What is Next for Histogenics, Pending FDA Meeting and Analysts Target Price

Histogenics Corporation (NASDAQ: HSGX) is a clinical-stage company, focuses on the development of restorative cell therapies. The company offers NeoCart, a tissue implant, which is in Phase III clinical trial to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee.

On September 5, 2018 HSGX announced that its Phase III clinical trial did not meet one of its primary endpoints, a measurement of pain and knee function after a year compared to microfracture surgery. The company’s stock dropped 67 percent that day.

Data from the Phase III trial showed that approximately 71 percent of the patients receiving NeoCart exhibited clinically meaningful improvements in pain and function a year after having the cell-regenerating product implanted, compared to 62 percent of people who had undergone microfracture, a common knee surgery, according to the company. But that was not enough to meet the endpoint, or trial goal, that Histogenics initially established in 2009.

The company still plans to seek FDA approval based on the data released in September. The company could be helped by the fact that the FDA has changed the guidelines for cartilage repair studies since Histogenics started its trials.


Recent Events

October 10, 2018. Histogenics announced the closing of its previously announced underwritten public offering of 26,155,000 shares of its common stock and warrants to purchase up to 19,616,250 shares of common stock, at a combined purchase price of $0.65 per share of common stock and accompanying warrant. The net proceeds to Histogenics from this offering are approximately $15.4 million, after deducting underwriting discounts and commissions, and estimated offering expenses payable by Histogenics. https://finance.yahoo.com/news/histogenics-corporation-announces-closing-public-200100716.html?_fsig=r.bZBodxO.VFxR8gXUytfQ–


September 26, 2018. Histogenics announced that the U.S. Food and Drug Administration (the FDA) has granted a Type C meeting on October 30, 2018 to discuss the top-line results from the NeoCart Phase 3 clinical trial and Histogenics’ planned Biologics License Application submission. https://finance.yahoo.com/news/histogenics-meet-fda-discuss-neocart-200500467.html



NeoCart, their Phase 3 investigational product utilizes many aspects of their restorative cell therapy platform for orthopedic use. NeoCart combines breakthroughs in bio-engineering and cell processing to enhance the autologous cartilage repair process. The restorative cell therapy merges a patient’s own cells with a fortified three-dimensional scaffold designed to accelerate healing and reduce pain, with patients receiving functional living cartilage at the time of treatment. NeoCart’s ability to function like a cartilage upon implantation with our proprietary bioadhesive may allow earlier weight bearing and return to activities.



Histogenics Corporation, a clinical-stage company, focuses on the development of restorative cell therapies in the United States. The company offers NeoCart, a tissue implant, which is in Phase III clinical trial to treat tissue injury in the field of orthopedics, specifically cartilage damage in the knee. It has an exclusive channel collaboration agreement with Intrexon Corporation for the development and commercialization of allogeneic genetically modified chondrocyte cell therapeutics for the treatment or repair of damaged articular hyaline cartilage in humans. Histogenics Corporation was founded in 2000 and is headquartered in Waltham, Massachusetts.



9/6/2018            Needham & Company LLC           Boost Price Target          Buy              $5.00

9/5/2018            BTIG Research                                Downgrade        Buy ➝ Neutral $3.50

9/5/2018            HC Wainwright                              Reiterated Rating            Buy              $2.00

Source: marketbeat.com



Financial review

Q2 2018

Loss from operations was $(7.3) million in the second quarter of 2018, compared to $(6.4) million in the second quarter of 2017.  The increase in operating expenses was due to an increase in both research and development expenses and general and administrative expenses.

Research and development expenses were $4.5 million in the second quarter of 2018, compared to $4.2 million in the second quarter of 2017.  The increase was primarily due to increases in consulting, salaries and materials in connection with the potential submission of a BLA for NeoCart with the FDA and was partially offset by a reduction in patient costs related to the NeoCart Phase 3 clinical trial, for which enrollment was completed in June 2017.  General and administrative expenses were $2.8 million in the second quarter of 2018, compared to $2.2 million in the second quarter of 2017.  The increase was primarily due to higher salaries and consulting expenses related to increased activities to support the potential commercialization of NeoCart.

Net loss attributable to common stockholders was $(3.7) million in the second quarter of 2018, or $(0.13) per share, compared to $(5.5) million, or $(0.25) per share, in the second quarter of 2017.  The decrease in net loss attributable to common stockholders is primarily due to the conversion of convertible preferred stock issued in connection with the 2016 private placement into common stock and a change in the fair value of the warrant liability which generated a gain in the second quarter of 2018, both of which were partially offset by an increase in operating expenses.


Stock influences and risk factors

They have been dependent on the success lead product candidate NeoCart. If they are unable to ultimately obtain FDA approval for NeoCart, commercialize NeoCart in the future, or experience significant delays due to manufacturing or otherwise in doing so, the business will be materially harmed.

They have incurred significant losses since inception and anticipate that they will continue to incur substantial losses for the next several years.

They will require substantial additional funding, which may not be available on acceptable terms, or at all, and, if not available, may require them to delay, reduce or cease product development activities and operations.


Stock chart

On Tuesday, October 23, 2018, HSGX shares were trading at $.69 on traded volume of 2.2 million shares. The current RSI (14) is 45.15

At $.69, HSGX shares are trading below their 50 DMA and 200 DMA of $1.22 and $2.25 respectively.


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