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Cytori Surges on Medistem Agreement

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The stock price of Cytori Therapeutics, Inc. (CYTX - Free Report) gained 2.69% on Thursday, Jun 18, 2013, on the announcement of an agreement with Medistem, Inc. As per the terms of the agreement, Cytori gets the exclusive rights to use Medistem's patent related to stem cell mediated treg activation (US Patent No. 8,241,621).

The licensed patent from Medistem strengthens the protection of Cytori’s autoimmune disease candidates developed on an adipose-derived regenerative cell based platform.

We see this move as a positive for the company and in-line with the company’s strategy. Earlier, in a filing with the US Securities and Exchange Commission (SEC), the company had disclosed that it is looking for additional patents related to its adipose-derived stem and regenerative cells platform.

We believe that strong patent protection is critical for Cytori as several companies including Baxter International Inc. (BAX - Free Report) and Shire (SHPG - Free Report) are developing cell-based therapies.

Earlier this month, at the JMP Securities Healthcare Conference 2013, Cytori provided an encouraging update on its business. Cytori, which generated revenues of $8.7 million in 2012, expects revenues to jump to $15 million in 2013. Revenues are expected to increase on the back of contract milestone payments from government agencies like the US Department of Health and Human Service’s Biomedical Advanced Research and Development Authority (BARDA).

Cytori carries a Zacks Rank #2 (Buy). Other stocks, which appear to be favorably placed, include Jazz Pharmaceuticals Public Limited Company (JAZZ - Free Report) carrying a Zacks Rank #1 (Strong Buy).

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