI as a first line treatment.
For all these reasons I fully expect MACI to at minimum do 2 1/2 times the revenues of Carticel which were $40M in 2016. That would be a bare bones minimum of $100M. Add another $20M minimum for Epicel, and at the very least we have $120M revenues.
I estimate it takes $80M for break even and then 50% falls to the bottom line. That would be a net profit of $20M or about an EPS of .57. Give that a 20 multiple and you are at $11.40 per share.
Now, I really don't think I could be any more conservative in those estimates and I really expect revenues over the next 12 months to at least reach $150M or more. That would warrant a share price of at least $20.
So that is my Vericel thesis going forward. AND it contains absolutely no value for any revenues from ICT for sales in China & South Korea, nor anything for their ixCell product which has achieved Fast Track, Orphan & RMAT status and which they are actively seeking a partner to take it to FDA approval.
Still believe on a risk/reward basis VCEL is as good as they come.
To read full exchange: https://seekingalpha.com/article/4084840-aralez-time-turn-around
manisero,
There's an old saying that goes something like this: "Sometimes you say it best when you say nothing at all."
MACI being reviewed for treatment of ankle injuries.
Osteochondral lesions of the talus (OLT) are the most common ankle articular cartilage injury. OLT occur in up to 50% of acute ankle sprains and are frequently associated with sports-related injuries [1]. While ankle injuries are suffered by approximately 1 per 10,000 people in the general US population per day, the athletic injury rate is much higher at 5.2 injuries per 10,000 athlete exposures and as high as 9.4 injuries per 10,000 athlete exposures during competitive events [2, 3].
Matrix-induced autologous chondrocyte implantation
Evidence in the literature has demonstrated arthroscopic MACI as a safe alternative for the treatment of OLT with good overall clinical and radiologic results. Giza et al. [39] assessed the clinical outcome following MACI in 10 patients over 2 years. The mean AOFAS score improved by 13 points after 1 year and was maintained after 2 years. Aurich et al. [42] reported, in a case series of 19 ankles, significant improvement of the AOFAS score from 58.6 to 80.4 at a mean follow-up of 24 months. In the athletic population, 81% patients returned to sports after MACI, of which 56% returned to preinjury level. In an additional study, Magnan et al. [43] evaluated 30 patients with a mean lesion size of 2.36 cm2. The mean AOFAS score improved from 36.9 preoperatively to 83.9 postoperatively, and 50% patients returned to previous sports. Giannini et al. [44] reported, in what we believe to be the largest case series with the longest follow-up, a study involving 46 ankles with a mean follow-up of 87.2 months. The authors reported that the mean AOFAS score was 92 at final follow-up. Among 25 patients who practiced sports, 20 returned to preinjury sports level, 3 resumed the same sport at a lower level, 2 shifted to a non-contact sport, and 4 patients gave up sports. Four professional soccer players included in the study were all able to resume their previous activity. Currently, this procedure is not approved in the USA for generalized use.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5344864/
Happy New Year manisero.
Colangelo has stated many times that their immediate intention is to put all of their efforts into expanding revenues for their currently approved products MACI & Epicel. ixCell will only be moved forward in the immediate future if they partner with someone who is willing to pay the costs of completing Phase III. Since ixCell has already received Fast Track, Orphan, and RMAT status, chances of that happening are probably pretty good.
Personally I have never included anything in my estimates of the companies worth or estimates of future revenues for ixCell. If it actually happens, it could dramatically increase the share price.
The ICT deal has begun:
On December 21, 2017, ICT delivered to the Company a payment of $5.1 million, comprised of an upfront license fee and an aggregate warrant purchase price of $4.2 million (the ?Warrant Purchase Price?). In consideration of the Warrant Purchase Price, the Company issued to ICT on December 21, 2017 the Warrant to purchase, at an exercise price of $0.01 per share, an aggregate of 818,424 shares of the Company?s common stock based on the closing price as of December 6, 2017. On December 27, 2017, ICT exercised the Warrant pursuant to a cashless exercise in exchange for 816,850 shares of the Company?s common stock.
This could result in huge dollars for VCEL going forward.
Well, it's been 11 months since I "discovered" VCEL and so far my opinion hasn't changed. With respect to UPSIDE POTENTIAL versus DOWNSIDE RISK, I believe it to be the most undervalued stock in the market.
Anyone who dabbles in small cap biotechs who does not own Vericel is missing a very sure bet. Most others with VCEL's market cap have little or no revenue and are spending big time to try to get an FDA approval.
Here we are with 2 FDA approved important products, a 3rd potential blockbuster, and substantial revenues that will only increase exponentially. I believe our rewards may possibly exceed even our fondest expectations.
Happy Holidays to all and best wishes for a most rewarding 2018.
manisero, you have been so wrong about this stock & this company it amazes me that you continue to post your drivel. Do you remember what you wrote back in January.
Monday, 01/23/17 04:01:17 PM
"At the speed that VCEL. is coming down possibly the bloodshed stops at 1,70. Today I sold all my position (2,65$) after losing a buck and I m happy I did it.'
So you were "happy" that you sold at about the absolute bottom. You might have been even happier if you had just shut up, held your shares and been up 75% for the year.
If you haven't noticed, Vericel is growing surgeons, growing biopsies, growing sales reps, growing territories, growing both MACI & Epicel revenues and making deals in China. When a company does this the price goes UP not down.
Say manisero, you really need to relax.
On May 5th you wrote: "Worst investment I did in years throwing my money here at 3,20. Lost all my confidence in this damned company."
Since then, most of your messages have been critical of the company and always worried about the share price going down.
Yet, over the last 6 months, your VCEL investment is up over 50%. Most people would be very happy with a profit of 50% in 6 months.
This is a long term investment. Between now & the time it hits $10 or $15, there will be times it back tracks and times the market has a negative view. That happens with all stocks. The important thing to remember is where you end up, not what happens along the way. So far you're ending up pretty good so might be wise to stop complaining.
Orthopedic Summit going on now in Las Vegas.
MACI presenter is Dr. Christian Lattermann:
https://www.orthosummit.com//Meetings/2017/OrthoSummit/FacultyDetails?MemberID=26755
He is a huge MACI fan and actually helped get it to FDA approval:
https://www.newswise.com/articles/dr-christian-lattermann-becomes-first-surgeon-in-kentucky-and-midwest-to-perform-maci-a-new-technology-in-cartilage-repair-which-he-helped-move-toward-fda-approval
Generally timelines presented in an actual SEC document turn out to be more reliable then those made in a sales presentation.
"We do not expect to generate any future revenue from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take place in the next few years."
"Saying that competitors are 3 years away is mis-representation. "
If what you say is true, then it is Histogenics themselves who are doing the misrepresentation. This is from their latest 10Q:
"We do not expect to generate any future revenue from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take place in the next few years."
My advice would be to invest in HSGX, MNK, and BCDA and then you wouldn't have to worry about VCEL.
Skepticism is fine but reality is better. Vericel has the MACI & Epicel markets to themselves for at least another 2 to 3 years. By then they will be very entrenched and nothing I see coming forward has enough additional benefits to knock them out of the box. Medical folks are very slow to make changes once they are comfortable with a product or procedure.
Enjoy the ride and the profits while you can.
If this chart is correct, the average PE for biotechs is Trailing:245.74 and Forward: 110.44.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html
P = Price per share
E = Earnings per share
PE means Price times earnings.
In the example I gave, earnings were .50 per share.
According to Investopedia: "The average market P/E ratio is 20-25 times earnings."
Using the low end of that (20) the share price would be 20 x .50 or $10.
Actually, based upon revenue growth of about 100%, the PE ratio should be much higher than that.
And, yes, a company must have profits in order to have a PE.
P = Price per share
E = Earnings per share
PE means Price times earnings.
In the example I gave, earnings were .50 per share.
According to Investopedia: "The average market P/E ratio is 20-25 times earnings."
Using the low end of that (20) the share price would be 20 x .50 or $10.
Actually, based upon revenue growth of about 100%, the PE ratio should be much higher than that.
And, yes, a company must have profits in order to have a PE.
How easy will it be to get to $10 per share?
Let's start by assuming that using a PE of 20, it would take .50 in earnings to have a share price of $10.
So how do we get to an EPS of .50?
With 34M shares it would take $17M net profit to achieve .50 EPS
Break even takes about $80M in revenues. So to get the additional $17M would take another $34M for a total of $114M in revenues.
It appears that Epicel will be doing about $20M in revenues.
So it would take another $94M in MACI revenues.
At $39,000 per surgery it would take 2400 surgeries to do $94M MACI revs.
With 440 trained surgeons it would take an average of about 5 1/2 per surgeon per year to accomplish that. With an estimated total market for MACI surgeries in the U.S. of 20,000 per year, to hit this goal would amount to capturing only 12% of the market. Seems like a sure thing to me.
I woke up. Since earnings report added another 18,000 shares at average of about $3.83. That is in addition to a very, very large holding that I already had. Ready for ride to $10+. Opportunity like this doesn't come around often. Must take full advantage when it does.
You are welcome. Publicity for new surgical procedures is a very important factor in it becoming popular among both patients & surgeons.
Some money can be made by traders pushing around a small cap stock for a day or two. But fortunes are made by taking advantage of anomalies in a share price.
When a company reports 30% growth in revenues, 44% increase in biopsies, and trained MACI surgeons up to 440, and the share price goes down 10%, that's an anomaly. That can't last and is a great opportunity for those willing to take advantage of it. This happens to almost all stocks as they become doubles, triples and 10 baggers.
A year from now, looking back at being able to buy VCEL shares around $4 will look like a gift from the gods.
The best way to become disappointed is to have unrealistic expectations. No, revenues this quarter are NOT going to be $25M. No, there will be NO profit this quarter.
According to the CEO, time lapse between biopsies and implantations is 4 to 6 months. So it is just not possible for this to be a HUGE revenue quarter. Personally I will be happy with $14M in revenues and loss of .10 or less.
If they hit those numbers and the share price goes down, I will be happy to make a big addition to my already boatload of VCEL shares.
What I am 99% sure of is that in 2018 Vericel is going to do at least $100M in revenues. The average price to sales ratio for biotechs is 5.82. So if VCEL is given just an average markup, it would be a market cap of $582M. That would be a share price of $18.18 which is almost a 5 bagger from todays price.
GOOD THINGS COME TO THOSE WHO WAIT.
THE FIRST MACI ARTICULATED CARTILAGE TRANSPLANT IN TAMPA BAY
Dr. Seth Gasser performed the first MACI articulated cartilage transplant ever to be done in the Tampa Bay area in 2017 at the Florida Orthopaedic Institute Surgery Center. “We can treat a variety of different patients with MACI,” said Dr. Gasser of Florida Orthopaedic Institute. “It may be a parent who is experiencing severe knee pain while performing simple tasks around the house such as walking up the stairs or doing yard work. MACI can also be used to treat higher demand patients such as athletes, firefighters, law enforcement professionals, and active military personnel.”
Florida Orthopaedic Institute was the first location in the Tampa Bay area to perform the MACI procedure.
To find out if MACI is right for you, contact one of these Florida Orthopaedic Institute surgeons certified in MACI and specialize in this procedure.
https://www.floridaortho.com/specialties/knee-leg/maci/
Of course that wasn't MACI. It was just a procedure of trying to use cartilage regeneration as a way of improving knees. I remember back in the 90's when my wife was going to need a knee replacement, investigating what else might be available. At the time they talked about cartilage regeneration but it was still years away from becoming a reality.
This Alaska medic has already done 5 MACI surgeries:
http://www.alaskajournal.com/2017-10-25/unique-procedure-gets-coast-guard-medic-back-track
Mayo Clinic:
"Renaissance means rebirth or regeneration. Every few generations medicine takes a major turn. We’re at one of those junctures now with regenerative medicine — where healing is triggered from within the human body. It’s bringing a whole new universe to how physicians provide care."
https://discoverysedge.mayo.edu/2017/03/24/renaissance-in-medicine/?utm_source=twitter&utm_medium=sm&utm_content=post&utm_campaign=mayoclinic&geo=national&placementsite=enterprise&mc_id=us&cauid=100503&linkId=38405307
Just the beginning:
"I am beyond thrilled with my MACI transplant in my left knee 3 months ago!"
http://bit.ly/2xXjDm8
Drop from $6 to $4.60 COMPLETELY UNWARRANTED.
Hope many were able to use that as an opportunity to add to their VCEL stash.
So what happened?
Well, we have a stock that went from $2.60 to $6 in a very short period of time. It is not uncommon that when a small cap stock rises that quickly it is usually the subject of a short attack. What prevented the shorts from acting was the possibility (even though it was remote) that ixCell would get approved before going through Phase 3. That would have caused a huge increase in the price and acted as a deterrent for the longs. Once that possibility was removed, the shorts stepped in.
The ensuing drop really had nothing to do with the real value of VCEL shares, but rather just their using their power to take advantage of a situation, and if anything just gave those with powder the chance to pick up shares under $5 that will double or triple over the months to come.
So I go out of town & out of communication for 4 days and find that you people let the share price go down a buck. Do I have to do everything around here. LOL.
What a perfect example of overreaction to something that had zero meaning regarding the current stock price. Personally I have never given even 1 penny value for ixCell in my calculations regarding my certainty that VCEL will end the year at at least $10 to $15 per share.
If that turns out to be true (which it will if all my other predictions have been on the money) than I will be very happy to have the opportunity to buy a bunch more shares at $5 rather than $6.
This is exactly how money is made in the market. You take advantage of opportunities when they smack you in the face. I really don't mind that the value of my shares when down a bit because I had no intention of selling them anyway. And when the price hits $20 nobody will care if the price today was $6 or $5.
One more thing.
Anyone who has been involved in little known small cap stocks that have gone from like $5 to $30, $40, or $50 knows that the real big gains don't even begin until the stock "gets discovered".
That certainly hasn't happened yet. A few thousand new retail buyers is great and has moved the stock well, but most likely 99% of the market has not even heard of Vericel. There are some good examples of this:
1. I don't know if you have noticed, but not one Seeking Alpha author has done a VCEL writeup. And that includes all of the ones who are supposed to specialize in biotechs. Every day there are articles about some little company who MIGHT get a product FDA approved sometime in the distant future if everything goes well, and that you probably should invest some money in that stock. Of course the chance of that happening might be 1 out of every 20. Since none of these people seem to want to talk about VCEL, I have made a point to go on the comment section of some of these articles and let the readers know about VCEL. I know that some of those readers have become shareholders, but it would be a lot more powerful if the so called "experts" would start doing their followers a favor by cluing them in to Vericel before it doubles, triples or more.
2. How many analyst outfits have come out with a rating on Vericel. Maybe 3. And they are pretty much the small ones. What would happen if a big outfit "discovered" this company and came out with a strong recommendation? It will happen eventually.
3. Peter Lynch always said his favorite stocks were the ones he bought before the institutions found them. Again, that's going to happen and the gains can be mind boggling.
So congratulations to all those who one way or another found their way to this stock. You are going to be happy campers.
From March through the middle of June VCEL was being controlled by shorts or those who wanted to keep the share price down. It would go to $3 and then it would get beaten back to $2.60 slowly. Sometimes it would take a few weeks. That all changed on June 16th with the share price at $2.55. Now a short attack or somebodies attempt to push the price down lasts hours. That's because:
1. The last earnings report showed that MACI is for real and is going to transform the companies revenues and earnings.
2. The possibility for an ixCell approval or partnership to take it to approval, at any minute, would scare the dickens out of anyone brave enough to take a substantial short position.
and
3. The base of STRONG shareholders who are not going to panic with every little downturn has increased exponentially. Just look at the number of messages on this board compared to a couple of months ago, and even more impressive is that the "Watchers" on Stock Twits is now 7,162. That's about a 50% increase lately.
This combination of very marketable and unique FDA approved products, possibility of another blockbuster product, good management, and a smart, strong shareholder base is what gives this company the likelihood of making many of its shareholders a great deal of wealth.
Just a matter of having a little patience and letting time do its work.
Correct.
Ever since VCEL hit $2.60, the best way to buy it has been on the way up. Endless number of people on the Stock Twits board have said they are waiting until it goes down .20, and it hasn't, and they have missed huge run ups. Funny how people seem only to want to buy a stock when it goes down and usually you are much better off buying as it goes up.
The .05 rule has hurt this stock as far as trading goes, but as the price goes up the .05 becomes a smaller percentage of the price and more people will be willing to buy on the ask.
More & more we are not alone in believing VCEL is a terrific opportunity.