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.
This week, iBio issued a new FWP report highlighting the “New Thrusts to Drive Shareholder Value.”
- CORE: Differentiate FastPharming
- ADJACENCY: Enter high-growth 3D Bioprinting materials segment
- FACTORY SOLUTIONS: Adding cannabis to existing tobacco “design & build” turn-key facility model
- THERAPEUTICS: Advance IBIO-100 to create partnering opportunities in the fibrotic diseases market
The new FWP report did a great job summarizing the four thrusts above, and ALL investors should study the information thoroughly to appreciate the essence of iBio’s strength.
What I like to do this week is to express my opinion to address the incredible DISBELIEF in iBio that kept the price at the severely undervalued price of 60 cents.
First, as a biotech company, iBio should be valued based on its potential to generate revenues in the near term. Currently, iBio SIGNED agreements with CC-Pharming and United Therapeutics. Both hold promise to create substantial revenues based on its potential. Yet, the market accorded a value of only 60 cents to iBio to reflect a market cap of about $14.5 million.
By taking into consideration that the recent 10K reflected a total asset of $30.6 million, sellers are turning a blind eye to the two agreements as if they don’t exist.
Instead of discussing conspiracy theories, I like to focus on why I believe revenues will appear sooner than expected. And the sellers underpriced $IBIO so SEVERELY that it is a matter of time before price bounces back violently to the upside to reflect its real value.
iBio and CC-Pharming Business Collaboration in China
The Chinese company has already built an 8,000+ square foot pilot plant-based facility in Beijing using iBio’s Factory Solutions.
Don’t believe it? Check out the Chinese publications in China talking about CC-Pharming building the highly automated plant-based facility.
Below is an excerpt with the translation included:
Notice the highlighted sentence, “The use of plant transient expression technology to produce pharmaceutical proteins is still in its infancy in the world, and China has the opportunity to develop and take the lead.”
With its massive patient population, I can see the high probability of China adopting iBio’s plant-based tech to develop affordable biologic drugs.
Furthermore, recent PR regarding iBio and CC-Pharming expand business collaboration in China focuses on the “exclusive, royalty-bearing commercial license to iBio’s bio-better rituximab (“iBio Rituximab”) product candidates for the territory of China.”
“The expanded scope of our partnership with CC-Pharming aims first to advance our plant-derived, bio-better rituximab toward commercialization in the near term, while we jointly explore opportunities to develop and commercialize additional high-value products,” commented Robert B. Kay, iBio’s Chairman, and CEO.
The current value of the CC-Pharming deal as reflected in the market cap = $0 Value
- CC-Pharming 8,000+ square foot facility built in Bejing using iBio’s Factory Solutions –> $0 value
- CC-Pharming exclusive, royalty-bearing commercial license to iBio’s bio-better rituximab (“iBio Rituximab”) product candidates for the territory of China –> $0 value
My opinion on the value of CC-Pharming deal
Seriously! Are you kidding me here? Sellers are turning a complete blind eye on the potential revenues sharing of selling bio-better rituximab to the patient population of China.
My opinion is that once China FDA approves bio-better rituximab to market in China, the PR alone is going to spike price VIOLENTLY to the upside. BUT price should not have to spike hard violently; price should at least reflect some price appreciation on the possible approval from China FDA.
Here is the question I asked myself, “Why would China NOT approve bio-better rituximab if it proves to be safe and effective. Not to mention that bio-better rituximab can be more effective and affordable than the originally-approved rituximab? Nevertheless, my opinion is that China FDA approval will COMPLETELY REMOVE all doubts even to the staunchest disbelievers!
iBio Master Services Agreement with Lung Biotechnology PBC, a subsidiary of United Therapeutics Corporation
I believe the development will have more to do with the science of 3D bioprinting of solid-organ scaffolds for human transplants.
So, how ready are we in developing scaffolds for human transplants?
I did some research and liked to share what I found below. Collagen scaffolds are not new here. The development has started as far back as 2008!
Eleven years later, CollPlants patented their version of rhCollagen, which United Therapeutics has an exclusive license throughout the universe.
In 2015, 3D Printing of Scaffolds for tissue regenerations applications was discussed.
Now, in 2019, United Therapeutics mentioned the following in their Q2 2019 Results – Earnings Call Transcript:
Takeaways from the above excerpt:
- Create scaffolds for organs, especially for lung
- Established cell expansion
- Cellularized for transplantation
- Nice core competency at United Therapeutics
- This year will expand cell populations to over 1 trillion cells
- Heart, lung, or kidney needs between 5 billion to 10 billion cells
- Have demonstrated scale-up capability for commercialization
- Cellularizing scaffolds with an individual’s own cells
- require no immunosuppression after the organ is transplanted
The comment from the CEO on United Therapeutics progress over organ manufacturing was quite revealing. I believe 3D bioprinting of solid-organ scaffolds for human transplants is moving closer to reality than most of us think. I can see iBio getting busy mass-producing CollPlant’s rhCollagen for United Therapeutics’ lung subsidiary. The testing of 3D bioprinting of scaffolds for cellularization is continuing at a faster pace, in my opinion.
The current value of the United Therapeutics MSA deal as reflected in the market cap = $0 Value
My opinion on the value of United Therapeutics MSA deal
Seriously, I believe the pre-market high of $3.60 reflected the fair value of $IBIO after the MSA deal with United Therapeutics is signed. Yet, sellers pushed the price down to reflect 0 value.
Market dynamic always brings volatility to price action, which resulted in overbought and oversold situations. In the end, the price imbalance will always find its way back to reflect its real value. The real value of iBio’s two significant deals, CC-Pharming and United Therapeutics, disappeared because there were more sellers than buyers. Eventually, when more news and PRs are released to establish the acceptance of plant-based transient expression technology, new buyers will see the real value and buy the bargain. For those who are still accumulating, you don’t know how lucky you are buying at this dirt-cheap price.
The way I see it, the plant-based transient expression will become the dominant biologic manufacturing process in China. What will be the value of $IBIO then when it begins to collect its share of revenues? What will be the value of $IBIO when United Therapeutics’ lung subsidiary begins to make significant headway with 3D bioprinting of solid-organ scaffolds for human transplants? Yes, the amount can be mind-boggling. Giving these scenarios, don’t you think the market cap of $IBIO at $14.5 million (valuing at 60 cents a share) is quite a STEAL?
$IBIO is a stock I buy to hold and WAIT!
My 2 cents