|Updated: Vatican Endorsement Seals NBS's Status as a The Major Play in Regenerative Medicine|
|Wednesday, 19 May 2010 08:03|
Just as we have speculated in articles and trade alerts for the past few weeks, the Roman Catholic church appears to be getting ready to support Neostem's (AMEX:NBS) stem cell initiatives in a very big way and one can only imagine the types of new headlines this news may generate both on and off Wall Street.
One of the biggest questions now is just how high NBS shares will run on news of the scientific support that would have made Galileo jealous. An easy double? Perhaps easily over $10 or $15 given the fact that the company should be easily trading at $6 per share now without the news? Analysts I spoke to this morning say it's too soon to tell since historic news like this isn't announced very often.
NBS announced this morning that the
The Vatican is especially interested in NBS's VSEL technology which we indentified in our friday alert. VSEL, very small embryonic like, adult stem cells have all the characteristics of embryonic stem cells but avoid the rejection issues that occur with using another person's embryonic stem cells. The weight of the Vatican's political,financial and promotional backing of such technologies clearly makes NBS the leading stem cell play.
We anticipate that NBS will generate significant revenues from these treatments beginning in the second half of this year. The key to the fountain of youth is in our own bodies and NBS will get a technology fee on each extraction and application of that product. Thus they are the regenerative and rejuvenation company. We believe that the ability to use our own embryonic stem cells to repair damage or grow replacement parts will dramatically vault NBS's share price. NBS is like a pharma company with several blockbuster products approved at one time. Such companies attain stratospheric valuations. NeoStem, Inc. (NYSE Amex: NBS) bought majority-owned pharmaceutical subsidiary Suzhou Erye (Erye) October 31, 2009. Erye began relocation of its operations to its new state-of-the-art manufacturing facility with the State Food and Drug Administration (SFDA) approval of two production lines at the new plant. Expanded capacity at the new plant will enable Erye to increase its product supply to meet the rising demand in
First quarter revenues rose 24% over the same period last year to approximately $15.8 million. Continued growth would put them at over 80m in revenues for 2010. Of major importance to investors should be the revelation in today's 8K filing that NBS has also signed an agreement with AQUA, a large investment fund, to enable NBS to draw down at is own discretion up to $20 million at a slight discount to market without warrants as an equity investment. This firm commitment from one of the premier investment institutions will provide NBS all the funding it needs, at the lowest dilution, to allow it to expand its fast growing Chinese pharma company and to market these proprietary stem cell treatments and benefit from times when there is stock is performing extremely well.
In other words, the company will raise money based on the good news that will be announced at the press conference, but there will not be a Rodman & Renshaw type financing deal that will dillute shares and scare investors. Those shorts who thought NBS was doing a highly dilutive secondary financing have already initiated a bear attack using their usual ploys in order to start to cover. This key revelation should also alleviate those concerns for longs who were sitting on the sidelines waiting to jump in. The company is scheduled to give updates on May 25th at a press conference at the NASDAQ market site and sources tell us that major TV news outlets and newspapers have already begun to confirm their attendance at the event. In addition, we are hearing rumors that the Catholic church may also be planning their own press events and around this major news. This is the stock to own as traders and investors will run the price up in anticipation of those announcements to come in the days and weeks ahead.
Disclosure: Long NBS