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WideCells Group: THE INVESTMENT CASE

Shareholders in WideCells in good position to benefit from stem cell therapy advances

WideCells is aiming to be a major supporting player through its development of a stem cell storage business and, having only listed in London last July, its newsflow so far looks to be pointing the way
Stem Cells
INVESTMENT OVERVIEW: WDC The Big Picture
WideCells boss said it has made “significant progress in the commercialisation of our stem cell services"

With stem cell therapies tipped to be the next great advances in the treatment of a range of ailments and conditions, shareholders in WideCells Group PLC (LON:WDC) look to be in a good position to benefit.

WideCells is aiming to be a major supporting player through its development of a stem cell storage business and, having only listed in London last July, its newsflow so far looks to be pointing the way.

In the group’s maiden full-year results statement today, WideCells chief executive Joao Andrade pointed out that it has made “significant progress in the commercialisation of our stem cell services; the roll out of our revolutionary stem cell insurance product CellPlan has now commenced in collaboration with the UK's largest stem cell storage facility, Biovault.”

WATCH: WideCells boss “excited about the months ahead” …

He added that “discussions with multiple other facilities are advancing rapidly; delivery of our first stem cell processing and storage facility in Manchester is on track for Q2 2017”.

He also noted that the group recently appointed the former head of Apple Education, Alan Greenberg, as a non-executive director and vice president of the WideAcademy “to devise a strategy that makes it the thought leader in the stem cell industry.”

The WideCells’ boss said, "Our activities during the period have ideally positioned us to start generating revenues in 2017 from all three WideCells divisions, which work together to create the world's first end to end service solution focused on making cord blood stem cell treatment accessible and affordable globally.”

Like most developing companies, the group - which raised £2mln when it floated on the London Stock Exchange main market - only had revenues of £25,000 for the full-year to December 31 2016, down from £50,644 a year earlier, while its loss for the year increased to £1.361mln, up from £213,056 a year earlier reflecting higher administration costs following flotation.

But Widecells had cash and cash equivalents of £1.149mln at the year-end, up from £33,753 a year earlier.

CellPlan focus …

When the firm announced last November that its CellPlan subsidiary had signed a non-binding letter of intent to offer its stem cell treatment insurance to clients of the human tissue storage facility Biovault Technical, Andrade called the deal “transformational”.

Biovault has a register of over 25,000 customers which WideCells will have access to for an initial five year term.

While stem cell storage costs a few thousand pounds, the cost of the treatments that use them can run into the hundreds of thousands.

WATCH: Biovault tie-up a “landmark development” …

For an average premium of £150 per year, CellPlan provides insurance for up to €1mln of treatment, travel, accommodation and repatriation costs. 

CellPlan is to be based in Porto, Portugal, which gives it access to the wider European stem cell market and from where licences will now be arranged for a rapid roll-out.

Other revenue streams …

Aside from the CellPlan deal, WideCells opened up a “second revenue stream” in December when it inked a letter of intent with a California-based medical device company that could be worth up to £100,000.

Qigenix agreed to pay the sum in three stages so it can use Widecells' Institute of Stem Cell Technology (ISCT) in Manchester to undertake some research.

WideCells’ third revenue stream comes from its blood banking operations, for which the group inked two more outlying deals at the end of January to take it into the rapidly expanding Brazilian umbilical cord cell storage market.

Between them, the two new “reputable” storage and processing facilities had more than 5,000 high net worth clients on their books.

The Brazilian cord blood banking market is projected to be worth almost US$450mln by 2023, making it the largest in South America’s “booming” stem cell industry.

In all, there are 500 of these banks dotted around the world; however, the top ten banks store around half the samples.

Education needed ...

These three strands provide the roots for the optimism of WideCells boss although the share price looks to have failed to respond yet to the opportunities he sees.

WideCells floated  at 11p per share in July, since when the share price has fluctuated, hitting a peak of 16.25p in the middle of October, but this year it has drifted sitting at around 12.25p currently.

According to sources, there was plenty of interest in WideCells’ unique story at flotation, meaning the IPO was oversubscribed. Among the shareholders who came on board at float was Miton Group, which stumped up £500,000.

But it looks like the story needs to be wider known, which is probably where the appointment of the former head of Apple Education comes in.



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WideCells Group Timeline

Newswire
February 16 2017

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