Gamida Cell Ltd (GMDAQ)

[midastouch017]

Gamida: The Die Is Now Cast

https://seekingalpha.com/article/4597888-gamida-die-is-now-cast?

Apr. 28, 2023 3:47 PM ET Gamida Cell Ltd. (GMDA)

Bret Jensen

Investing Group Leader

Summary
Today, we circle back on Gamida Cell, which recently garnered a long-awaited FDA approval and bolstered its balance sheet.
The company also raises new capital and slashes some expenses to support the rollout of the newly approved Omisirge.
What comes next for Gamida and its shareholders? An updated analysis follows in the paragraphs below.

When we last visited Gamida Cell Ltd. (NASDAQ:GMDA) last summer, the company was eagerly awaiting a green light from the FDA for its primary drug candidate. That much-anticipated approval came last Monday. Given that, it seems a good time to put Gamida back in the spotlight. An updated analysis follows below.

Company Overview
Israeli headquartered Gamida Cell is focused on developing treatments for blood cancers and serious blood disorders. Currently, the stock trades around $1.50 a share and sports an approximate $160 million market capitalization.

GMDA pipeline platform
Gamida Company Presentation

The company's primary asset is a candidate called omidubicel, which is an allogeneic blood-based cell therapy. Omidubicel was developed off the company's 'NAM Platform Technology'. This platform permits Gamida to expand multiple cell types - including stem cells and natural killer or NK cells - while maintaining their original phenotype and potency.

Recent Developments
Omidubicel was approved to treat individuals that are 12 years and older with blood cancers planned for umbilical cord blood transplants in the United States on April 17th. Omidubicel is designed to boost the production of neutrophils. This is a type of white blood cell to reduce the risk of infection. The stock spurted up on the news, and Gamida used this burst of investor enthusiasm to raise $23 million in proceeds via a secondary offering. Omidubicel will also now also be known under the brand name Omisirge. This therapy in studies demonstrated neutrophil recovery and fewer infections compared to the placebo group.

GMDA Omidubicel progress
Gamida Company Presentation

Analyst Commentary & Balance Sheet
Analyst activity had been dormant around Gamida throughout 2023 until last week's FDA approval. Since then, Needham ($6 price target), JMP Securities ($8 price target) and H.C. Wainwright have all reissued Buy ratings on GMDA.

Approximately seven percent of the outstanding float in the shares is currently held short. There has been no insider activity in this stock since the third quarter of 2022. Gamida Cell ended FY2022 with just under $65 million of cash and marketable securities on the balance sheet. Cash burn has been a major overhang for the stock in 2023 and higher-than-expected expenses sent the stock plunging late in March when it reported fourth quarter results. Gamida posted a net loss of $79.6 million for FY2023, and before last week's capital raise, just had enough cash on the balance sheet to fund operations through the third quarter of this year. The company closed on a $25 million convertible loan from Highbridge in December of last year.

Gamida took recent steps to reduce its quarterly cash burn. These included the company discontinuing the development of its preclinical NK cell therapy candidates, which included GDA-301, GDA-501, and GDA-601. The company will continue to enroll patients into a Phase 1 trial for its candidate GDA-201. This is another cell therapy pipeline asset developed off the company's NAM platform. Gamida also reduced its workforce by 17%. Gamida's primary focus this year with be efficiently rolling out its just-approved therapy Omisirge.

GDA-201: A first-in-class NAM-enabled NK cell therapy candidate
November Company Presentation

Verdict
As they say in Latin, 'Iacta alea est' or the die is cast, in relation to Gamida. The company's and stock's future will be determined on how fast it can build sales traction for Omisirge. Fortunately, about 80% of individuals that will receive this therapy will come from approximately 70 transplant centers across the U.S. A relatively small sales force is needed to serve this population. Gamida will be targeting 10 to 15 of these centers within its initial launch of Omisirge. It should be able to rapidly roll this therapy out to additional centers as additional resources become available. Management has stated that from a manufacturing, account management, and market access perspective, they are a full 'go' for launch.

We have initiated partnerships to educate and onboard Transplant Centers
November Company Presentation

Omisirge's target population will consist of 2000 -2500 individuals annually according to the company's projections.

If approved, omidubicel may achieve ~20-25% of the market at peak
November Company Presentation

That leaves a small and known customer base to service. Omisirge will carry an average price tag for its therapy of $338,000 according to the company's Chief Commercial Officer. This means, if the company's projections are correct, Omisirge could eventually see north of $600 million in annual sales at peak.

Currently, the consensus is for just under $15 million in revenue for FY2022, followed by just over $60 million in FY2024. Investors will be watching closely the next few quarters for how fast sales ramp and cash burn lessens. Another capital raise at some point over the next year cannot be counted as well. That said, given Omisirge's potential peak sales compared to the stock's current market cap, the equity deserves a small 'watch item' holding until data on the initial launch is seen in the quarters ahead.
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This article was written by

Bret Jensen
46.08K Followers
Leader of
The Biotech Forum