Following excerpted from the above conference certainly seems to play to the Celution Product BARDA is evaluating and Cytori business model opportunity:
DR. MANNING: So that's a great question. You know, what's the value proposition? What we can do at BARDA is we can underwrite, or at least partially underwrite the cost of R&D. So if we can do that successfully, we've created, hopefully, a product that is competitive in the burn marketplace. Now, we agree, that's not a huge market. But at least the R&D cost has been defrayed and you're now in a sales mode.
What we also hope, and it depends on the product, is that the products can be used for other things, other skin problems beyond just burns, okay? And so, that would be very attractive to us because that would then widen the clinical utilization of the product and allow us to leverage even more.
But you're right. At a minimum, you've entered the burn market as a competitive player. And we realize that isn't for everyone. There's still not an incredible billion dollar market out there necessarily. But the best we can do right now is to support R&D, support that next generation, and hopefully create products that are competitive.
DR. JENG: Jim Jeng. I wanted to add to your commentary, Ron. Burns is indeed a very, very small market. I'm Jim Jeng. I'm one of the burn surgeons in Washington, D.C.
But as industry looks at this problem from a financial point of view, it would really be enlightening and inspiring for industry to realize that the wound care, the chronic wound market is a gargantuan market with huge financial implications and that the cross-talk, like Dr. Manning referred to, with burn care products -- you know, and you think burn care products -- as a wound care market is 80% overlap, and there is your cash cow in the private sector business world.
Well the market seems to think the current 8.4% annual distribution is unsustainable. EPB is probably a current fair value at half that payout rate. The recent 80% BWP distribution cut has also shaken some week hands.
The other speculation is that EPB will be rolled into KMP at its current discount. KMI's 50% ownership of EPB units and Richard Kinder's recent purchase of 100,000 units of EPB seem to say otherwise. I expect some KMI drop downs to improve EPB's growth picture