Ladenburg Initiates BioTime Shares With Buy, $6 Price Target

BioTime, Inc. (NYSEMKT: BTX) is in the midst of a restructuring that is aimed at unlocking shareholder value by separating non-core assets and the accelerated development of cell therapy programs in ophthalmetry, aesthetics and orthopedics, Ladenburg’s Kevin DeGeeter said in a report. He initiated coverage of BioTime with a Buy rating and a price target of $6.

Analyst DeGeeter believes the company would be able to unlock significant shareholder value by simplifying its operating and financial reporting structures. BioTime has already spun off Asterias and OncoCyte, which together accounted for $34.2 million in operating expenses or close to 50 percent of the company’s total spending in 2015.

BioTime has retained common stock in these two entities, valued at $141.9 million. The further separation of non-core assets could lower reported operating expenses by another 10-15 percent, unlocking an additional $50 million in shareholder value, DeGeeter commented.

Catalysts

The analyst expects management to make several announcements over the next six months, which would serve as catalysts for BioTime’s shares. These include:

1. Presentation of proof-of-concept data from OpRegen, an ophthalmic program for dry AMD, in the first half of 2017
2. Proof-of-concept data for DeGeeter’s lead facial aesthetics program, Renevia, in Q1 of 2017
3. Completion of at least one more divestiture or deconsolidation to further reduce non-core expenses

“By our estimates OpRegen has peak end market revenue potential of $775M+ while peak sales of Renevia for facial aesthetics may exceed $250M,” DeGeeter wrote.

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