I think Jason Napodano says its best: Its all about what type of capital raise this company can execute. Just an FYI - the cost to bring LymPro to the market is not significant (many have posted here ..with drawing false conclusions). What worries me...a huge R/S...thats where we are tracking if Gerald continues to use equity financing....need to raise non dilutive funding now. The shareholders are tired of getting SCREWED!!!
Jason Napodano, CFA
The Big Conclusion:
We see Amarantus stock as a highly speculative call-option on the development of MANF, a potential revolutionary disease-modifying agent for the treatment of neurodegenerative and ischemic disease, with a mega-blockbuster sales opportunity. Aggressive and probability-adjusted discounting of cash flows pins the valuation at around $42 million, or around $0.11 per share. But we note the story remains highly fluid and volatile. Amarantus could be the investment opportunity of a lifetime if MANF pans out. With respect to LymPro, we see the diagnostic as a potential game-changer for the diagnosis of Alzheimer’s disease. Management is currently in discussion with GLP Labs to do the phase 2 work for CLIA approval. We expect an announcement in the next few weeks naming the lab. Assuming management can attract a big, wellrespected partner in the diagnostic market, the cost to conduct this trial (pay the lab) should be low – far less than
$1 million all-in. If successful, we see CLIA approval as a massive valuation inflection for the company, as LymPro
has potential peak sales in the $500 million range. LymPro today, based on all the available information we can find, is worth an estimated $40 million, with NuroPro worth another $10 million. As such, the entire diagnostic division is worth an estimated $50 million, or roughly $0.13 per share in our view. Summing up the two divisions, we see Amarantus Holdings worth between $80 and $100 million in value, or around $0.25 per share based on a current share count around 385 million. We believe the company will seek to raise between $3 and $5 million in cash over the next few weeks to sure-up the balance sheet and push forward
development of both MANF and LymPro. We believe management is looking to bring on long-term, quality institutional investors. The company has made significant effort to clean up the balance sheet and remove the stigma that Amarantus is just a penny-stock with no hope or no future. On the contrary, this company may have one of the brightest futures in all of small-cap biotech. They just need to get over the hump that is funding and waiting the data. We are Neutral on the stock with respect to our rating, but note massive upside to the story if things all play out the way we believe there is a good chance they do for both MANF and LymPro.
