Access Update- #18

In case you’re wondering why Cytori Therapeutics (Nasdaq: CYTX) is down on heavy volume today, Artecel – the company that won the patent suit referred to in Update #17 – issued a press release last night. This subhead in the release is what likely spooked investors:

“Cytori and UC lose rights to Adipose-Derived Stem Cells; business agreements and activity under other patents likely affected.”

Keep in mind that the verdict was announced over a week ago. Cytori has maintained that the patent will not affect current or future operations.

According to Cytori, the disputed patent is over isolated adipose derived stem cells in an environment that is free from other materials .

The output of Cytori’s Celution System is a mixture of regenerative cells, of which stem cells only make up 3% to 5% of the material. In fact, Cytori says that using just the stem cells with the fat grafts would not work. It’s this rich soup of regenerative cells that allows the fat to vascularize.

We just got off the phone with both parties and as you can imagine nothing is quite black and white. We’ll be working through the weekend to get to the bottom of this and will update you as soon as we have more concrete information.

Marc Lichtenfeld
Director of Research
Access Research Group

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