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Equity
Research Profiles |
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Orgenesis Inc. (the Company) is developing point-of-care (POCare) solutions for development and commercialization
of cell and gene therapies (CGTs), which are large and very rapidly growing
markets. CGTs strive to prevent or treat human disease by administering to a
patient his own cells that have been processed and treated ex vivo. |
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CGTs are focused on a great variety of treatments,
including cell-based immunotherapies, therapeutics for metabolic diseases,
neurodegenerative diseases, and tissue regeneration. |
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An industry source estimates that the annual
global market for cell and gene medicines will expand sharply to
approximately $150 billion by 2025. |
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The POCare business
model, initiated in second-quarter 2019, represents a paradigm shift in the
industry, reflecting cell processing and treatment within the POCare setting; delivery of unique cell and gene therapy
capabilities in a cost effective, high quality, and scalable manner; a global
network of leading healthcare facilities; and an expanding therapeutic
pipeline based on academic and hospital collaborations. |
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The POCare platform is
designed to help hospitals and academic institutions take innovative
therapies from the research lab to the market and into patients at scale. The
Company provides therapeutic product development assistance; POCare processing, manufacturing, and production
expertise; therapeutic regulatory and clinical assistance; and therapeutic
product commercialization and distribution. |
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Management believes that an efficient POCcare system will lower the high costs of CGTs,
including Immuno-oncology therapies by up to 90%. |
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The Company has considerable validation of its IP
strategy, as it has many licensed therapeutics and achieved technology
milestones. |
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The worldwide clinical trial pipeline bodes well
for continuing expansion of the market. There are approximately 946
CGT-related clinical trials underway, with 53% of them in oncology.
Approximately 82 of the trials are in Phase 3. |
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Management is striving to establish additional
joint ventures with leading universities and healthcare institutions
worldwide, thereby providing the Company with development funding for
therapies, reducing risk, and creating a faster pathway to market versus the
traditional biotech model. |
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A February 2020 collaboration agreement with the
John Hopkins University to develop and supply a variety of cell and gene
therapies and technologies is the third major such agreement signed by an
international institution in recent months. |
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The Company
generated significant value by building and selling its contract development
manufacturing organization (Masthercell Global,
Inc.) in February 2020. The revenues of that business had grown from $3
million in 2015 to a run rate of approximately $30 million. |
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The sale
price of $315 million generated net proceeds of $127 million. |
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The backgrounds of the management and directors
are outlined on the ORGS website. The individuals have significant experience
in CGTs and other biotechnologies, early stage companies, international
marketing, as well as corporate finance and capital markets. Vered Caplan, CEO, is the chief operating decision-maker. |
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Income
Statement (12 months through 12/31/19 vs. 11/30/18) (prior to sale of Masthercell) |
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Revenue: 33,256,000 vs. 18,655,000 Gross profit: 15,024 vs. 7,831 Operating income (loss): (24,604,000) vs. (13,919,000) Other income (expense): (874,000) vs. (3,848,000) Pretax income (loss): (25,478) vs. (17,767) Net income (loss): (26,041,000) vs. (19,104,000) Net income (loss) attributable to Orgenesis: (24,121,000) vs. (18,291,000) Net
income (loss) per basic common share: (1.77) vs. (1.43) |
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Balance
Sheet (12/31/19) (prior to $127,000,000 net proceeds from sale of Masthercell) |
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Cash &
equivalents: 11,388,000 Total
current assets: 25,979,000 Total
assets: 92,495,000 Current
liabilities: 31,579,000 Long-term
liabilities: 23,883,000 Redeemable
non-controlling interest: 30,955,000 Equity attributable to Orgenesis Inc.: 5,477,000 Number of common shares outstanding (03/09/20):
18,361,050 |
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The market
for CGTs is large and growing very rapidly. The Orgenesis
POCare operations presently have only a small
revenue base, but Orgenesis has plans to transform
development and commercialization of various therapies through POCare solutions. |
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The cash
position is robust following sale of Masthercell
Global, Inc. and a $9.2 million private placement in January 2020. New joint
ventures might provide additional funding for therapies. |
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On January
20, 2020, the Company sold 2,200,000 shares of its common stock at $4.20 per
share; the buyers also received three-year warrants to purchase up to 1,000,000
common shares at $5.50 apiece. On March 18, 2020, ORGS filed an S-3
Registration Statement for those common and warrant shares. |
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The enterprise
value of the Company well exceeds its market capitalization. |
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The impact from COVID-19 remains an uncertainly. In addition, the
Company website and SEC filings list a number of risks and are hereby
incorporated by reference. |
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Executive offices: 20271 Goldenrod Lane,
Germantown, MD 20876; Phone 480 659 6404 |
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Investor contact: David Waldman, Crescendo
Communications, LLC; Phone 917.355.2239 |
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any compensation for publication of this Profile. Analyst: William J. Ritger. |
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TickerBuzz, LLC Contact: William J. Ritger,
writger@gmail.com, 561.891.1903 Copyright 2020. TickerBuzz, LLC. All rights reserved. |