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TOPIC: Calhoun´s Business Strategy

Calhoun´s Business Strategy 17 Jun 2014 07:11 #1795

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I was just thinking today about where we are at with Cytori and the "disconnect" there is in respect of the true value of the technology and the value apparently perceived by Wallstreet, which is low - very low- basically because there have been X- changes in strategy and X- ways in explaining what is going on.

Contrary to what the average investor knows- BARDA and ATHENA- there is much more.
Last year Chris Calhoun wrote me a letter, explaining all that. I was the wrong recipient, since I knew all that stuff already- since he will be gone in 2 weeks and there are no personal things in the notes, I thought it would be nice to publish it partly (in two issues)

TODAY THE FIRST ONE: BUSINESS STRATEGY- This is Calhouns text- not mine although it might "sound" like me

Cytori´s strategy is right and as follows:
Part 1 – tool claims that provide open access to point of care cell therapy via adipose [concept: make cells from adipose tissue the cells and source of choice for regenerative medicine versus bone marrow, cord blood, peripheral blood, ESC, iPS, etc :: Think INTEL Inside – we think we will own point of care processing of adipose tissue and the more demand and "standard of care" - the better we will do] . For Part 1 Strategy – we started with a tool claim CE Mark years ago in EU and have been working to expand our claims to therapeutic claims which are more narrow and specific – breast reconstruction, augmentation, fistulas, wounds, diabetic wounds, burns, radiation, etc and with vascular –start with broad claims vascular use (again more tool claim than therapeutic) and then work to narrow – AMI, CHF, Chronic Ischemia, Limb Ischemia, Stroke, etc. This is the same in the US –we pursued 510k pathway for tool claims and FDA shot that down (we are fighting it but not that relevant). And in Japan – recently achieved Class 1 approval is the tool claim equivalent in Japan to 510k or EU tool claim CE Mark. Strategy
Part 2 is to develop therapeutic specific claims (where the bigger value comes in).
Part A – company sponsored trials and visible pipeline – breast reconstruction, acute heart and chronic heart moving toward some soft tissue specific therapeutic claims in US funded by BARDA and breast reconstruction approval Class 3 in Japan based on Restore 1 & Restore 2.
Part B – Investigator led work that has the opportunity to help expand therapeutic claims (like in Europe, maybe Japan) and establish a knowledge base and clinical experience around specific indications to leverage directly into advanced / pivotal trials where needed (like the US). It's a great R&D multiplier while in parallel "designing our technology in" to the clinical world so that the new regenerative clinical approaches utilize cells from adipose as the foundation of their regenerative therapies. Again – we want to set the standard source for the coming age of cell therapy to use Adipose vs everything else – think MicroSoft Operating System vs all the others… This is very evident today – whereas just a few short years ago (you likely remember this) everyone laughed at us bc we were so different and broke all the existing paradigms – so we must be wrong. Today – by far the leading source of cells used clinical around the world is from fat. The clinical world is already defaulting to cells from fat because it works, because it's safe and because it fits in all other categories – workflow, cost, easy of access / use, autologous, multiple cells = multiple mechanisms, point of care, real time therapy, etc etc.
The following user(s) said Thank You: Joncon63, d9dozrman, fatboy

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Calhoun´s Business Strategy 17 Jun 2014 13:47 #1796

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Fas...I dont think you can blame Wall St for a massive, high paid upper management, nearly a dozen directors and very minimal sales..let alone years of milestone projection failure. Oh yeah, rarely more than 6 months from BK with cash.
Given such statements valuation seems plausible.

So until some form of additional validation comes that this gets beyond the early stages we languish.

Maybe BARDA helps.
A real Big Pharma partnership helps even more. So far...all we have accomplished is selling peices of ourselves to get relatively small deals done.

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Calhoun´s Business Strategy 18 Jun 2014 09:16 #1798

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Hedge-

I am NOT blaming Wallstreet- see " basically because there have been X- changes in strategy and X- ways in explaining what is going on.".

Their actions are predictable- they do not pull 2 -3 years spreadsheets if you say " I am a Biotech" like they do with MesoBlast etc.

Than they make 5-10 years out spreadsheets like Nomura do.

Cytori said however already in 2007/8- that they gonna enter the cosmetic market in Europe and would sell over 250 Mio of cryo banks untill 2011.

THAT IS THE PROBLEM- unreliable

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Calhoun´s Business Strategy 18 Jun 2014 10:08 #1799

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Basically - what I am saying is-

Cytori is and always has been a development Company as laid down and described in Calhoun´s business strategy definition above.

They have entered many "strategic cul-de-sac´s" and have confused Wallstreet accordingly.

The revenues achieved so far are "simply a by-product of the business strategy"

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Calhoun´s Business Strategy 18 Jun 2014 11:29 #1801

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Fas was going to reply to your earlier post focusing on this sentence :Class 1 approval is the tool claim equivalent in Japan to 510k or EU tool claim CE Mark. Strategy. You expressed in a later post exactly what i was feeling. The CE mark in Europe has generated absolutely nothing in terms of revenue. It is a joke as CC had said that revenues from Europe alone would have Cytori at break even. Focus at that time was on all the revenue that would be generated in cosmetic breast construction alone. It has produced zilch, zero, nada in revenue nor is there a partnership deal that has happened based on what could be, so of course we headed into a culdesac .(love the analogy)
Japan which was to generate revenues soon after the new law and the 501 has produced similar results. I just don't think that Cytori investors can be so smart and all the rest of the world is missing this. Perhaps it's time for us to admit we have been Calhouned.
perhaps the new catch phrase will be SAADOMIZED, and Hendrik' Manuvered . It just keeps getting worse.

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Calhoun´s Business Strategy 18 Jun 2014 12:54 #1802

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***The revenues achieved so far are "simply a by-product of the business strategy"***

Agree

So what is changing to take advantage of the new rules in Japan ?
Will we go it alone for all those SUI patients in Japan who will be happy with a average 12cc of daily leakage ?
Maybe we are waiting for enough radioactive fish to make through the Japanese pallet for a new market that someone is actually interesting in partnering !!!

With Lorem, why does Hedrick always talk about China but ignore the more developed market of Australia ?

Some time ago we disagreed when I said CYTX needed another 90-100 million to bring this to the masses. If we float the 40 million thru Cowen...we will be pretty close to those numbers and I am not seeing how even then, that the burn ends.

Management still throwing darts hoping something sticks and we get some traction...that remains the business strategy !!!

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Calhoun´s Business Strategy 19 Jun 2014 08:48 #1804

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The key of this all- being a device Company- after receiving a specific therapeutic claim, one does NOT have reimbursement, which normally is a procedure with separate EU (not harmonized) health authorities and takes 3-4 years. Obviously Cytori learned its lesson with the breast augmentation and reconstruction apps and either need a partner to market without reimbursement or can do this themselves if they have this reimbursement.

The silence by Cytori on this issue is deafening and an insult to the intelligence of its shareholders.

The key with the Japanese situation obviously is, that the approval is "linked" to reimbursement at the same time.

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Calhoun´s Business Strategy 19 Jun 2014 09:48 #1806

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Fas, so without reimbursement then there is no ability to generate revenue and without a partner cash will dry up as evidenced by our history and recent raise of 10 million. The mystery is why the partnerships are so illusive and why it is only shareholders that appreciate what we believe Cytori has. The deafening silence and treatment of shareholders is absolutely insulting and I could not agree more. In addition the top heavy management and a VP of sales who I am not exactly sure what he does but it is not selling is insulting as well. Options for non performance another insult. Lloyd deans 10 times your wildest dream and if I were a betting man i would double down ,takes the cake. What COB would ever say that to shareholders and be able to face them. Oh! i forgot he can't face them as he resigned that position. Nor could our CEO who also resigned after insulting our intelligence for years. Are we insane to believe that things will ever be different ? Is the current management team as it stands capable of ever monetizing the science. You can't eat potential is what I always say. Will BARDA be a reprieve or the final nail in the coffin?

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Calhoun´s Business Strategy 19 Jun 2014 09:57 #1807

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Fas...you know I agree on the reimbursement front as I have shared my thoughts on it many many times.

....but it brings us back to either cash , which we have little, or partners, which we fail to attract in these geographic areas. Its one giant circle !!!!!!!!!!!!! :bash: :bang:

In japan, even with reimbursement, going alone will cost $$$$$....so is part of the $40 million we may get thru Cowen going to Japan to try to ramp sales ? We could easily blow that money elsewhere...so the circle continues. Partner or burn cash as even in Japan there will be a ramp before sales really take-off enough to stop the bleeding.

News yesterday on ACL trial in Spain enrolled....full results looks like about 14 months out. Will we get interm results ? Will we wait beyond 14 months for the right setting to hear the investigator cap off his work in a conference or published paper ?

Still searching for the end of the burn and I believe much of Wall St is as well.

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Calhoun´s Business Strategy 19 Jun 2014 10:00 #1808

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Whoops...looks like I am echoing rothco as I guess he posted before I did but its shows how long we still have to go.

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Calhoun´s Business Strategy 19 Jun 2014 11:15 #1809

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Great minds think alike hedge. LOL

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Calhoun´s Business Strategy 19 Jun 2014 11:40 #1810

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All in all I certainly have NOT given up on Cytori at ALL and it is very very unlikely that I ever will, since chances for the technology to be disruptive and SUCCESSFUL i.e. adopted, are still very high IMO.

Short term- yes, I think BARDA has nothing to do with money but confirmation of the validity of the technology and might help convince some potential partners of the same.

The investors note from last night for instance I interpret as the Sports medicine deal still being a HOT item.

As mentioned before- CC will not be the last one in the "clean up" process of Dickey and more changes will come and someday a new CEO.

In view of the Japanese situation and basically also the European situation (?????) revenues of significance might SUDDENLY be upon us before we know. The BIG question will be- how will Hedrick improve shareholder communication going forward.

Time will tell :cool:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

Calhoun´s Business Strategy 19 Jun 2014 18:05 #1812

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Agree

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