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Neostem, Inc. Message Board

  • franwurl franwurl Apr 16, 2014 11:40 AM Flag

    Is Financing a Problem?

    How will NBS finance the extensive studies that are pending?
    • “In 2014, NeoStem plans to initiate a Phase 3 study for Melapuldencel-T with a primary endpoint of overall survival.” Cost estimated to be 25 million by management.
    • “Completion of enrollment in Dr. Bluestone’s Phase 1 trial for type 1 diabetes trial using Treg cells.” Estimated cost 2 million.
    • P2 study of Tregs for Type 1 diabetes. Cost to completion in 2015 estimated to be 20 – 25 million.
    • P3 study of AMR-001 assuming P2 results are positive. Estimated cost 25 – 30 million to completion in late 2015 early 2016.
    • Initiate a Phase 2 chronic heart failure trial in CD34 Cell Program. Estimated initial cost 5 million in 2014. Cost to completion 20 -25 million in late 2015, early 2016.

    Estimates are mine except for P3 study for Melapuldencel-T. From the FY 13 report, “Overall, there were ~50% more active clients compared to 2012. Year-end cash balance was $46.1 million. Operating expenses were $38.5 million compared to $32.8 million in 2012.”

    NBS does not have enough cash to conduct all these studies without the help of a major partner unless management was suicidal. A secondary offering in the immediate future at these depressed prices makes little sense. Therefore, a partnership with a major pharmaceutical has become absolutely necessary and will likely be made in the near future.

    The announcement of a partnership will lead inevitably to a rise in pps as would positive AMR-001 P2 results, and then assuming a secondary offering follows there could be sufficient funds to carry out remaining studies.

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    • NeoStem had ~$50 million at the end of November, 2013. They made the statement at that time they had sufficient capital to fund operations through 2014, and into 2015.

      The acquisition of California Stem may have altered that outlook. While "funded into 2015" may well be optimistic with the planned new clinical trials , there's no reason to think operations can't be funded with cash on hand, and the continually growing income of the PCT division, much further into 2014.

      The wisest course, assuming NeoStem requires additional capital, is to wait until the release of their Preserve AMR-001 phase 2 results this summer. Anecdotal reports have been excellent (search for "WBTV stem cells"), and there's every reason to believe the anticipated good news will drive the share price up.

      NeoStem would need to sell far fewer shares at ~$16, than at $7.

      Sentiment: Strong Buy

    • you better believe it !!!
      no money coming in and a ton going out !!

      Sentiment: Strong Sell

    • Good post..spot on.

    • NBS should run out of all the money they raised in the last public stock offering. you know the one ? Where Robin sc rewed all long shareholders at the time and priced the offering 38% below our trading price. I will always thank her for such a wise decision. At that point in time it was strongly suggested that NBS would need another public offering between June - September of this year. Thats not considering any monies needed to make the new purchase.

      • 1 Reply to wgbox67
      • Wgbox67, I remember that round of financing with considerable discomfort. I was not a happy camper with the offering about 40% below market. With all the ambitious trials that are now pending, financial relief of some sort seems needed before the June - September period. Anticipated cash outlays have escalated rather than being cut back. Since I assume management is not suicidal and in desperate need of psychiatric help, what relief can anyone envision now outside of a major partner riding into this setting as a White Knight?

 
NBS
5.98-0.03(-0.50%)Jul 23 4:00 PMEDT

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