Medgenics Share Discussion Threads

[sicilian_kan] 20/7/2011 07:55

I think the main risks are:

1. Early stage trial, so although the data is very promising, there is still some way to go to prove it.

2. Platform technology is a double edged sword. If this works and can be replicated, then the possibilities are endless. Alternatively, it is a one trick pony, if the tech fails at any point, it might wipe out all the pipeline. I am invested as I believe that the initial results suggest that this is not the case.

3. Medgenics has up until now been restricted on the number of projects it could develop (initially EPODURE and INFRADURE, now with HEMODURE too). It is still in this restricted position. If the Baxter deal and a Phase IIb trial deal is signed in the next 12 months as the company is aiming to do, then I hope that Medgenics put the monies received towards developing matters they could not previously afford to develop, e.g. cancer recovery, arthritis, diabetes, multiple sclerosis etc.)

4. The company has so far proved it can produce small volumes of biopumps. It has yet to prove that it can do this in high volume. The company is producing an automated processing system to do this.

5. Delays are always a risk. There are a number of key areas here. Patient recruitment has been a problem for the Phase I/IIa trial, though they are pretty much there now. The company hopes to rectify this in Phase IIb by making it a US trial and from recollection, focusing on dialysis patients as the network is already there to recruit them. There could be delays in scaling up the production / processing systems. Or in proving matters still to be tested like ablation etc.

6. Obviously, if this works, then competitors will seek to develop alternatives / copy the BioPump etc. Key here is the robustness of Medgenics patent protection / IP. Some patents have been granted in some regions, some are merely pending etc.

[sicilian_kan] 19/7/2011 13:34

kalinit, that's a good question and one which requires a little more time than my lunch break. Will respond some time this evening. But in summary, there are risks. The best place to start is the US Prospectus which is very up to date and can be found at:



Pages 12-31 are the most relevant.

[melv3] 19/7/2011 12:51

The only downside I can see is the liquidty, you're 10% down before the share price even moves but I guess the liquidity will come with success and if we don't get much success then the shares will be pretty much worthless long term anyways. I agree with you once I seen that Issac Blech was backing this share with his own millions that sent off warning signals in my head, this guy knows more about the industry than any private investor. If a private investor placed that sought of confidence in a small cap high risk biotech that would be a huge vote of confidence but this guy backing the share with his experience as well as his personal fortune is like christmas come early. Forget the fact that the concept is fantastic and the initial results have been good, his personal input and contribution to the board is worth a small fortune and you know with that sort of investment he will be giving it all his attention. I think it only takes one piece of news to bring this share to the attention of the masses and once this happens we will be looking at double figures atleast (£10+) as a 24 month target. If the news flow is good and the sector gets re-rated as has been suggested then potentially we have a billion dollar company on our hands. GL to everyone.

[kalinit] 19/7/2011 12:36

Hi one and all,

Never posted before, but big thanks to sicilian_kan for all his research.

Can anyone see a major reason why this share wont take off soon (over and above recent rises). I have a considerable stake in this one and plan to add. Even the Baxter deal aside, this Co has unique personel, technology and a means to produce pure long lasting side effect free product - something no rival has. So great are some of the side effects and so short lived the benefits of their competitors that for EPO, Hep C and Factor VIII they are streets ahead. Given that Big pharma are concentrating on buying already hatched drugs at Ph1/2 through the huge process of regulation and cutting down on R+D at the drug inception stage, MEDU seems to be coming to the fore at just the right time. Add to that all the big hitters in the med world (I am in the profession and it reads like who's who in the EPO, Hep C and VIII field,) + on top of that the particular the guy (Sorry forgot his name) who is Mr Biotech with Bns of success behind him buys nearly 20% and comes on the board - what am I missing guys - his comming on the scene is like the biggest director buy you can have ie not just that he backs it, but he backs it with such a wealth of knowledge and experience as to what will be a winner?
As others have said, Baxter dont ask a minnor pharma company if you can pay them $2.5 for 6m grace to decide if you want to take out exclusive negotiating rights unless you are pretty sure this will fly. Anyone see a downside before I add more? sicilian_kan - your thoughts in particular appreciated.

[sicilian_kan] 18/7/2011 19:30

Agreed jt. Much more preferable this way than a spike.

I've updated the header by the way, re current market cap, share price differentials etc.

[jammytass] 18/7/2011 17:16

nice to see it rice slowly 10% per week until xmas would do

[sicilian_kan] 18/7/2011 12:50

MEDG is ticking up a little today, now 230p to buy and 205p to sell. MEDU up too at 300p to buy and 280p to sell.

[crimeprotection1] 18/7/2011 12:40

Just bought 1000 MEDG. Going to hold for the long term.

[sicilian_kan] 18/7/2011 12:34

MELV3, TDW let me do MEDG by phone or by fill and kill online (thus paying online prices). I cannot get live online offers, just prices. I did need from recollection to fill in a W8-BEN form too.

[melv3] 18/7/2011 12:28

I purchased 611 shares this morning of MEDU, unfortunately I can't trade MEDG through my selftrade share dealing account (because it doesn't settle through crest). Which stockbroker do you use?

[sicilian_kan] 18/7/2011 08:03

MEDU bid has ticked up to 270p, still 290p on offer.

[sicilian_kan] 17/7/2011 23:30

MELV3:

I understand his background includes:

Founding shareholder of Celgene Corporation in 1986. Celgene now has a market cap of $28 billion. It is the third largest independent biotechnology company and is within the S&P 500

Founding shareholder and member of the Board of Directors of ICOS Corporation beginning in 1991. ICOS was bought in 2007 by Eli Lilly for $2.3 billion

Founding shareholder and member of the Board of Directors of Genetic Systems Corporation from 1981 to 1986. GSC was bought by Bristol Myers Squibb in 1987 for $310 million (a lot of money now, let alone then).

Founding shareholder and member of the Board of Directors of Pathogeneses from 1992 to 1997. Pathogeneses was bought by Chiron Corporation for $700 million in cash in 2000, which became part of Novartis in 2006.

Founding shareholder and member of the Board of Directors of NovaPharmaceutical Corporation from 1982 to 1990. Merged with SCIOS in 1992 in $180 million stock swap.

Looking at this, he certainly has an eye for picking winners at early stages. Among the other companies he is currently invested in, he owns in excess of 30% of Contrafect, which recently raised $14m for pre-clinical work.

Re share price disparity, yes, it is as you describe. It is strange, but as the share becomes more popular and well known, such differences should iron out.

Re my shareholding, I would rather not say.

[melv3] 17/7/2011 20:54

Thanks for the detailed reply SK,

I'll probably have a little flutter on MEDG if I can buy these shares through selftrade which I presume I can if not then I'll probably buy some MEDU.

So from what I can see it looks like the shares currently trading in the US are at a substantial premium to those open to US investors on London with the only difference being that MEDU are denominated in Sterling rather than USD? have you got any reason for this or is it a simple case of arbitrage (pricing anomalies) between the two markets? I know that the US generally seem to pay a lot more for biotech companies but this does seem a bit strange.

Have you done any research on Issac Blech? seems too good to be true that he's backing the company with his personal fortune. Surely with someone as experienced and knowledgable as him on board the market cap should be much higher? sometimes these companies can be very difficult to value but I put a high price on that sort of backing from someone in the know.

Sorry to be nosey but what's your current holding in the company if you don't mind me asking? If not then I understand.

Kind Regards

[sicilian_kan] 17/7/2011 19:37

MELV3, welcome and those are fair comments. Sorry, but long response below:

The main restriction on MEDG is that they can't be offered, sold or delivered to the US or to any US Person unless the transfer is registered under the US Securities Act or an exemption from the registration requirement is available.

Now that there is a MDGN AMEX ticker, the effect of MDGN is reduced as the US pool of buyers (if there was any then) would not want to buy MEDG in any event. As it was, the reason for getting the MDGN AMEX ticker was that US buyers / investors wanted a US listing to invest (even the restricted MEDU ticker was not enough). Now of course, the US listing is leading the way on price.

The main effect of the restrictions on MEDG is liquidity. MEDG will reduce as the shares are converted to MEDU, there is only one MM on MEDG (I don't know the number on MEDU) and it is telephone or electronic fill and kill only, to get a fixed price deal.

All these things, together with the fact that people have to learn about the MEDG / MEDU difference, mean that recently MEDU has been the more popular ticker, with higher prices attributed to it.

But at the end of the day:

(1) these shares are all of the same nominal value. If holding to take out / a big deal / dividends eventually, then you will make far more money out of MEDG. The spread is also smaller; and

(2) it has not always been that MEDG trails MEDU by much. There is frequently convergence and sometimes MEDG has been ahead. I have therefore made money trading between the two. E.g. I bought MEDU once at around 4.3p, they rose and I sold at around 20p (the MEDU price) switching all into MEDG at around 8p. I got a 150% increase in my shareholding by switching. MEDU then fell back to MEDG eventually. I'm hoping that there will be a similar convergence which is why I switched my MEDU to MEDG recently (getting me 40% more shares). I tend to buy MEDU if shares are valued closely and MEDG if there is a significant disparity.

At the end of the day though, it is not an easy call either way. I agree with you on liquidity, but the share is not very well known at all. If the company delivers with a Baxter exclusivity period by end September, and then pulls off a deal, I do not think that there will be a liquidity problem as the shares will become heavily in demand / rise significantly, subject to terms.

But yes, you are thinking along the right lines in your post.

[melv3] 17/7/2011 19:19

SC from reading here looks like you prefer MEDG over MEDU, I think I read somewhere that the restriction on MEDG was that they can't be purchased by people resident in the US (or was it US nationals) ? is that correct or have I totally misunderstood what was said.

I'm looking to buy either MEDG or MEDU on Monday approx GBP 1,800 worth as a tester. The liquidity doesn't look great which is my only concern but this should matter for long term holders if the company is able to realise a fraction of its full potential.

Cheers

[sicilian_kan] 14/7/2011 21:12

Well, I wish your shares well...if only for my own...

[jammytass] 14/7/2011 21:11

i bought a few more over last 2days o very happy

[sicilian_kan] 14/7/2011 21:08

Awesome isn't it. High was $5.19 on MDGN today mid and is $5.20 to buy at the moment. That's equivalent to £3.22 / share. Yet we have mids of £2.75 (MEDU) and £2.10 (MEDG). I would expect another rise on AIM tomorrow.

[jammytass] 14/7/2011 21:00

try 7%plus looking good sicillian

[sicilian_kan] 14/7/2011 20:06

MDGN Us stock now up 5% today.

[jammytass] 14/7/2011 16:11

looking good guys slowly slowly going up up

[sicilian_kan] 14/7/2011 14:50

MDGN now up another 3% since trading started in the last hour.

[sicilian_kan] 14/7/2011 14:11

Current spreads are 260-290p MEDU and 200-220p MEDG. MDGN is 300p mid.