Medgenics Share Discussion Threads

[sicilian_kan] 23/8/2011 19:39

"Equities research analysts at Maxim Group initiated coverage on shares of Medgenics (NASDAQ: MDGN) in a research note to investors on Tuesday. The analysts set a "buy" rating and a $8.00 price target on the stock."

[sicilian_kan] 10/8/2011 21:47

News out:

Medgenics Awarded Grant from the Israeli Office of the Chief Scientist

MISGAV, Israel & SAN FRANCISCO, Aug 10, 2011 (BUSINESS WIRE) -- Medgenics, Inc. MEDG 0.00% the ("Company"), the developer of a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today reported that the Company was awarded a government grant amounting to a total net amount of up to NIS 3.0 million ($0.9 million USD), from the Office of the Chief Scientist (OCS) at the Ministry of Industry, Trade and Labor of Israel for the six month period through August 2011.

The OCS awards grant in Israel to various industries in order to foster technological innovations. Recipients are selected based on various criteria including, the uniqueness of a company's innovative technology, potential market forecasts and capabilities of the company in areas including financial strength, R&D compatibilities, and management experience. In the event that the Company commercializes products from the funded research and development, the Company will then be required to pay royalties to the OCS to repay the grant, plus interest. The obligation to pay these royalties is contingent on actual income and in the absence of such income, no repayment to the OCS is required.

The funds will be designated and used by Medgenics to support further research and clinical development of the Company's proprietary tissue-based Biopump platform technology for the sustained production and delivery of therapeutic proteins using the patient's own dermal tissue.

Andrew L. Pearlman, Ph.D., CEO of Medgenics, Inc., commented, "We are pleased to have been selected to receive this non-dilutive funding and support from the Office of the Chief Scientist for the fifth year in a row. This grant will allow for further development of our product pipeline of Biopumps and underscores the OCS' belief in the potential of our innovative Biopump platform technology to significantly improve upon current methods for certain protein production and delivery."

[kalinit] 08/8/2011 09:09

Thanks SK - will look into it.

[sicilian_kan] 07/8/2011 07:40

kalinit, I don't know enough about Summit to invest there. It is not the usual type of company that I go for.

I am also in Immupharma, which has a second Phase IIb trial reporting in lupus (blockbuster potential) before September and a very interesting Phase IIa (blockbuster potential) cancer trial due to report by November (interim results showed that around half patients had shown disease stabilisation, having failed all other treatment).

Market cap creeping up at the moment, now £65m.

[kalinit] 06/8/2011 22:56

SK - could not wish for a better leading shareholder from all I learn of him, not only for his experience in bringing tiny bios to greatness, but also with all the connections he must have and most specifically, the influence he could bring to on potential buyers like Baxter, given his personal standing in this particular niche.

On a complete aside - any other bios you like - I have been waiting for Summit to draw back a bit after being tipped recently. They have some pretty unique insights and techniques which in a similar way to MEDU could be licenced out to all sorts of companies to make drugs in their specific fields.

[sicilian_kan] 05/8/2011 21:33

kalinit, agreed re the lack of a big fall in the last two days. It is the advantage of being in a company in bio, which is funded for at least the rest of the year and some more and which has a good prospect of getting a big deal. The market should and has priced this accordingly. On the other hand, companies needing cash this year or which could have sales prices and volumes cut (mining) are really suffering. I guess part of it as well, is that as Medgenics is so low down on the radar, it has few buys and few sells, so the share is less volatile in the current market.

Re being on institutions radars, Medgenics will need a market cap of greater than £50m for this to happen. With the Baxter deal, if signed, that is more than likely and I agree with you about the possible consequences. I am content in the interim period for Isaac Blech to remain the leading shareholder ;-)

[kalinit] 05/8/2011 15:34

SK - nice to see next to no movt on the share price today or yesterday, when most of my other more well known AIM shares were falling like stones until the US Non Farming Payroll figures came out today - (apparently due to institution investors selling heavily to meet calls on other highly leveraged trades).
To me it suggests none of the big institutions have MEDU on their radars. If Baxter bites in Sept if may begin to put us on their radar, esp as many other sectors are crumbling and Biotech seems to be a hot sector. This would amplify any effect of an announcement on the share price that the more humble small fry like us, or even those who are part of the company itself and hold large blocks of shares could exert.

[sicilian_kan] 04/8/2011 20:42

Header updated as to the following:

MEDG (AIM) - 2.178m shares, price 18/7/11 230p
MEDU (AIM unrestricted) - 1.797m shares, price 18/7/11 242.5p
MDGN (AMEX, US) - 5.661m shares, price 18/7/11 $4.56 (=280p)

Market cap therefore = £25.2m as of 18/7/11

[crimeprotection1] 26/7/2011 12:23

Yes thanks for that, most useful info. It definately seems that after yesterdays rise in MEDG, both stocks are now broadly trading in-line with each other. All we need now is for both stocks to trade in-line with the AMEX list!

[jammytass] 26/7/2011 06:00

sicilian_kan > nice one thanks for the info

[sicilian_kan] 26/7/2011 00:46

Good news on a patent update as the Examining Division at the European Patent Office wrote back to Medgenics on 8 July 2011.

By way of background Medgenics have or have licensed technology that has patents granted in the US and Japan (see RNS's as well) as Australia, India and China and some others. There are also patents pending all around the world.

I'm not very good at reading these, but my understanding is that the European Patent Office is getting very close to granting / issuing one of Medgenics' pending patent applications, after a long fight. This is the one entitled "DOSING AND ADMINISTRATION OF THERAPEUTIC MICRO-ORGANS IN LIVING SUBJECTS AND DEVICES AND METHODS FOR SAME"

This, if I have read it right is excellent news as the European region was always going to be one of the toughest for Medgenics as unlike the US, methods of treating humans are not patentable.

See the claim that I think is being approved at https://register.epo.org/espacenet/application?documentId=ERIZJJT04052900&number=EP02783500&lng=en&npl=false

Claim 1. is the master wording that is used thereafter in the other claims for further uses. At the following link, the Examining Division states in their 8 July 2011 correspondence that "Claim 1 appears to fulfill the requirements of Article 52(1) EPC", see:

https://register.epo.org/espacenet/application?documentId=ERXUAX9G3088FI4&number=EP02783500&lng=en&npl=false

Article 52(1) EPC states that "European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application".

So my reading of this is that the basic patent is being approved and they are just tidying up some of the ancillary matters.

I hope I haven't missed anything here. Let me know if I have.

[jammytass] 25/7/2011 19:56

good rise today>>>

[melv3] 25/7/2011 19:46

Yes shame I had to purchase MEDU instead of MEDG, since I bought in MEDG has gone for a midprice of 210 to 252.5 ... sighhhhhhhh. I've now found a place I can trade MEDG but I've sort of missed the boat slightly so I'll wait until another buying opportunity presents itself.

[sicilian_kan] 25/7/2011 19:10

MEDG up 12p today.

[sicilian_kan] 25/7/2011 07:25

My other listed bio that I am in is Immupharma (Cancer Ph IIa results due in Autumn and Lupus Ph IIb results due in Q3). I haven't looked at VAL or SUMM.

[sicilian_kan] 25/7/2011 07:11

Hi MELV3

There are currently 9.6m shares on the market. There are warrants and options in addition that could take shares in issue up to 16.1m. Many of these warrants are from the US IPO and are exersisable until 2016. See

Other warrants, options and details on the are listed in the IPO document. Exercise dates range from 2011 to 2016, most towards the latter date. Some, e.g. under the stock incentive plans, have not even yet been issued. So yes, there is potential dilution, but in most cases, this will be for decent amounts of cash.

Agreed, this is pure speculation until a deal is signed based on risk reward analysis. That's why the Baxter Sept 30 deadline for the exercise of their exclusivity period and the 6 months thereafter to negotiate are potentially company transforming.

If we get a Baxter deal and a EPO deal in the next 12 months, as hoped for, then there should be minimal levels of dilution thereafter.

[melv3] 25/7/2011 00:29

Hi Sk how many warrants are in issue and do the warrants have a deadline/exercise date? so if the company succeeds and all warrants are exercised we could be looking at a substantial dilution? I think the reason the warrants are trading at a substantial premium is because long term this is an all or noting punt. Either the technology is really good and commercial or else it's a good idea but will fail at some stage during the testing process. The price movement of a share if often exaggerated in the price of a warrant.

FYI I read the nomura broker note, basically confirms everything that I thought about this company. Potentially we could have a multi billion dollar company on our hands but until we sign any commercial deals short term this can't be considered anything more than a speculative investment.

I think it's all about the risk reward profile and the biotech sector is due for a re-rating. Best to spread your money across a few companies and hope that one can give you that 'blue sky' opportunity.

Are you invested in any other biotech companies? my two biggest holdings are VAL and SUMM ... MEDU/MEDG I'm looking to add in the coming weeks ... I can trade MEDG through my JPJ share account and I already have a small holding in MEDU.

[jammytass] 22/7/2011 19:28

ill be happy with 10%every week until xmas

[sicilian_kan] 22/7/2011 08:09

That said, the Medgenics presentations also show a deal Bristol Myers-Squibb did in 2009 for an interferon (lambda) protein, licensed at Phase Ib.

$85m upfront
$535m pre sales royalties
Sales royalties and milestones on top

I think this is a little beyond HEMODURE, but I think EPODURE could target such a deal. Whether they get it or not is another question.

[sicilian_kan] 21/7/2011 22:42

One of the interesting things at the moment is the price of the US warrants. At the time of the IPO earlier this year, the pricing was $4.54/share with a $0.46 warrant, making the investor pay $5 for the share and the warrant.

These $0.46 warrants are exercisable at $6/share. I.e. to exercise the warrants, an investor will have paid $6.46/share, which is considerable ahead of where we are now before they will be exercised.

The warrants are currently trading at $1.73/warrant. This is a 276% profit on the warrants that shareholders bought.

To me, it is interesting that people are prepared to pay as much as $1.73 for a warrant when shares can be bought for $4.80. The warrants are very much in demand.

The advantage of them is that if Medgenics fails, you only lose $1.73. The disadvantage is that if Medgenics succeeds, you pay $7.73/share instead of $4.80 / share (or even less on MEDU or MEDG).

[sicilian_kan] 21/7/2011 22:01

kalinit. I think something over $400m phased over the time from deal to regulatory approval would be about right for what the brokers are predicting. However this does not include any sales milestones or royalties, which would be on top of that.

The structure would be weighted more heavily towards the end (of course regulatory approval will get more money than Phase I/IIa results) but there would be significant milestones for passing each threshold.

The share price would include future possibilities, in the same way that it does now. Indeed this is how brokers calculate their target prices, by working out the discounted chances of each milestone etc. being received.

[kalinit] 21/7/2011 19:26

Thanks SK - we will watch with great interest.

Figures were mentioned of about $400m phased over the whole process of Baxter getting a working, trialed, end product it can use. If it occurs, will it mean incremental rises in the share price at each stage and payment reached, or will it be one big bang with it largely being priced in on the initial contract in Feb? (Never been fortunate enough to be part of what will hopefully be a successful biotech minnow buyout before).

[sicilian_kan] 20/7/2011 19:12

kalinit, I think Baxter has a choice between doing a massive license for the BioPump and just tieing up HEMODURE leaving Medgenics to licence piecemeal per therapy. Which way they will go, I do not know. The RNS's read as if it is just for HEMODURE, but that it because it is only HEMODURE over which the exclusivity option / collaboration lies and which Baxter has co-funded. But in the end, who knows.

Cp1, yes, looks just like that.

[crimeprotection1] 20/7/2011 12:19

Seems like an effort is underway to bring these two more in-line with each other, one up, one down. Yes thanks to sicilian_kan for most informative posts and updates.

[kalinit] 20/7/2011 11:10

Many thanks indeed sicilian_kan - your comments make great sense. Do you think if the Factor VIII comes off with Baxter, Baxter will seek to restrict medgenics using the biopump for INFRADURE and HEMODURE or if MEDU can get a big deal with Baxter say $400m, it can then go on and do it with other companies - perhaps for an even larger price given one big pharma has already done the due diligence and thinks the basic principal works.