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Saturday, January 06, 2018 3:07:26 PM
Commoncentsinvestorguy
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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
Recent VCEL News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/20/2024 08:05:24 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/18/2024 08:10:30 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/13/2024 08:05:23 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/12/2024 08:16:40 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/11/2024 08:55:33 PM
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- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/04/2024 02:25:18 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 09/03/2024 05:27:28 PM
- Vericel to Present at the Morgan Stanley Global Healthcare Conference on Friday, September 6, 2024 • GlobeNewswire Inc. • 08/29/2024 01:17:16 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/26/2024 12:03:45 PM
- Vericel Announces FDA Approval and Commercial Availability of MACI Arthro • GlobeNewswire Inc. • 08/26/2024 11:45:47 AM
- Form S-3ASR - Automatic shelf registration statement of securities of well-known seasoned issuers • Edgar (US Regulatory) • 08/16/2024 08:06:06 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/16/2024 08:05:17 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/15/2024 09:03:13 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/15/2024 08:08:47 PM
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