RepliCel due diligence.

Hatchworks has conducted due diligence on RepliCel, a regenerative medicine company focused on aesthetics and orthopedics. RepliCel’s cell therapy products are tailor-made to restore cellular function to rejuvenate aging or sun damaged skin, regrow hair, and repair tendons. Headquartered in Vancouver, Canada, RepliCel went public in 2014 and is listed on the TSX Venture Exchange, under symbol ‘’RP’’.

Capital Structure Report, June, 2020:

• RepliCel’s current market cap is $4.8M.
• Raised a total amount of $24.1M through equity funding.
• To-date, RepliCel has generated $3.1M in revenues (upfront licensing payments).
• Monthly burn rate is at around $189,476.
• Net-loss of $1,713.508.

The products that RepliCel currently develop are:

• RCT-01 — For tendon repair. Licensed in China to YOFOTO (China) Health Company. RepliCel and YOFOTO are currently co-developing this product in China.
• RCS-01 — For skin rejuvenation. Licensed in China to YOFOTO (China) Health Company. RepliCel and YOFOTO are currently co-developing this product in China.
• RCH-01 — For hair restoration. Licensed in Asia to Shiseido Company. RepliCel and Shiseido both co-developing the product in Japan.
• RCI-02 — Next-generation dermal injection device to improve the delivery of a variety of injectables in a controlled, precise manner.

It’s worth noting that these products are still in clinical testing phase and not yet commercially available with RCI-02 in prototype & test phase development. The RCI-02 device is also being developed for the injection of RepliCel’s RCH-01 hair restoration and RCS-01 skin rejuvenation products.

As mentioned above, RepliCel are currently partnered with YOFOTO (China) Health Co. and Shiseido Company Ltd. They’re also in active discussions with potential partners in Japan to co-develop and commercialize the tendon, skin, and injector technologies. They expect one or more of these to be announced later this year.

YOFOTO Health Co., which holds around 19.5% of RepliCel shares, completed the construction of its cell therapy manufacturing facility in September, 2019, in order to start developing RCT-01 and RCS-01 in China. However, since the Covid-19 outbreak that started in China, the first production run of RepliCel dermal injectors has been delayed which procedure a critical component of the device.

President and CEO of RepliCel, Lee Buckler said that they experienced several weeks’ delay in their production timeline and are looking for other suppliers and manufacturers and still aiming for a market approval and product launch in 2020. Also, RepliCel postponed its filing of annual financial statements for the year 2019, due to delays caused by the Covid-19 pandemic.

RepliCel diversifies the risk, therefore, if one of their products fail, it still can shift its focus to another product. Another bullish point is that RepliCel has a worldwide patent portfolio (issued and pending) related to its injection technologies and therapeutic products, giving it a strong market position.

For now Hatchworks’ stance is an information brief and Hatchworks does not hold a position in RepliCel as it’s outside our risk tolerance levels as a target and so we keep it on radar.

What is RepliCel?

A regenerative medicine company focused on aesthetics and orthopedics. Their cell therapy products are tailor-made to restore cellular function to rejuvenate aging or sun damaged skin, regrow hair, and repair tendons.

Investors:

• YOFOTO (China) Health Industry Co., Ltd.
• BBVA Asset Management SA SGIIC.

Advisors and Bookrunners:

• Echelon.

What are the risks?

• RepliCel’s business is at an early stage of development and difficulties obtaining regulatory approval, technical deficiencies and other challenges may hinder the development and marketing of their autologous cell therapies.
• RepliCel’s clinical trials may fail to produce successful results or could be suspended due to unacceptable safety risks, which could cause their business to fail.
• RepliCel face significant competition and if they’re unable to successfully compete, their business may suffer a material negative impact.

Competitors:

• RegeneRx Biopharmaceuticals. (RGRX)
• U.S. Stem Cell. (USRM)
• Vitro Diagnostics. (VODG)

Management team:

• David Hall: Chairman.
• Robert Lee Buckler: President, CEO.
• Kevin McElwee: CSO.
• Simon Ma: CFO.

The Hatchworks Team

Legal Disclaimer — This report summary has been generated as a result of Hatchworks’ proprietary company vetting and filtering system. The level of due diligence conducted on investible assets conducted ranges from mediocre to significant, the latter being the case where Hatchworks has explicitly taken strategic positions in. By no means is the information in this file to be relied on as investment advice; this includes Hatchworks’ algorithmic composite score known as ‘Hatchscore’. Hatchworks has not received any compensation for this research. For more information you can reach us at info@hatchworksvc.com. This report is not for distribution in the United States of America. It is closed to U.S citizens. If you are a U.S. citizen, you should delete this report or return to sender.