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TOPIC: When the razor, razor model works

When the razor, razor model works 18 Apr 2017 16:22 #9191

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ISRG $787 at one point AH's

Once dreamed Cytori could have followed that dream.
Of course they raised the proper funding early and never suffered constant dilution as their sales rose. Seems their product has actual demand ! LOL

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When the razor, razor model works 18 Apr 2017 18:25 #9192

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Hedge

One could also blame Calhoun and Saad's pursuit of a big dream in the Cardio indication with the hope of landing a big partnership. Actually, many investors including DOV thought that pursuit would work out OK (since it is a big, big money making venture) and CYTX should not even partner out in the beginning.

Yet, no partners came and many investors went directly to meet with Dean to press for more diligence.

I think the cardio indication which is now inactive has drained out tons of money, which has forced the company to go after niche indications.

I think we are very lucky to find CYTX's celution system works well in moderate scleroderma and the Raynaud's for the US market. The outstanding results in the Raynaud's would really expand the Habeo universe- 20X bigger than the localized scleroderma (Botox had been tested in a randomized Raynaud's trial and failed).

I think Hedrick is planning to expand the Habeo universe further (in second generation development), by encapsulating regenerative medicine for various immuno illnesses related to systemic scleroderma. The acquisition of AZA opens this door, while doxo and taxorine are icing on the cake.

Hedrick, I believe, is not a communicator and Tiago is simply a good accountant with limited know hows in Wall Street and medical sciences (very different from our FAS). The head honcho at ATHX is good to sell the company to Wall Street. I wish we have such a man at CYTX. Hedrich would do his old job better.

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When the razor, razor model works 19 Apr 2017 07:39 #9193

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I debated whether or not to post this letter that I wrote to Dave Rickey back in late March. I never heard a word from him. Not surprising since I challenged his criteria for decisions made. This is why I believe a regional scleroderma partnership failed prior to the Star data and caused the need for a secondary. A deal like this is cheap six months ahead of the data and more expensive (for the partner) as time draws near. At some point you have to just stop negotiating and wait until after the data to get your price. That price so far has cost the stockholders 36% dilution or roughly $10 million. That is probably twice the upfront cash that was on the table. You can't get that dilution back....ever!


Dave,

We do not communicate very often, but I have copied you on papers I have sent out to my list of investors that I introduced to Cytori as far back as 2010. This particular update attempts to convey a certain level of faith in the Board of Directors and for that reason, I thought you should receive a copy.

Best wishes,


XXXXX

I was told that Cytori and Azaya have been collaborating for more than a year. I do not know what that means since I read in the 10-K that Azaya stopped operations in late 2015. It took them a year to get a term sheet with a mid-sized pharmaceutical company that was purchased by Pfizer a week or so before the deal was to close. Pfizer killed the deal for competitive reasons. The purchase price seems incredibly cheap if they are as far down the road as they say. Roughly, Cytori paid $16 million ($2+$2+$6+$6) for a revenue stream of $15 million per year starting in 2019 with upside.

At the time the BOD approved the acquisition, they knew getting an OA partner was not going to happen any time soon. They knew the MAP program was not going to generate any revenue and they knew reaching a break-even cash flow in late 2018 even before the FDA approval was not going to happen. Japan was growing, but not enough to fund anything. Also, principal payments of $1,475,000 a quarter on the debt were starting. The company secured a stock purchase agreement with Lincoln Park Capital and still had some availability left on the ATM. But these sources of capital put the burden on individual investors who own 86% of the common stock. During the rights offering, we discovered there were over 15,000 investors in Cytori that owned less than 10 shares. The rest of the stock seems to be owned by medium to high net worth individuals who have losses in excess of $100,000 to well over a million. The company has not been successful in finding new investors of any size. In summary, the BOD approved the Azaya acquisition knowing it would increase the cash burn to $29 million in 2017 alone and the funding for this would come from skeptical and disgruntled individual stockholders.

In my view, there is only one bit of insider knowledge that would permit the BOD to approve this acquisition at a time of such financial weakness. Last fall, Maxim hosted an investor day with Cytori management present. During this meeting, a video of several women who had been treated in the SCLEREDEC I trial was played. It was subtitled because they spoke French. All of them stated they began noticing a dramatic improvement in their hand function within a few weeks of the injection. There is no placebo effect with scleroderma as there was in the ACT-OA trial. Two of the SCLEREDEC I patients showed no improvement because their condition was too far-gone and amputation was close. None of the 88 STAR participants were at this stage of the disease. The Primary Outcomes Measures of the STAR Trial were Cochin score at 24 weeks with secondary measures also at 24 weeks (Raynaud's Condition Score and SHAQ). The BOD knew this data at the time of the Azaya acquisition approval and I believe it was so compelling, they approved Marc Hedrick’s proposed acquisition.

Without any proof, I believe the ATM has risen close to a million dollars prior to the share registration for Lincoln Park. The company needs to raise enough capital to survive until mid to late July when the 48-week STAR data will be made public. The gamble here is that institutional investors will (for the first time) aggressively buy the stock based on the "P" values and the likelihood of FDA approval. If this does happen, Lincoln Park will be able to sell shares into this strong demand and the company will be able to raise the $29 million needed to survive another year. In actuality, the company will need to raise closer to $50 million before insurance reimbursement revenue is sufficient to fund operations. In addition, I do not believe Cytori will be able to find a suitable partner for any of their applications prior to the STAR results. Once the company accomplishes this major milestone and establishes the credibility of the technology, they have a chance to attract a partner.

So, for the next four months, we wait. I do not expect any exciting news until the STAR data. Barda news has never moved the stock price and that is the only known pending event slated for the spring. This is the best I can do to explain the current situation at Cytori. Given all of the public information, it is the only scenario that makes any sense.
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When the razor, razor model works 19 Apr 2017 09:28 #9194

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franshei
I had a reply for you last night but I timed out again and this time forgot to copy it before trying to post.
Anyway, we both know the history here but I did lay out a series of steps and chances for valuations that should take place up to FDA approval. Anyway If they get FDA approval imho $400 million market cap with +/- midigating factors should be fair.
Example of a positive factor would be positive happenings with doxo
Example of a negative factor would be debt and cash levels.
I am sure there will be others at the time

DOV
***During the rights offering, we discovered there were over 15,000 investors in Cytori that owned less than 10 shares.***
Lucky Bastards ! LOL
Otherwise, thanks for writing the board that the rest of us are following their actions closely.
Do you plan to attend this years annual shareholder meeting ?
I wonder if you would like to give feed back beyond the stale voting roll call ? It should have a interesting vibe.

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When the razor, razor model works 19 Apr 2017 09:39 #9195

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What about the possibility that "insider knowledge" told a story of dire circumstances in need of a magic rabbit to be pulled from a hat because nothing under roof has proven to work well enough? How you're managing to put a positive assumption upon anything Cytori is beyond me. You have great data coming from a phase three trial, yet no seething partners? Anywhere? Seems you'd have to work your mind too hard to come up with a positive here. Is the data really that great? You have an acquisition opportunity to buy a company that also could never land a partner, and you buy it? Seems only a desperate man would buy dirty water nobody else wanted to drink -- especially when it's just been sitting idle for over a year. And clearly Cytori is parched and starving. Once again, it seems certain posters here are tied to strings of hope, trying to tie lose and dead ends together to come up with some farfetched possibility of something positive. I haven't heard a positive fact from this company aside from the subtle progressions in Japan. Believe me, I hope you optimistic posters are correct. Yet, to say optimism could currently override my factually based caution and well deserved disdain for inept management, would be an outright lie. A spade is always a spade.

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When the razor, razor model works 19 Apr 2017 09:54 #9196

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Thanks DOV and Hedge,

DOV's letter confirms my literature search (as time is getting closer to the STAR readout), the placebo effects in OA and localized scleroderma treatment. OA placebo effects are significant and well known in other randomized trails, while placebo effects for similar types of clinical studies are minimal.

Actually, the current scleroderma STAR study design has been very. very well thought/planned. Many other trials were done with one hand treated and the other hand receiving placebo - not a good design, if the treatment would affect other related bodily tissues/organs/functions to exert a placebo effect. The choice of Ringer's lactate or saline as placebo is simply blessing in the sky. If the placebo contains Coleman's macro fatty components (just like putting hand cream subcutaneously) or any fatty "excipients" - then Holy Mother of God, I can bet significant placebo effects. The choice of subcutaneous dosing is simply great.

Limited data from any stem cell therapy for local treatment of alopecia also indicates stem cell therapeutic benefits and bears good lead to what is expecting in the scleroderma STAR trial. Wound healing data is also very useful.

In the midst of all these searches, I suddenly realized the importance of 1. autogenous stem cell sourcing and 2. time lapse from stem cell harvesting to treatment. CYTX's treatment procedure for OA should be better than other stem cells therapy, if the stem cells would stick around the knee joints, in the case of OA. I really think the combination/mixing with liposome just before local dosing could make a big difference.

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When the razor, razor model works 19 Apr 2017 10:01 #9197

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Franshei --

Perhaps what you're hoping to happen, say, what, two or three or four years down the road for Cytori, has already been approved for knee OA. Of course cells need a mechanism for attaching to suffering conditions.

It's already FDA approved.

globenewswire.com/news-release/2017/02/01/912823/0/en/Vericel-Announces-First-MACI-Implant-in-the-United-States-for-the-Treatment-of-Symptomatic-Cartilage-Defects-of-the-Knee.html

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When the razor, razor model works 19 Apr 2017 14:39 #9199

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waddlingwillbologni wrote: Franshei --

Perhaps what you're hoping to happen, say, what, two or three or four years down the road for Cytori, has already been approved for knee OA. Of course cells need a mechanism for attaching to suffering conditions.

It's already FDA approved.

globenewswire.com/news-release/2017/02/01/912823/0/en/Vericel-Announces-First-MACI-Implant-in-the-United-States-for-the-Treatment-of-Symptomatic-Cartilage-Defects-of-the-Knee.html


Waddling- we know Carticel now for what- is it already 15 years or so? It was blasted by the FDA by Genzyme within a year, after the take-over by Sanofi of Genzyme sold for an apple and an egg in combo to Aastrom now Vericel.

Believe me- chondrocytes injected or in a matrix will hardly make a difference.

My request- leave the animosity and be patient for a month or 3-4 - than either be happy or scold. Now does not seem to be the appropriate 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:

When the razor, razor model works 19 Apr 2017 14:49 #9200

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As I posted earlier today on the YMB, little has really changed market cap wise...we were about $ 30 million just before the big run followed by immediate dilution and we are at $30 million market cap now.
I believe there was some decent short covering yesterday as well.
Lets see where they close the week.

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When the razor, razor model works 19 Apr 2017 16:15 #9201

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Fas wrote:

leave the animosity and be patient for a month or 3-4 - than either be happy or scold. Now does not seem to be the appropriate time.


Fas,
I understand your frustration with the negativity here but the fact is that last year at this time CYTX was trading at $4.35 and today it is about a dollar. In the last two months the shares went from $1.80 to today's close of $1.02!!! The fact is this company is a train wreck and the actions they are taking are suicidal. Adding debt and cash burn. Continuing toxic financing. The list of failures grows by the week. So it is very difficult to be patient when confronted with these realities.

There is room here for both the optimists and the pessimists. The fact that the company continues to survive is certainly a positive. The facts speak for themselves as do the comments of the members of the lodge. No more and no less.
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When the razor, razor model works 19 Apr 2017 20:03 #9202

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Have to agree with Fatboy, it's refreshing too see opposing points of view especially when one considers the past year performance of the stock as he pointed out however, FAS's post appears to me as a correction on the technology that Wadd posted up.

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When the razor, razor model works 20 Apr 2017 00:20 #9204

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b767cpt wrote: Have to agree with Fatboy, it's refreshing too see opposing points of view especially when one considers the past year performance of the stock as he pointed out however, FAS's post appears to me as a correction on the technology that Wadd posted up.


Exactly- I consider myself one of the "lead-singers" when it comes to "articulated" criticism of Management Performance and sometimes even not so articulated but emotional. I understand that all pretty well and have no problem allowing that, since we really are singing in that respect in a rather big choir. Even DOV tunes in as "soloist" occasionally.

I am not spending a lot of time correcting other folks´posts anymore- but if you do criticize the choice of applications by Cytori management and come up with "competing (:grin: ) chondrocytes for OA or whole mononuclear bone marrow cells for cardiac, folks really do not know what they are talking about and should stick to the general Hedrick-scolding.

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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:

When the razor, razor model works 20 Apr 2017 07:16 #9205

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Waddling,

In case you didn't notice, I think the Azaya acquisition was foolish. I have only a layman's understanding of the technology so my belief is solely based on the timing and the lack of funds to pay for it. That is pretty clear in my letter to Dave Rickey. The funding has not materialized nor has an non dilutive or less dilutive funding since the Lorem disaster. The only thing Hedrick has done well while at the helm is the STAR trial. The ACT-OA trial was not powered for statistical significance and therefore was a complete waste of time and money. It should have come later, not first.

The STAR trial is powered for FDA approval. Hedrick was able to get the FDA to accept the SCLEREDEC I data to substitute for a US based pilot trial. The fact that the FDA permitted a Phase III trial as the first step in the approval process has been overlooked by the investment community. As Franchei stated, the STAR trial was very well designed. Obtaining Orphan drug status and getting the Small Business designation from the FDA was Hedrick's doing and he should get full credit for that. However, his inability and unwillingness to promote the company to major Wall Street investors has been reflected in the perpetual underfunding of the company. The stock is down 99% because Hedrick was never too worried about getting funding. His MBA isn't worth the paper it is written on.

There is a lot of factual science behind my optimism for the STAR results, however, I am very concerned about Hedrick's ability to run a business. A good leader knows his/her weaknesses and hires the right talent to compensate. I haven't seen that yet either.
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When the razor, razor model works 20 Apr 2017 09:01 #9206

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I do hope you are correct regarding the Star Trial, kind sir -- we shall see ...

Waddles

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When the razor, razor model works 20 Apr 2017 10:24 #9207

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Hedrick is becoming a topic for discussion.

Foolish long term investor are mad with him, because people has lost 99% of their money since the beginning of his reign. In similar situation with other companies, the leadership would have to change. Such a change would at least give an instant boost in the share price, but it may not last, if the basic problems with the company in questions are not resolved.

Intense corporate promotion without substance is no use either. ATHX is highly promoted. This head honcho, as well as the former CEO of GERN, are great examples of gifted silver tongues. Yet, Okama of GERN could not save the embryonic stem cells therapy of the company. In the case of ATHX, the stock is constantly under pressure, since people are still wondering if the clinical data in stroke would really be good enough for the FDA. The Blair promotion has its own limitation, since most stem cells therapies are not really what people would think originally. I personally think most stem cells therapies, particularly those for deep organ treatment (heart, deep circulatory systems as in the case of stroke, etc) may not really work particularly using allogenous cell preparations (limited by cell death, which maybe reduced by nanotech) under randomized clinical settings- are clinical responses really due to live cells or stimulating effects of micro nutrients, local rejection, needle action, etc. (I personally think CYTX with years of blunders and wondering around is on the verge of doing something right in the regenerative medicine -auto will not be replaced but something new is also coming with nanotech).

I think Hedrick has brought an honest face for the company, replacing the old face from University of Phoenix - Calhoun had tried to be magical, offering promises which would not fulfilled. He has been a snake oil salesman.

I think Hedrick is telling his bosses that real results, good understanding of what can really be done in regenerative medicine (he knows something for the application of nanotech that he has not disclosed) would count rather than the old way of doing business at CYTX.

I think he is telling us to give him one more chance: I wrote to Tiago recently, telling him that Hedrick is sick (just listening to his 4th Q CC) and his leadership is weak (just look at the stock price) and he should be replaced. Obviously, this kind of emails (from me and many others, I am sure) are now common daily event at CYTX. Yet, I have not received a reply, so are others. Still Tiago writes to me, but never mention OUR call for Hedrick's head.

This is a total madness for the past 3 years. But, just in my opinion, things will change soon.
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When the razor, razor model works 20 Apr 2017 17:14 #9209

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Back in the day, shorting GERN pops was a wonderful hedge against a CYTX long.
However, 12 years in, the smarter play would have been to just relentlessly bet against CYTX.

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When the razor, razor model works 22 Apr 2017 07:50 #9212

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Hedge, you do live up to your name.

So you are not just swing trading, you are also shorting all the way to ground zero (since there are thousands upon thousands of shares available at Interactive for shorting).

Surely, the long can learn from you and others to be defensive - this what I told FAS.

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When the razor, razor model works 22 Apr 2017 10:53 #9213

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Shorting this here seems like it would be like trying to pick up pennies in front of a steam roller.
Good data on STAR in July and shorts could get killed. Of course, they do have another three months to play with it.

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When the razor, razor model works 22 Apr 2017 19:36 #9216

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franshei
I am not positive but you seem a little mixed up.
Reread my post and get back to me :)

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When the razor, razor model works 22 Apr 2017 20:34 #9217

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Hedge many apologies for my mix up. So, what would be your game plan now with CYTX?

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