Join our smart investors - Get the best stock directories in  blockchain, cannabis, crypto, AI, IoT, cleantech. Daily podcasts in cannabis and crpto. Just $99  a year

A New Breed of Regenerative Therapy Companies Taking Hold

Source: Hunter Diamond, CFA for Streetwise Reports

 

December 11, 2017 (Investorideas.com Newswire) A regenerative therapy company with expertise in both cell therapy development and manufacturing, and a potential treatment for diabetes, differentiates this company, says Hunter Diamond, CFA, CEO of Diamond Equity Research.


Orgenesis Inc. (ORGS:OTCQB) is one of a new breed of regenerative therapy companies with expertise and unique experience in cell therapy development and manufacturing. The company has two primary subsidiaries, its Contract Development and Manufacturing Organization (CDMO) and Cellular Therapy Business (CTB). MaSthercell SA, a subsidiary of Orgenesis Company, is at the heart of Orgenesis Global CDMO operational network and focuses on cell and gene therapy development for advanced medicinal products. The CTB segment is developed in Europe, Asia and Middle-East under the lead of Orgenesis Ltd. and is developing a unique trans-differentiation technology platform (cell reprograming) with a main lead indication in insulin-dependent diabetes.

Orgenesis provides investors with a way to invest in the growing cell-therapy market, without the concentration risk of investing a single cellular therapy company. MaSThercell is currently working with numerous leading immuno-oncology corporations looking to develop the next cell treatment therapies. Orgenesis Inc. reported strong top-line growth in Q2'17, with its revenue growth over 24%. The CDMO business will continue to generate immediate and robust cash flow, which can offset clinical costs and research and development expenses. What makes Orgenesis unique for biotechnology investors, is it has both growing recurring revenue through its manufacturing activities and massive upside if their diabetes solution is commercialized.

Industry Insights

Cell Therapy is the administration of living whole cells to the patient for the treatment of a disease, including regenerative medicine and immunotherapy. Cell therapies can be divided into two general classes: allogeneic and autologous. In an Allogeneic procedure, cells collected from the donor are placed into and utilized to develop at treatment for another patient (the recipient). Situations, where the donor and recipient are the same people, are called autologous. Orgenesis CTB focuses on autologous cells, which have a low chance of rejection by the patient. MaStherCell has built a strong expertise in both autologous and allogeneic segments.

CDMO: Strong investment activity and deal-making have occurred over the past few years within regenerative medicine, with the regenerative medicine market projected to reach $53.7 billion by 2021. As a CDMO, Orgenesis develops and delivers advanced medicinal products to cell therapy companies and benefits from industry strong positive trend. Orgenesis's wholly-owned subsidiary MaSTherCell provides a global one-stop-shop service, a unique competitive advantage, which lets therapies go to market faster and reduces the cost of goods sold.

CTB: Insulin-dependent diabetes is one of the most challenging health problems in the world, with 29 million people in the U.S. and 400 million worldwide living with diabetes. Orgenesis is currently developing a cellular approach called Autologous Insulin-Producing ("AIP") cell transplantation. AIP helps transform the patient's liver cell into a fully functional and physiologically glucose-responsive insulin-producing cell and provide the patient with long-term insulin independence. 'The timeline for the process from biopsy to transplantation takes approximately 5-6 weeks. We note this AIP procedure is currently pre-clinical but if successful offers investors massive upside optionality.

Competition

MaSThercell faces competition from companies such as Progenitor Cell Therapy (PCT) LLC, Pharmacell BV, WuxiApp Tec, Lonza Group Ltd and Cognate Bioservices Inc. MaSThercell looks to differentiate itself from these companies with its expertise and quality in the Cell therapy market, strong experience in process development (optimization) for its clients as well as through its high international distribution capabilities in the CDMO field; an essential ability clients look for.

Within the CTB business, Orgenesis will compete against Novo Nordisk, Eli Lilly, Sanofi-Aventis, Takeda Pharmaceutical Company Limited, Pfizer, Merck KgaA, and Bayer AG, along with other insulin, insulin analog, and other diabetic drug providers.

Valuation

Orgenesis appears undervalued when using various valuation methods with reasonable assumptions. By using technology value analysis and comparing the technology of Orgenesis's diabetes pipeline to other public diabetes companies, we found a median estimated value of $106 million, more than 100% above where the stock trades currently and a median enterprise value of $28 million for MaSTherCell and an average Enterprise Value of $30 million based on 2017 projected revenue. We also believe Orgenesis could be a viable takeover candidate as it scales its revenue, as its much more significant clients may look to move their cell manufacturing in the house eventually. Even without an acquisition, we believe the company can continue to scale revenue and that the stock's valuation will subsequently reflect their high topline growth. We believe the manufacturing side of Orgenesis provides a valuation floor, offering investors a way to achieve substantial returns even if the diabetes product is not successfully commercialized.

Recent News

Orgenesis recently completed a reverse stock split of its shares of common stock at a ratio of 1-for-12. This reverse stock split was implemented relating to the company applying to list on NASDAQ, Orgenesis must maintain a minimum of $4.00 per share for a specific number of days according to NASDAQ. We view a successfully implemented NASDAQ listing as a major catalyst for existing shareholders of Orgenesis.

Société Fédérale de Participations et d'Investissement (SFPI), a well-known Belgian Public Investment Fund, invested $5.9 million in MaSTherCell. These funds will be used to expand MaSTherCell's Belgian facilities with a dedicated late-stage clinical and commercial unit, anticipated to be completed by the fourth quarter of 2018. This development will significantly accelerate the delivery of state of the art commercial facilities and the expansion of MaSTherCell within the dynamic and expanding Belgium healthcare cluster. We view this financing as a major positive event for Orgenesis, as expanded distribution capabilities will expand Orgenesis' competitive moat.

Hunter Diamond, CFA, is the CEO of Diamond Equity Research, which is a global small capitalization equity research firm. Diamond Equity Research was created to assist small capitalization issuers with reaching retail and institutional investors and providing these companies the same distribution abilities large capitalization issuers take for granted, thereby helping smaller companies achieve a fair valuation. Diamond brings experience working in investment banking and equity research at Griffin Securities and National Securities, both emerging growth focused brokerages. While an investment banker, Diamond was involved in financings and mergers and acquisitions for emerging growth companies. After working in investment banking, Diamond founded Pathjump, which he scaled to thousands of users across the country. He holds his undergraduate and MBA degrees from Cornell University.

Disclosure:

1) Hunter Diamond: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Diamond Equity Research LLC is being compensated by Orgenesis Inc. for producing research materials regarding Orgenesis Inc. and its securities. Payment is made in cash and is billed one time and upfront for a six-month subscription, which includes one initiation report and one update report. As of 12/07/2017 the issuer had paid us $10,000 for our services, which commenced 07/07/2017, which is meant to subsidize the costs of independently analyzing the security. Additional fees may have accrued since then. I determined which companies would be included in this article based on my research and understanding of the sector.

2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.


BiotechIndustryStocks.com - A Leading Global Investor Website for Biotech Industry Stocks

BiotechIndustryStocks.com - investing ideas in biotechnology stocks, medical technology and life sciences

Like Biotech Stocks? View our Biotech Stocks Directory

Get News Alerts on Biotech Stocks


More Info:

Investorideas.com Newswire

This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders


Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release on the Investorideas.com newswire https://www.investorideas.com/News-Upload/

Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: https://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.

Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp