Lisata Therapeutics Inc (LSTA)

[duncin_roy]

Small Capitalization Revenue Leader in the Stem Cell Sector

In a sector that has just last year had its first regulatory approval via Osiris Therapeutics' Prochymal for GvHD in Canada in May and then New Zealand in June, much hope is beginning to emerge in stem cell treatment for many diseases and injuries. However, despite its newfound successes, the sector still suffers from a lack of revenue generation with only Osiris even having a marketable product, albeit for a small indication. Due to the revenue generation issues in this largely development-phase sector, one small pharmaceutical rises to the top not by having the most promising therapeutic product in its pipeline but by being the most solid revenue generator of the sector.

NeoStem (NBS) has a revenue-generating division described as a contract development and manufacturing organization (CDMO). The division's name is Progenitor Cell Therapy (PCT), a cell therapy manufacturing and storage facility. PCT provides cell therapy products for both the immunotherapy and stem cell sectors of biotech, and has had a number of new clients added to its customer base in 2012 alone. These clients include: Baxter International (BAX), to produce a phase 3 CD34+ stem cell therapy to target chronic myocardial ischemia, an expanded partnership with ImmunoCellular Therapeutics (IMUC), to produce ICT-107 for its phase 2 trial to treat the brain cancer GBM, and on July 16th it announced an agreement to produce cells for a pivotal phase 3 trial with SOTIO, LLC, for its dendritic cell prostate cancer vaccine.

With its ongoing successes via obtaining new clients as well as the possibility of producing products for marketing rather than just for clinicals, 2013 could be an exciting year for PCT. To add a speculative nature to an investment in NeoStem, it does have its own stem cell product candidate that is now in phase 2 clinicals in the form of AMR-001, to prevent major adverse cardiac events following acute myocardial infarction (AMI). Enrollment completion is expected in early 2013 with interim data sometime in 2H 2013. Although the company's current revenue generation is a growing and increasingly successful reality, a stem cell therapy that could address the large market potential of AMI with over 800,000 cases annually could be a significant and share-price moving event for the company. NeoStem estimates an approximately $1.2 billion target market for AMR-001 in AMI, if clinical trials prove to be successful. Interested investors should perform research into the company, starting with the company's Q3 2012 earnings and then evaluating revenue growth via PCT over the last couple of years.

Please note that NeoStem should still be construed as a development-phase company as it has no clinical products marketed, and the company is still operating at a loss, although I expect it to reach profitability soon based on its PCT customer base growth. The revenue is highly significant as it leads the sector and helps to fund company's clinical candidates, thereby reducing the need for investor funding. One of my favorite sectors to invest in and write on, please perform additional research on this company and the rest of the sector to more fully realize the possibilities of not only this dynamic company, but others in various stages of clinicals with multiple indications targeted. The stem cell sector is exciting and full of promise. It continues to validate itself with clinical data and patients' stories of success past, present and likely future. I anticipate more regulatory approvals coming soon and look forward to seeing the first U.S. marketing approval in the near future.

http://seekingalpha.com/article/1118281-top-of-the-class-small-pharma-investments-for-2013-part-ii