Sure
@madamswer, but don't expect anything original. I can only quote the W and T factors from what I have read. These are the matters that most analysts warn about in standard fashion or that company announcements often add as insurance against the risk of generating excess enthusiasm in potential investors. None of these will add to your knowledge but some sheep other than myself might like to see the sort of thing Bell Potter adds to their analyses. A summary of typical a*se covering advice that accompanied BP's recent offering re Temcell follows:
KEY RISKS We see the following key stock specific risks to our investment thesis on Mesoblast:
• Clinical risk: There is a risk that MSB’s clinical trials fail to reach their endpoints. Failure of a Phase III trial may significantly impact markets confidence on Mesoblast’s technology and in case of an un-partnered product will reduce its partnering prospects.
• Timing and clinical risk on products partnered to Teva: For its partnered products to Teva, MSB is reliant on that company for development timelines. The ability of MSB’s products to finally reach the market and translate into royalty revenue streams for the company depends on Teva. Delays in timelines as seen in the past will affect market sentiment. Also, if the products fail at any stage of clinical development or if Teva decides to discontinue the development of MSB’s products, MSB’s ability to generate revenue from those assets will diminish/or fail totally.
• Manufacturing risk: The key success of Mesoblast’s business model is dependent on its ability to manufacture its stem cells on commercial scale as well as at a costeffective price. Mesoblast has partnered with Lonza to manufacture its stem cells. Our underlying assumption is that together the companies will be able to drive down the COGS by driving efficiencies in the manufacturing process. Failure to cost-effectively manufacture would impact our valuation.
• Regulatory risk: Successful commercialisation of MSB’s products is ultimately dependent on getting approval from the regulatory authorities to commercially launch the product. Failure to satisfy regulatory requirements could mean that the product will fail to reach the market.
• Funding risk: Although MSB has a high cash balance currently further bolstered by the US$58.8m net cash injection from the NASDAQ IPO, the company may need to raise additional capital if its burn rate increases significantly or there are delays in partnering its spinal or Inflammatory franchise or pipeline for Japan or if the Celgene deal does not materialise, before commercialization.
For me, Funding Risk is the scary one. Every time MSB passes the hat around my average cost of $4.72 gets further over the horizon. But, thanks to recent events, it's a lot better than the $7+ it was before the IPO. You never know where your luck is going to come from. Always assuming I didn't just send good money after bad.
(20min delay)