Matter of Time

I watched the Netflix documentary Matter of Time the other night. The film features Eddie Vedder and his wife Jill. They co-founded the Epidermolysis Bullosa Research Partnership. Pearl Jam became one my favorite bands when I went to a concert and heard the song Yellow Ledbetter. There’s a lyric “Make me cry”, but is often misheard as “Make me fries”. During the movie, this spud cried. Yes folks potatoes can “weep” or leak liquid when cut (pssst we release moisture).

Epidermolysis Bullosa is a rare genetic skin disorder. People suffering with EB lack critical proteins that bind the skin’s layers. Thus, the skin blisters or tears off which leads to severe pain. Ladies and gentlemen, I know what it’s like to have one’s skin peeled off. No Bueno

Roughly one year ago there was a treatment approved to treat Recessive Dystrophic Epidermolysis Bullosa (RDEB). It is a gene therapy called Zevaskyn created by Abeona Therapeutics, Inc. (ticker: ABEO). Skin samples are taken from a patient and sent to Cleveland. You read that right: the mistake on the lake. Those cells are genetically modified in order to produce collagen and then grown into sheets the size of a credit card. The new skin is surgically applied at a qualified treatment center.

Stanford Medicine Children’s Health

Children’s Hospital Colorado

The University of Texas Medical Branch at Galveston

Ann & Robert H. Lurie Children’s Hospital of Chicago

New York-Presbyterian/Columbia University Irving Medical Center

The first patient came through their network during the 4th quarter of last year. I have spoken with The Stock Pawnstars and some of their friends in the industry. The science behind this company is rock solid but the setting of financial/operational expectations with Wall Street has been a weakness. Thus, Friguy’s numbers will be much more conservative than analyst expectations. In 2026, this spud is using 25 patients and a price of $2.3 million = $57.5 million in revenue and $43 million in gross profit. The out year we are using 50 patients, which yields $115 million in revenue and $86 million in gross profit. Management claims that the company can make money at 3 patients per month. If correct, the firm would have between $150 mil -$200 mil of cash on its balance sheet relative to its roughly $300 million dollar market capitalization. This seems cheap to me.

I really like the recent addition to the Board of Directors, Keith A. Goldan. He will also serve as Chairman of the Audit Committee. Goldan brings over two decades of financial experience in biotechnology and is currently the CFO of Syndax Pharmaceuticals. I like my fries golden, so this is a good development. It’s also comforting to know that Jacob Ma-Weaver of Cable Car Capital is a large owner of the stock. He has a solid track record in micro-caps and biotechnology stocks. Could an activist emerge if expectations aren’t met, the boys think so. Since it’s baseball season, Friguy thinks this can be a three-bagger without the bonus. This stock becomes a super value meal deal if one of its other cell/gene therapies in its pipeline gets approved and goes commercial.