Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here. Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.
Uh Ohh! The tariff war intensifies and the market doesn’t like it.
As seen on the weekly chart, this week bar penetrated the downtrend line with a solid red bar. The next support I see is the weekly 79 & 89 MAs (the thick blue and red dash lines). I prefer to see that the tariff negotiation improves over next week such that the 79 & 89 MA supports will hold.
This week reflected extreme volatility in my port due to price action on $IBIO.
On Monday after the market close, iBio released the PR, “iBio Inks 3D Bioprinting Agreement.”
The biggest surprise is the parent company of Lung Biotechnology PBC is United Therapeutics Corporation ($UTHR), a 3.5 billion market cap company.
The Master Services Agreement (MSA) involves the following:
- development of a scalable purification process for rhCollagen tailored to the biofabrication of lung scaffolds that United Therapeutics licensed from CollPlant Biotechnologies ($CLGN)
- develop cGMP supply of the material for clinical trials
- anticipate the need for commercial quantities of rhCollagen-based bioinks
- additional projects focused upon process optimization and capacity expansion
- Capacity expansion will employ iBio’s Factory Solutions capabilities
The news is the BEST that iBio has ever seen, and the MSA agreement validates the technology of plant-based protein expression. Since the deal is to provide production of licensed CollPlant’s rhCollagen for clinical trials, let go to CollPlant’s presentation to take a quick look.
Voila! rhCollagen is a plant-derived biomaterial. The above page from CollPlant May 2019 presentation showed that plant-derived cells bind better than animal extracted cells. Another strong evidence in favor of plant-based protein expression over mammalian cell systems.
Let’s take a look at how big the transplant market is. Here is another slide from CollPlant presentation.
Ok, the above showed some impressive big numbers for the lung transplant.
But clinical trials must be conducted and prove efficacy before the real 3D bioprinted lung can be transplanted. As mentioned in the MSA agreement, iBio will develop cGMP supply of the material for clinical trials. And this is where iBio’s larger (possibly the largest in the world), and a highly automated plant-based facility comes in handy. To prepare for clinical trials, Lung Biotechnology PBC (a subsidiary of United Therapeutics Corporation) will need a lot of CollPlant rhCollagen to be ready. In other words, iBio may be able to generate revenues sooner than many thought regarding this MSA agreement.
In summary, iBio’s MSA agreements with United Therapeutics’ subsidiary signified the complete transformation of iBio CDMO. The recent launching of the new sterile Fill-Finish service as part of the iBio CDMO makes a lot of sense now. The Fill-Finish services enable iBio to mass-produce CollPlant’s rhCollagen, and then store in a bottle formatted for bioprinting.
Btw, here is an excellent article that gave very comprehensive coverage of iBio’s plant-based facility, “Commercial‐scale biotherapeutics manufacturing facility for plant‐made pharmaceuticals.” There is an interesting tidbit from the article that you would see as a pleasant surprise.
The “Acknowledgments” at the bottom of the 2015 article included the following sentence, “and a private agreement with United Therapeutics (Silver Spring, MD).”
Whoa! United Therapeutics is very well aware of iBio’s plant-based facility long before the MSA agreement. For a company that needs a LOT of CollPlant’s rhCollagen for clinical trials, what better facility than iBio’s large, and highly automated facility?
So why would price fall off the cliff after a pre-market run-up to the high of $3.60 before the market opened on Tuesday morning? My opinion is that a lot of short-sellers still think of iBio as the “old” iBio without doing any DD of its transformation over the years. It is POSSIBLE that the short-interests of iBio after Tuesday mega-volume 34+ million shares might have gone through the roof in iBio. Before the United Therapeutics news, short interest was a paltry 91,300 shares. I’m curious if the short-interests has ballooned to millions of shares.
The advent of the biosimilar and the Gene and Cell Therapy (CGT) markets can open the door of opportunity for iBio’s plant-based protein expression. iBio’s FASTPharming technology can mass-produce FASTER and CHEAPER biomaterials than the mammalian cell systems that dominated the biologic drugs manufacturing in the past decades.
The United Therapeutics deal is the game-changer that provided the first acceptance of plant-based protein expression by a BP with $3.5 billion market cap. The SPEED of the production, as in iBio’s FASTPharming, is precisely what the CGT market needs!
I plan to hold $IBIO until the plant-based protein expression becomes the standard method of production for biosimilar and the CGT markets for maximum gain.
Last Thursday, “LRAD® Corporation Announces $1.0 Million in New Defense Orders“
Notice the orders were for Air Force and a NATO army for the LRAD 500X and LRAD 1950XL; thus, it is NOT the second Army order mentioned by the conference call (see copy/pasted below) which is for the 450XL.
There are a lot of irons in the fire for LRAD. Please read my previous week thought if you are interested to learn more.
Current positions (in alphabet order):
Stocks = $AEMD $IBIO $LRAD
Call Options = $TRXC
Up >20% YTD
My 2 cents
From my camera: