Access Update- #17

It’s been an interesting week or so for Cytori Therapeutics (Nasdaq: CYTX).

It started off with the University of California, losing a court decision over who owns the rights to a stem cell patent. Cytori licenses the patent from UC. However, Cytori is not using and had no current plans to use the licensed patent. It will not impact their business. Cytori’s patents protect the adipose derived cells that are harvested from patients and reintroduced into their own bodies, so there shouldn’t be any cause for concern.

On Monday, the company revealed that it will receive a $425,000 grant from the Fraunhofer Institute for Cell Therapy and Immunology to develop treatments for ischemic stroke. The condition is caused by a blockage of blood supply to the brain. The collaboration between the two organizations hopes to show that the Celution System can restore blood flow and reduce the injury to the brain.

Saving the best for last, today it was announced that Cytori will be added to the Russell 3000 index. The index measures the performance of the 3,000 largest publicly traded companies in the United States. This is important because there are funds that track the index and will now have to buy shares of Cytori. The most prominent is the Russell 3000 Index ETF (NYSE: IWV), which has a market cap of nearly $3 billion.

More Picks On the Way

Don’t think we’re resting on our laurels with the substantial gains in our first two recommendations. We’ve been hard at work digging through research on various companies. When you first signed up, we mentioned that this is a research-intensive process, and that we throw away 90% of the ideas that we come across. That has been the case lately. In the past few weeks we 86ed:

* An interesting bio-terror play – but one whose CEO is using the company as a personal ATM
* A health services stock that was too small to recommend
* A diagnostics company with a solid business, but a stock that has gotten ahead of itself and is overpriced.

The good news is that we think we’re on to something. The company has an approved product that is saving lives, but is still very early in its sales efforts. The stock is inexpensive yet poised for substantial growth. Next week, we’re going to call on some of our sources that are primarily on the short side to see if they have a bearish argument against this name.

We’ll keep you posted.

Have a great weekend.

Marc Lichtenfeld
Director of Research
Access Research Group

Stock
Symbol
Current Price
Comments

Cytori Therapeutics

CYTX

$6.87

Buy up to $8

Electro-Optical Sciences

MELA

$7.83

Buy up to $5.75