Chris Calhoun Stepping Down, Marc Hedrick Stepping Up
Ø Cytori announced that Chris Calhoun will retire from the position of CEO of the Company, effective immediately. The Board of Directors has named Dr. Marc Hedrick to the position of CEO, in addition to his current responsibilities as President and Director. We expect this to be a seamless transition as we have always viewed Chris and Marc as interchangeable soles, in Cytori’s mission to bring a cell therapy to the marketplace. We will miss interacting with Chris as we enjoyed his passion and experience in this space.
Ø We remain focused on solid fundamentals as highlighted in the reported quarter last week:
o Activated enrollment in all eight ATHENA sites and first ATHENA II site
o Achieved all three planned contract milestones related to BARDA contract
o Achieved FDA Investigational Device Exemption (IDE) approval for a hamstring injury clinical trial
o Received Intravase CE Mark approval to enable vascular use in the EU
o Received marketing approvals for the Celution System in Australia, Serbia, and Singapore
o Divested non-core Puregraft product for $5 million upfront and up to $10 million in future royalties
o Formed commercialization partnership with Lorem Vascular
o Refinanced term loan to extend maturity to 2017
2014 Operating Goals: (from Cytori):
o Complete ATHENA enrollment and make substantial enrollment progress in ATHENA II (both trials have begun)
o Publish long-term outcomes from European PRECISE trial
o Advance BARDA contract into the next phases, including a U.S. feasibility trial and expanded research and development
o Achieve approval for the Celution System in China
o Grow research product sales in existing and new markets through new partnerships and recent changes in Japanese regenerative medicine law
Ø Please see our next page for: “A Few Key Points that Investors Should Consider,” a detailed review of our positive rational on Cytori in 2014.
Ø Valuation. Basing the valuation on our assumptions in CMI (we expect 2020 EPS of $11.04) and discounting back at 30% yields a $10 price target.