By Jason Napodano, CFA SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning.
1) The wound care market is highly fragmented, with no major player holding over 25% share. Prior to CMS packaging, which has taken effect in 2014, market share was driven by a combination of active and aggressive promotion from some of the industry’s top players and economic incentives from physicians.
2) The changes instituted by CMS in November 2013 for wound care reimbursement will have a dramatic and profound effect on new market share starting in 2014. Past leaders, Dermagraft and Apligraf, each having posted over $100 million in sales in 2013, will see their business struggle in 2014 (note that Shire has divested Dermagraft and privately held Organogenesis recently slashed its staff).
3) High quality data are lacking in the wound care market. Most data are retrospective and randomized controlled trials are small. Cytomedix ( CMXI) is currently enrolling four clinical programs with a goal to have data on over 2,500 by the end of 2015. We believe additional programs are planned. This will help the company dramatically increase awareness for AutoloGel in the coming quarters.
4) Cost will play a much bigger role in the sustainability of wound care products than ever before thanks to CMS packaging. We believe AutoloGel has >70% gross margin under existing pay rules for HOPPS and PFS, and that should allow Cytomedix ample profitability for active promotion and favorable economics to the wound care professional. This should allow Cytomedix the opportunity to gain sizable market share in the coming quarters.
AutoloGel Poster Shows Impressive Results
At SAWC, Cytomedix presented at posted on Saturday, April 26, 2014, entitled, “Platelet Rich Plasma Gel Consistently Reduces Pressure Ulcer Size (Poster No. CS058, Carelyn P. Fylling, RN, MSN, CWS, CLNC Vice President, Professional Services and Laurie Rappl, PT, DPT, CWS Clinical Specialist – Cytomedix, Inc.). The purpose of the poster was to demonstrate that AutoloGel (autologous platelet rich plasma) could provide an effective topical treatment for difficult to treat pressure ulcers.
We present the key findings from the analysis. Cytomedix presented the data on weeks of therapy and number of AutoloGel treatments.
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