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I agree John. So far I (and I believe the market) have totally disregarded ixCell regarding the share value. If that does get approved, it will take this to a whole new level and along with it a whole new type of buying & selling.
Until now VCEL has strictly been a buy/hold & add stock for me except for one time period. That was nearing 2Q earnings report. Share price hit about $3.50 mid June. I was not convinced 2Q report was going to be as good as it was so I sold about 40% of my shares at $3.45 & $3.50. Price did then go as low as about $3 and right after earnings I was able to rebuy all my shares plus more at $3.30 & $3.35. Since then, of course, it's just been enjoying the ride up.
Those are my core shares and I can't see anyone prying any of them from my hands until at least $10 or more depending on what is happening. But it is possible that quite soon VCEL may also become a good trading stock with good intraday moves. If that happens I will begin trading some shares around my core. But until something changes, VCEL will remain my largest holding and I believe it to be one of the few potential life changing stocks.
It's nice to have a message board where the posters don't get hysterically giddy or frantically afraid if the share price of the stock happens to go up or down 10 cents.
This board seems to be composed of folks who understand the basic value of this stock, know that the potential rewards vastly outweigh the slender downside risk, and are willing to stay patient while events take place that will drive the share price higher and higher.
In my 20 years of investing I have only found 2 other stocks that I was as positive about as to potential profits as I am about VCEL. One went up 9000% in a little over a year, and the other was about a 20 bagger over a few years.
Great upside potential stocks that have little downside risk are very, very hard to find. So when you do, take full advantage. Add when you can and hold on until something happens that actually changes the basic story to a negative. That certainly hasn't happen with Vericel yet even though there have been a couple of short attacks since the beginning of the year. Those just gave wise investors the opportunity to pick up some more cheap shares. Those kinds of attacks probably will happen again as the share price makes its way to $10, $20 and who knows how high.
Good luck and good investing.
Another FIRST MACI Surgery. This one in North Carolina:
http://www.pr.com/press-release/729338
From BTIG Research report:
"“Among Cartilage Repair Surgeons We had the opportunity to host a key opinion leader (KOL) call with Dr. James Carey, MD, MPH, Director of University of Pennsylvania’s Center for Cartilage Repair and Osteochondritis Dissecans Treatment. Dr. Carey is well positioned to opine on the topic of cartilage repair as he has given more than 60 presentations on the topic and authored more than 50 papers in the area of cartilage repair. Dr. Carey also conducts some of the highest ACI repair volume in the US. Our high level takeaways from the call support our view that MACI offers physicians and patients lifestyle benefits including faster operative times, ease of placement, and patient convenience in scheduling the procedure.”,” the firm’s analyst commented."
Here's another one:
"Revenue for Vericel’s cartilage repair franchise jumped 44% in the second quarter, compared to the same period last year, Colangelo said – and he doesn’t see the growth slowing down anytime soon.
“We expect this momentum to continue, particularly in light of the fact that we currently have a relatively low penetration rate into the patient population of Maci,” he said."
http://www.drugdeliverybusiness.com/vericel-ceo-industry-reached-watershed-moment-cell-therapies/
Excellent article about Vericel & ICT:
http://www.bioworld.com/content/chinese-car-t-firm-ict-licenses-vericels-cell-therapy-platform-asia-0
Nice find Hurley. Don't think this had been uncovered before. Probably too small a contract to be announced by the company, but significant when the military starts using any companies product.
FDA Commissioner Scott Gottlieb: "In addition, the FDA will continue to work closely with industry to find other ways to aid in the effort to bring novel therapies to patients as quickly, and as safely, as possible. One of these will include our continued commitment to fully implement the Regenerative Medicine Advanced Therapy (RMAT) designation. This pathway enables regenerative cell therapies to access the FDA’s existing expedited programs to help foster the development and approval of these novel products. Among other things, we plan to include certain gene therapy products that permanently alter tissue and produce a sustained therapeutic benefit as part of the products that will meet the definition of being eligible to come under the pathway enabled by RMAT. This is part of our broader commitment to pursue efforts that will advance innovation in this space. We encourage sponsors who are seeking FDA approval of their product to consider this pathway."
http://www.oasissurg.com/2017/08/28/fda-commissioner-scott-gottlieb-m-d-on-fdas-new-policy-steps-and-enforcement-efforts-of-stem-cell-therapies-and-regenerative-medicine/
lasers, realfast, hurley & all other long timers, great to see patience and positivity rewarded. This, of course, is only the beginning.
"Peninsula Orthopaedic Associates Announces First MACI Implant in the Region for the Treatment of Cartilage Defects of the Knee"
http://www.prnewswire.com/news-releases/peninsula-orthopaedic-associates-announces-first-maci-implant-in-the-region-for-the-treatment-of-cartilage-defects-of-the-knee-300509234.html
Do not underestimate the POWER of recommendations from satisfied MACI patients. Like any new product its success is largely dependent upon people liking it and spreading the word about it. Because of the nature of the MACI product, there is a long delay between the biopsy then the actual implant, and then the successful recovery, before the consumer is able to give an honest appraisal of the quality of their experience. Just think about when there are a thousand satisfied MACI patients spreading the word to their friends, relatives and the press about their improved condition.
" So, on May 5, she underwent the MACI procedure, and she said her recovery has been remarkable."
Today, Munn said her strength is coming back every day. “Overall my recovery is pretty astonishing.”
http://hinsdale-orthopaedics.com/news/dr-jason-hurbanek-first-patient-silver-cross-hospital-undergo-maci-matrix-induced-autologous
This is a different time and Vericel is at a different place than at the time of the previous dilution.
Actually realfast it is possible that the ICT $6M is already in the bank. It, of course, wouldn't have shown up in the Q2 numbers as it has always been expected to be paid in Q3. We are already halfway through Q3 so who knows. The deal must still be on because Colangelo just said: “Likewise, the license of our product portfolio to ICT provides an opportunity to develop a global footprint for our product portfolio and to create another potential revenue stream for the company."
Anyway, assuming the $6M is in house or coming shortly, that would give them $20M cash. Then, don't forget this: "Vericel Enters into Expanded $20 Million Credit Facility and Term Loan with Silicon Valley Bank and MidCap Financial Services". https://globenewswire.com/news-release/2016/09/12/871107/0/en/Vericel-Enters-into-Expanded-20-Million-Credit-Facility-and-Term-Loan-with-Silicon-Valley-Bank-and-MidCap-Financial-Services.html
So that makes $40M available before need for dilution. Then they also have the $25M ATM agreement with Cowen wherein they can sell small amounts of stock at market if necessary.
So, it does not appear any major dilution is imminent.
Very happy that it beat my expectations. Restocked my VCEL cupboard this morning.
Laser, I wonder if you could confirm the following statement by Dan Orlando during the CC:
"Given that implants typically lag biopsies by approximately six months, we expect to see a commensurate increase in implant volumes in the second half of the year."
If that time schedule is right, then it would mean that the big increase in biopsies for 2017 hasn't even shown up in surgery revenues for the first 2 quarters. What's your thoughts?
For the 2nd straight quarter I would advise VCEL investors to temper their earnings expectations. Right prior to Q1 earnings report I posted a message saying revenues would be lower than expected, that it would cause a momentary dip in price but that it would rebound quickly. On the day of the report the price went as low as 2.35 but quickly came back and closed with a gain of .05 for the day. And since then, the price has gotten as high as 3.55.
MACI was only approved the end of December and the first surgery wasn't until Feb. 1st. The first quarter was spent mainly contacting and training surgeons. Than, of course, as they find qualified patients there is the 6-8 week delay between the arthroscopy and when the final surgery takes place. Than it takes time to get reimbursement. So it would be improbable to expect huge MACI revenues in Q2. I think more people understand the time factor and we may not get the same type of price dip even if revenues are not great. The important statistics are the number of biopsies, and the number of trained MACI surgeons. The added good news would be increases in Epicel revenues and progress with ixCell and the ICT partnership. Plenty of good stuff to look forward to.
For the sake of full disclosure, I have been and still am very, very long VCEL. I did sell about 30% of my holdings over $3.40 but will be reacquiring those after earnings whatever the price may be. Q3 is already 1/3 over and it is now and going forward that the real revenue progress will begin to explode. Over the next 6 months I expect Vericel to become a darling of the institutions and at least triple its current share price. Still believe it is the surest bet I have come across in the market in quite some time.
Why VCEL is a sure thing to go to $10 or more.
In 2016 Carticel did 1000 surgeries.
Carticel was approved ONLY for 2nd Line treatment. Mainly after arthroscopy or microfracture failed.
MACI is approved for 1st Line treatment.
Carticel was approved for Femoral condyle only.
MACI is approved for all cartilage defects including Patella, single or multiple defects with no limitation on size, and with or without bone involvement.
Carticel had maximum approved surgeons of about 140.
MACI already has over 200 approved surgeons and the procedure is much easier with significant reduction in surgical time. To surgeons, time is money.
With all these advantages it is CERTAIN that there will be many more MACI surgeries than Carticel. According to Colangelo, the market for MACI surgeries is 10,000 to 20,000 per year. Let's call it 15,000.
If MACI does just 20% it would be 3,000 per year. At $44,000 per, it would amount to $132M in revenues. I believe break even currently for Vericel is around $85M. That would leave an overage of $47M at a 50% profit would amount to a net profit of $23M or about .70 EPS. A 20PE would put the share price at $14.
That, of course, is without any contribution from Epicel, ixCell, or the CTI partnership.
$10 per share is not a matter of IF, but only WHEN. Those with patience could end up with life changing profits.
About Innovative Cellular Therapeutics
Innovative Cellular Therapeutics (ICT) is a clinical-stage cell therapy company based in Shanghai, China. ICT has established a broad portfolio of CAR-T products to treat cancer patients. ICT's proprietary 19CAR series has achieved outstanding clinical results in treating late stage leukemia and lymphoma patients who failed to respond to standard of care therapies. The company also has multiple discovery candidates targeting colorectal cancer, gastric cancer, esophageal cancer, and metastatic breast cancer as well as a universal allogeneic CAR-T therapy. For more information, please visit the company's website at www.ictbio.com.
Dr. Lei Xiao, Chairman of ICT commented "MACI, Epicel and Carticel are FDA approved products and have successfully treated thousands of patients in United States. Ixmyelocel-T has been evaluated in a phase II study in the U.S., and the encouraging data suggest that it may be a treatment option for millions of heart failure patients. This collaboration enables ICT to bring world-class cell therapy products to China and other Asian countries which will benefit the patients in multiple therapeutic indications. By combining with our advanced CAR-T portfolio, ICT further strengthens its leadership position in Cell Therapies in Asia."
I think you better check your numbers. This is not "low volume". Average volume is 167,000 and we are already at 313,000 in only 1/2 day.
Experts come out against arthroscopic knee surgery:
https://www.painnewsnetwork.org/stories/2017/5/16/new-warning-about-arthroscopic-knee-surgery
https://usa.inquirer.net/3700/knee-pain-avoid-arthroscopic-surgery-experts
So arthroscopic is no good, microfracture isn't much better. That leaves MACI and Total Knee Replacement and TKR usually isn't done on people under 50. A huge market just got bigger.
"VCEL has a competitor with better phase 2b results."
Are you talking about a competitor for MACI or ixCell?
" MACI needs 6 months to show growth and growing revenue. Dead money until then, in my opinion. "
Strongly disagree.
1. Carticel did $39M in 2016. Because MACI is approved for primary rather than secondary like Carticel and for more defects. And it is a much simpler procedure and they have already trained many more surgeons than there ever was for Carticel, I believe it is close to 100% certain that MACI will create much greater revenue. And in addition you don't have to wait 6 months to determine what is going to happen. Watch the increase in number of surgeons and number of biopsies coming in.
This is about as sure a thing as there is in the arena of small biotech stocks. Those wiling to take the slight risk now, most likely will be rewarded beyond their fondest expectations.
"It's funny that ixmyelocel-T went from a dormant story to the hottest iron in the fire. "
BUT, there is not one penny of value built into the share price for ixCell. CRAZY.
"New surgery debuts at MAHC"
http://www.ftleavenworthlamp.com/news/20170420/new-surgery-debuts-at-mahc
Nicholas DiNubile, MD, Contributor
Orthopedic Surgeon, Sports Medicine Doc, Team Physician & Best Selling Author. Dedicated to keeping you healthy in body, mind & spirit. @drnickUSA
Rebuilding and Regenerating Damaged Knees: The Future Has Arrived!
04/20/2017 04:09 pm ET
http://www.huffingtonpost.com/entry/rebuilding-and-regenerating-damaged-knees-the-future_us_58f905a0e4b0f02c3870e7e7
Blue Cross: 4/2017 Policy statements clarified to include matrix-induced autologous chondrocyte implantation (MACI). 4/1/2017"
http://www.bluecrossma.com/common/en_US/medical_policies/374%20Autologous%20Chondrocyte%20Implantation%20for%20Focal%20Articular%20Cartilage%20Lesions%20prn.pdf
As any reasonably informed investor knows, VCEL is vastly undervalued just based upon the potential of its two FDA approved products, MACI and Epicel.
It is difficult not to believe that both products will more than double the revenues they achieved in 2016 over the next 12 to 18 months. That alone should increase the share price by 3 to 5 times its current level.
The amazing thing is that there is absolutely no value at all built into the share price for ixCell which was recently fast tracked. The spending for that product is now done but the huge potential remains. I think it is worth rereading a Zacks article from May 2015 pertaining to the potential of ixCell. They think it is a $1B product:
"With ixmyelocel-T, the Phase 2b ixCELL-DCM program continues on plan. Full enrollment was announced in January 2015. Enrollment took place at 30+ centers. It is clear to us based on the data Vericel has generated to date that ixmyelocel-T has utility in ischemic DCM. Management was clearly excited about the potential for the drug given the large market opportunity, with an estimated 170,000 patients seeking treatment, and "sweet-spot" focus for ixmyelocel-T positioned as an alternative to LVAD or heart transplantation. Assuming enrollment is completed very soon, we expect top-line data from ixCELL-DCM in the first quarter 2016.
Assuming this data are positive, we believe Vericel will be able to partner the drug for a Phase 3 trial to start in 2016. We believe the Phase 3 trial will take a similar two years to enroll and report data, putting the potential NDA in 2018 and approval in 2019. Approximately 0.6% of the U.S. adult population is classified NYHA Class III/IV. Approximately 15% of these patients have DCM and approximately 60% are considered ischemic in nature (source:American Heart Association). This equates to a target patient population of around 170,000, consistent with the graphic shown above.
If we model 5% peak market penetration in 2024, with ixmyelocel-T priced at $75,000 per course of treatment, this equates to peak U.S. sales of $600 million. We believe sales outside the U.S. will total $400 million, bringing peak worldwide sales of ixmyelocel-T in DCM to $1.0 billion. Given the suspected commercialization price for DCM around $75,000 per treatment, a bargain compared to the$150,000+ for implantation of an LVAD, ixmyelocel-T will carry greater than 90% gross margin once commercialized. That's the beauty of having an orphan drug designation. Those impressive economics are sure to attract a pharmaceutical partner, someone with an acute interest in interventional cardiology, if the data are good.
We believe Vericel can partner for this indication for $25 to $50 million upfront, $100+ million regulatory, and $250+ million in backend milestones, plus a handsome double-digit royalty on sales. We apply a 25% discount rate and 20% probability of success to arrive at a current NPV for the program of around $35 million. Should the program fail, we believe Vericel will kill ixmyelocel-T altogether. This mean, as noted above, regardless of success of failure, Vericel should be done spending significant R&D dollars are ixmyelocel-T in 2016."
More MACI in military:
https://www.army.mil/article/185815/new_surgical_technique_performed_at_munson
"Yes, timing is everything"
Actually, in the end facts are everything. Short term anything can happen especially with micro cap stocks like VCEL. With enough capital, people can manipulate the share price. But that only works for so long. Ultimately all stocks reach a price level that somewhat resembles their level of success or failure.
So all us poor investors can do is speculate as to what that price might be. We can take wild guesses or try to predict based upon what knowledge we are able to glean.
What we know now:
1. MACI has been FDA approved.
2. It fills a big need in the area of solving knee problems between Microfracture and Total Knee Replacement.
3. There are about 700,000 TKR surgeries per year.
4. If MACI gets 1% of those it would be 7000 procedures per year.
5. That would amount to $308M in revenues.
6. Haven't seen numbers for Microfracture procedures per year but it has to be many thousands. MACI could get plenty of that business.
7. Vericel market cap right now is $88M.
So without even adding in the many millions of revenue from Epicel, and anything from ixCell, just based upon getting a tiny fraction of the knee surgery market, how much should the market cap grow in the next 1 to 3 years?
"I...do not think this is some kind of 10 bagger."
Why not?
"It is new and private pay"
If you are talking about MACI, that is not correct.
I checked my home city where 2 weeks ago there were 13. Now there are 47.
http://www.maci.com/specialist_search.html?zip=60191&distance=50&page=2
A couple of weeks ago there was only one qualified MACI surgeon in my area, now there are 4 including 2 of the biggest orthopedic centers.
This is going to be HUGE.
Peachtree Orthopedics added 3 new photos.
February 17 ·
DR. KERCHER ON LEADING EDGE: The FDA recently approved MACI (autologous cultured chondrocytes on porcine collagen membrane) for the repair of cartilage defects of the knee…and this week, Dr. Kercher performed the third MACI implant in the US! MACI is the first FDA-approved product that applies the process of tissue engineering to grow cells on scaffolds using healthy cartilage tissue from the patient’s own knee.
https://www.facebook.com/pocatlanta/posts/1239748799395258
Aetna covering MACI: http://www.aetna.com/cpb/medical/data/200_299/0247.html
Hi scubasteve.
It appears that your experience with biotech investing and your obvious hobby have both put you "underwater".
The only problem I have with your message is that it is completely based upon generalizations. While it is important to take those under consideration, there also happen to be exceptions. I have found that the biggest profits can be made by finding the exceptions. AND, if you can find the exception where the shorts are betting against it and you happen to end up being right, the profits can be HUGE.
What we already know for sure is that knee problems exist and will continue to exist and effect a large part of the population. We also know that current solutions are not totally adequate. Microfracture is not completely satisfactory nor permanent. Total Knee replacement is something most in the medical industry don't seem to want to do until over 50. That leaves a very big gap that MACI could fill. If it only gets a tiny percentage of what is now going towards Microfrature and TKR, it would justify a share price many times todays.
Of course, risk v reward must also be taken into consideration. At this point, I think the downside is probably limited to .25 to .30 while the upside can be at minimum a double. After all, MACI is already approved so that risk is gone. The company has already proved that Carticel could produce about $40M in revenues. MACI is approved for more procedure areas, is simpler, and has better results. So it seems very likely at worst that it will produce significantly more revenue than Carticel. That alone justifies the current share price. Than add in increased Epicel revenues because of the approval for expanded use and it looks like as close to a sure thing as exists in the market.
So the only thing against owning VCEL now is the time factor. Can the money be put towards something more sure with faster potential upside. The problem with that is that announcement of an ixCell partnership could cause a 50% jump in the price in a flash. And while shorts are betting on MACI revenues taking a long time to come in, the true indicator is biopsies. I think they must have missed Colangelo's pronouncement at the earnings release that biopsies were already up 24% ove last year.
So although your previous experience with this stock has not been great, things do change. Just ask a Cubs fan.
" I don't understand why the PPS is so low. "
If you had been following this stock and the trading of it, you would know that the price has been artificially held down by a constant attack by shorts. They have shorted about 700,000 shares since the middle of January. Yet, the share price is a nickel higher than it was back then.
"This should be trading at $5 with the fda approvals."
Without this manipulation it definitely would be selling closer to $5 than to $3.
"How low can this go? "
It depends on if the shorts continue to throw good money after bad. If they do, it could go down another .25. On the other hand if they get smart and throw in the towel, we will be up to $5 in a flash.
Seems like the risk/reward ratio is highly in favor of REWARD.
Since mid January, short interest is up 65% and the share price is up .05. This is the definition of a failed short attack. When you try to attack a company who is growing products, expanding territory and sales force, increasing revenues, and has what may become a game-changing product, you can only throw good money after bad for so long. Much rather see 1.6M short shares have to cover than 988k.
Any little bit of news of the acceptance of MACI or partnership for ixCell could start a massive squeeze. I have participated in some before and they are really fun.
Completely agree with everything you said.
Only faster game changer would be ixCell partnership.
Because VCEL is currently under a short attack by a hedge fund or funds. The only surprising thing is that the huge effort and large amount of money they are putting into this attempt has resulted in such a small amount of down turn in the price.
The good thing is that once they stop, the price could rocket up. Good idea to have shares when that happens.
HSGX
REVENUES: 0
EPS: -2.53
Loss for last 12 mos.: $33.6M
ROE: -167%
EBITDA: -$27.8M
Book Value: .25
Share Pr. 1.78
These TV & Radio coverages of MACI are terrific. Millions watch and hear these things and those who have knee problems or have someone close who has knee problems start checking out a new & better procedure. Next thing they are contacting their doctor for more info and this starts the ball rolling for rapid adoption.
Things look very good going forward.