NeoStem Expected To Have Short and Long Term Value Drivers

JMP Securities Analyst, Jason Butler recently launched his NeoStem, Inc. Coverage Report.  NeoStem [AMEX:NBS] has transformed itself over the last year and a half with two acquisitions, multiple financings and their expansion into China.

The company is engaged in the development and manufacturing of cell-based therapies. They hold the worldwide exclusive license to VSEL Technology, which uses very small embryonic-like stem cells, shown to have several physical characteristics that are generally found in embryonic stem cells, and is pursuing the licensing of other technologies for therapeutic use. Furthermore, NeoStem is building its Chinese presence by establishing an operations lab for cell-based manufacturing in Beijing and is commercializing cellular therapies in China through the establishment of relationships with a network of hospitals.

In his report, Butler notes that NeoStem is positioning itself to become a leading player in cellular medicine. The company’s Progenitor Cell Therapy(PCT) unit is a key player providing contract manufacture and development/regulatory consultancy to stem cell therapeutics companies. NeoStem is now leveraging their core expertise to advance emerging therapeutic programs. Through the recent acquisition of Amorcyte, NeoStem has gained rights to AMR-001, a well characterized  cell therapy product candidate with an established mechanism of action and defined threshold dose. The company completed an equity financing over the summer, raising gross proceeds of $16.5MM, which he believes can further enable the transformation into a focused therapeutics development company and progress AMR-001 into Phase II development. In our view, execution on the AMR-001 development program and continued commitment to high-value therapeutic assets will further establish NeoStem as a focused development-stage biotechnology company and can provide multiple value-inflecting milestones over the next 12-18 months.

The full report can be accessed here.

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