|NeoStem rated "outperform" by Cowen|
|By Deborah Sterescu, ProactiveInvestors.com|
|Thursday, 24 March 2011 16:05|
Progenitor has cell therapy manufacturing facilities, as well as processing and storage facilities for stem cells collected from the umbilical cord at birth, located on the east and west coast of the US.
Following the acquisition of Progenitor, NeoStem launched new storage services that will be bundled together as a multi-generational banking program, to be called the "Family Plan".
Nowadays, many seek to collect and store their own stem cells and those collected from the umbilical cord at birth for future medical use. These stem cells can be used to help cure a wide range of diseases, such as leukemia, lymphoma, and future potential applications including heart disease and diabetes.
Cowen also noted in its research report that aside from its US services, NeoStem also has partnerships with two "prominent" Chinese hospitals, giving it a foundation on which to build its China stem-cell therapy business.
"In fact, [NeoStem's] current valuation could be justified based alone on its 51% stake in Suzhou Erye, a Chinese generic drug business which is estimated to record sales of approximately $90MM in 2011," Cowen concluded.
According to the equity research firm, antibiotics manufacturer Suzhou Erye is poised to benefit from strong domestic market growth of over 20% per year, and the Chinese government's ongoing $125 billion healthcare reform expenditure, which should provide NeoStem with cash flow to reinvest in the stem-cell business.
NeoStem's shares rose nearly 5% on Thursday to $1.69 as of 3:11pm EST.