Research

Navidea (NAVB) Downgrade Report 01-26-16

downloadreport

s Downgrading to Neutral as Delays & Unknowns Mount
s Waiting for More Guidance on March Conference Call

Download Full 33-Page Downgrade Report with Important Disclosures: NAVB Downgrade 01-26-16

Downgrading to Neutral as Unknowns Accumulate: Navidea management stated during their January 12th presentation that they met the low-end of sales guidance but also guided a delay in the sale of NAV4694 possibly into Q2. As a result, management did not mention achieving cash-flow breakeven in Q1 during their January 12th presentation as sales revenue and the sale of NAV4694, both key components, have apparently missed their timelines. Management further stated their intention to add additional salesreps and launch their Rheumatoid Arthritis (RA) program during 2016, both of which are expected to add to the near-term cash burn over and above the NIH grant for RA. Finally, management continues to remain silent on any progress in the Macrophage Therapeutics division (although the new RA program could be viewed as a precursor). We are therefore downgrading to Neutral until we get more detailed guidance from Navidea management during their early March earnings conference call and the terms of the sale of NAV4694. The cumulative effect of these significant issues on sales, cash resources and potential shareholder dilution yields Navidea at $1.00 per share based on a 35x multiple on projected fiscal year 2018 EPS and discounted 20% for cumulative risk plus $0.25 per share based on our internal valuation for Macrophage Therapeutics.

Lymphoseek Sales: Navidea reported unaudited Lymphoseek® sales for 2015 of $10.2M, which was on the low end of management’s $10M-$12M sales guidance. Although meeting guidance, sales were below the original CRG loan covenant for sales of $11M and below the whisper number of $11.5M. Management estimated 2015 gross margin at ~85% or $8.6M. Management further stated they will be expanding their sales force from the current 12 reps and is expected to announce guidance for 2016 in early March. We note the current CRG loan covenant for 2016 sales is $22.5M, which is unchanged from the original CRG agreement.

NAV4694 Sale: While we anticipated the possibility that the negotiations for the sale of NAV4694 could slip into early-Q1, management now states that their new timeline for closing the sale is H1 2016. It was reiterated that the ongoing negotiations are still with the same buyer.

Rheumatoid Arthritis (RA) Program: Navidea announced the launch of their Rheumatoid Arthritis (RA) program during 2016. In Q1, the non-clinical package supporting IV and subcutaneous administration will be filed with the FDA and a Phase I pilot study is also expected to commence in Q1 to then be followed with a Phase I/II trial in H2 2016. We note that Navidea has NIH grant funding of $225K for activity up to the pilot study and $1.5M for the Phase I/II study. Management stated that Phase III trials could begin sometime in 2017. Investors should note that the rationale for the RA program is that the ability to diagnose Rheumatoid Arthritis early remains an unmet medical need and that several studies have shown that early treatment yields better outcomes (and presumably lower healthcare costs).

Macrophage Therapeutics: Despite growing Wall Street interest in therapies beyond the checkpoint inhibitor drug class in immuno-oncology, there still has been no further mention of any progress in Navidea’s Macrophage Therapeutics division. We note that after presenting very promising therapeutic data (see Kaposi’s Sarcoma Kill Data) the Macrophage Therapeutics subsidiary CEO stated on a July 7th conference call “Finally, we will host an Investor Day in late summer or early fall where we will update interested parties on the results of the significant body of data we anticipate generating over the upcoming weeks.“, which did not occur. Instead, on September 25th, Macrophage Therapeutics announced they developed the process for producing MT-1001 and MT-2001 with no further announcements to date.

Download Full 33-Page Downgrade Report with Important Disclosures: NAVB Downgrade 01-26-16

Update for Navidea (NAVB) and Cellular Biomedicine (CBMG) Disclosures

downloadreport

See updates for Navidea (NAVB) and Cellular Biomedicine (CBMG) Disclosures: Disclosure Updates 01-26-16 NAVB CBMG

Navidea (NAVB) Update Report 11-23-15

downloadreportDelays in NAV4694 Sale & MT – Momentum Stalls Out
Management Reiterates Revenues, Divestiture & Breakeven
Non-Dilutive Grants for Clinical Trials in 6 New Indications

Download Full 33-Page Update Report with Important Disclosures: NAVB Update 11-23-15

Waiting on NAV4694 Sale: Navidea’s shares have retreated significantly due to delays and some measure of uncertainty. Primarily, the shift to monetize their NAV4694 Alzheimer’s program, rather than the original plan to divest just for expense reduction, increased the negotiation timeline. This required cash expenditures in Q3 to retain value while the delay created uncertainty about Navidea’s ability to achieve cash flow breakeven in Q1 2016 as cash from the divesture is a component of the calculation. Management reiterated on Wednesday their intention to monetize NAV4694 by year-end and maintained the goal of cash flow breakeven in Q1. However, based on our M&A experience, acquirers tend to prefer clean year-end balance sheets and typically close acquisitions after the new year (unless they are immediately accretive) so a NAV4694 sale in early-Q1 with Navidea reaching cash flow breakeven run rate in late-Q1 is a possibility. Regardless, we expect both of these issues to be resolved by Q1.

Waiting on Macrophage Therapeutics (MT): Also impacting the momentum of Navidea shares is the slow pace of their Macrophage Therapeutics subsidiary as investors await data from their 10 preclinical animal studies. We note that after presenting very promising therapeutic data (see Kaposi’s Sarcoma Kill Data) the Macrophage Therapeutics subsidiary CEO stated on a July 7th conference call “Finally, we will host an Investor Day in late summer or early fall where we will update interested parties on the results of the significant body of data we anticipate generating over the upcoming weeks.“, which did not occur. Instead, on September 25th, Macrophage Therapeutics announced they developed the process for producing MT-1001 and MT-2001 with no further announcements to date.

Non-Dilutive Grant Funding Builds Additional Cancer & Immuno-Diagnostics Candidates: While investors remain focused on management’s near-term execution of Lymphoseek sales, the sale of NAV4694 and cash flow breakeven, Navidea has received multiple non-dilutive NIH grants to support the expansion of Lymphoseek and the Manocept™ platform into 5 new cancer types as well as non-cancer immuno-diagnostics such as rheumatoid arthritis (RA). These new programs are expected to begin clinical trials over the next 6 months and are attractive as the Manocept scaffold is significantly de-risked as it is already FDA-approved in Lymphoseek®. We are reiterating our Strong Speculative Buy rating with our model valuing the Lymphoseek program at $3.00 per share based on a 35x multiple on projected fiscal year 2018 EPS and discounted 20% for cumulative risk plus $0.25 per share based on our internal valuation for Macrophage Therapeutics. Investors should note that none of the additional cancer and immuno-diagnostic programs are in our present model, however we anticipate one or more to be added as the programs progress during 2016.

Management Reiterates Lymphoseek 2015 Sales Guidance: Navidea management reiterated sales guidance for Lymphoseek of $10M-$12M for 2015 and is maintain gross margins over 80%. Q3 Lymphoseek sales were $3M with total revenues for the quarter of $4M including licenses and grants. R&D expenses increased in Q3 due to one-time vendor milestone payments for their NAV4694 Alzheimer’s program and patient follow-ups (no new patients are being enrolled). Navidea felt the payments preserved the program with regard to divestiture value. Navidea ended the quarter with $11.4M in cash with $27.3M available under the Platinum credit facility with an additional $15M potentially available as well as an additional $10M potentially available under the existing CRG loan agreement.

Lymphoseek

Q1’15

Q2’15

Q3’15

Est. Q4’15

Est. 2015

Sales*

$1.8M $2.0M $3.0M $3.2-$5.2M $10-$12M

Q/Q

20%

11%

50%

7%-73%

* Represents Navidea’s 50% Share of Revenues from Cardinal Health

Q1’16 Cash Flow Breakeven “Achievable“: During the Q3 conference call Navidea management stated they still believe that Q1’16 cash flow breakeven is “achievable” and “possible“. While management stated that they are in the “advanced stages of divestiture” for their NAV4694 Alzheimer’s program, we believe this cash flow breakeven uncertainty is due to the NAV4694 divestiture timing, structure and payments. Management stated at an investor conference Wednesday that their goal remains to monetize the divestiture of NAV4694 by year-end.

Cost-Effectively Expanding Lymphoseek to Additional Cancer Types: Navidea expects to begin multiple clinical trials soon in additional tumor types while leveraging NIH grants such as Colon Cancer, (NIH grant), Cervical Cancer (NIH grant), Kaposi’s Sarcoma (NIH grant), Anal Cancer (NIH grant), Pediatric Cancer (expected NIH grant) and Endometrial Cancer (investigator sponsored trial). (see Lymphoseek® Post-Marketing Studies)

Immuno-Diagnostics – Expanding Beyond Cancer: Navidea has begun development work leveraging their targeted CD206 Manocept™ platform for non-cancer immune-diagnostic indications such as Rheumatoid Arthritis (RA) with a planned human Phase I/II clinical trials (NIH grant) expected to begin in H2’16. The early detection and treatment of the autoimmune disease RA is important to slow disease progression and reduce pain and permanent damage. In addition, development in Kaposi’s sarcoma will also continue under NIH grant funding. To better commercialize these Immuno-Diagnostic indications, Navidea is expected to file data supporting intravenous (IV) and subcutaneous (Sub-Q) administration for systemic delivery to the patient with the FDA in Q1’16. (see EULAR 2015-Manocept™ for Rheumatoid Arthritis)

Immuno-Therapeutics – Macrophage Therapeutics: Concurrent with the development of new Immuno-Diagnostics, Navidea is also developing their Manocept™ platform for use as targeted immunotherapeutic drugs through their Macrophage Therapeutics division. On July 2, 2015, Navidea Macrophage Therapeutics revealed encouraging targeting and kill data in Kaposi’s Sarcoma for their first therapeutic drug candidate, MT-1001, combining the Manocept CD206-targeting backbone with doxorubicin to selectively induce apoptotic cell death of activated macrophages and Tumor-Associated Macrophages (TAMs) (see Kaposi’s Sarcoma Kill Data). In addition, active research continues with BIND Therapeutics (Nasdaq:BIND Not Rated) combining the Manocept backbone targeting CD206 on activated disease-associated macrophages with BIND’s Accurins™, novel nanoparticles to enhance drug delivery (prolonged circulation with controlled and tunable release) with targeting of a therapeutic payload. Finally, early preclinical animal testing is being conducted for a number of oncology and non-oncology indications. (see Macrophage Therapeutics Manocept™ Platform & Development Program)

Download Full 33-Page Update Report with Important Disclosures: NAVB Update 11-23-15

Navidea (NAVB) Note 09-25-15

downloadreport

Navidea’s Macrophage Therapeutics Gears Up for 1st 2 Therapeutic Candidates

Download Full 8-Page Note with Important Disclosures: Morning Note 09-25-15 NAVB

Navidea’s subsidiary Macrophage Therapeutics announced they have developed the production process for the first two therapeutic agents based on their Manocept™ platform (which was used successful in Navidea’s FDA and EU-approved diagnostic, Lymposeek®), specifically MT-1001 designed to target and kill activated CD206+ macrophages using a doxorubicin payload (anthracycline antitumor antibiotic) and MT-2001, designed to inhibit the inflammatory activity of activated CD206+ macrophages using an undisclosed anti-inflammatory payload. In addition, Macrophage Therapeutics has contracted with an independent facility to produce sufficient quantities of MT-1001 and MT-2001 along with the concomitant analytical standards, to provide material for planned preclinical animal studies. Finally, they have launched a new website www.macrophagetx.com which will also track their development results as shown:


Download Full 8-Page Note with Important Disclosures: Morning Note 09-25-15 NAVB

Cellular Biomedicine (CBMG) Note 09-14-15

downloadreport

 

Phase I Data CAR-T Cell HER-1/EGFR in Lung Cancer at ECCO

Download Full 8-Page Note with Important Disclosures: Mid-Day Note 09-14-15 CBMG

CBMG announced that data from the PLAGH/CBMG Phase I clinical trial for their Chimeric Antigen Receptor-Modified T-Cells (CAR-T) targeting HER-1 (also known as EGFR) in patients with advanced relapsed/refractory Non-Small Cell Lung Cancer (NSCLC) that express HER-1 will be presented at the 2015 European Cancer Congress (ECCO) meeting September 25-29, 2015 in Vienna, Austria. The CAR-T trial was designed and conducted by Chinese PLA General Hospital (PLAGH) in Beijing also known as “301 Hospital” and was led by Principal Investigator Wei Dong Han, MD, PhD, head of PLAGH’s cancer immunotherapy department who will be presenting the data. The abstract will be available during the conference at http://www.europeancancercongress.org/Scientific-Programme/Abstract-search?abstractid=19963

Title: Chimeric Antigen Receptor-Modified T-Cells for the immunotherapy of Patients with HER-1 Expressing Advanced Relapsed/Refractory Non-Small Cell Lung Cancer
Poster Session: Immunotherapy of Cancer, September 26 2015 from 16:45 to 18:45 (CEST)
Abstract #: 516
Poster #: P250
Location: Messe Wien Exhibition & Congress Centre, Hall C
Presenter: Wei Dong Han, MD, PhD, Chinese PLA General Hospital
Authors: K.-C. Feng1, Y.-L. Guo2, H.-R. Dai2, Y. Wang2, S.-X. Li3, Q.-M. Yang1, M.-X. Chen1, Y. Zhang1, Y.-J. Zhang1, C.-M. Wang1, W.-Y. Zhang1, X. Li4, W.-D. Han2
1Department of Bio-therapeutic, Institute of Basic Medicine, Chinese PLA General Hospital, 2Department of Immunology/Bio-therapeutic, Institute of Basic Medicine, Chinese PLA General Hospital, 3Department of Geriatric Hematology, Chinese PLA General Hospital, 4Department of Molecular Biology, Institute of Basic Medicine, Chinese PLA General Hospital, Beijing, China

Investors should note that while CAR-T technology has been shown to be very promising for hematological cancers, the technology is is very early stages of testing so solid tumors. In April 2015, Novartis (NYSE:NVS Not Rated) and UPenn showed early data using their CAR-T cell technology targeting mesothelin (CART-meso) in 2 ovarian cancer patients, 2 epithelial mesothelioma lung cancer patients and 1 pancreatic cancer patient. The cells lasted up to 28 days while appearing to be safe. While there were no clinical responses there was data suggestive of activity. The abstract can be found at http://bit.ly/1VXPs0s

Maintaining Strong Speculative Buy – $37.00 Target: Despite solid progress in building a world-class scientific and clinical development team with a significant pipeline of cellular and immunology drug candidates under development, CBMG shares have been negatively impacted by the simultaneous sector-wide decline in the immuno-oncology space and the market concerns in China. We believe both issues are overdone and expect a more stable environment will be forthcoming. For CBMG’s CAR T-cell program we are valuing at $145M ($12.00 per share) while we are valuing the CD40LGVAX program at $55M ($5.00 per share) as well $3.50 per share for their preclinical 3rd-generation anti-PD-1 checkpoint inhibitor program for a valuation of CBMG’s immuno-oncology programs of $20.50 per share. Our valuation for the technical services and clinical stem cell programs is $16.00 per share based on a 45x multiple on projected fiscal year 2020 EPS and discounted 35% for cumulative risk plus $0.50 per share for the preclinical Asthma and COPD programs for a total of $16.50 per share.

Download Full 8-Page Note with Important Disclosures: Mid-Day Note 09-14-15 CBMG

Page 1 of 512345
Privacy Policy    Customer ID Program Notice    SEC Order Disclosure     Business Continuity Plan 

Copyright © 2009-2016 LifeTech Capital.   All Rights Reserved.
Securities offered through Newbridge Securities Corporation a member of FINRA (www.finra.org) and a member of SIPC (www.sipc.org).
SIPC provides coverage for accounts up to $500,000 (including up to $250,000 in cash) per client as defined by SIPC rules.
This coverage does not protect against the loss of the market value of securities.