Cytori Looks for Fat Profits

"After a complete mastectomy, an implant is a very viable reconstruction option," says Eric Daniels, a surgeon who serves as senior director of business development for Cytori. "But with partial breast removal, that isn't the case. There are zero options for these patients.

"When we look at the landscape, we see a real opportunity to help these patients" going forward.

Indeed, Cytori portrays its stem cell-based treatment as ideal for this underserved group. The company describes fat as "the richest source of stem cells" in the entire body. Moreover, the company says that it takes a limited amount of fat -- "less than half a Coke can full" -- to perform its rapid therapy.

Unlike fat itself, once used with limited success for breast reconstruction surgery, Cytori says that fat-derived stem cells bring needed blood supply to reconstructed breasts. Thus, the company says that breast reconstruction surgery patients should finally have an option that will work and actually last.

WBB Securities analyst Stephen Brozak looks for Cytori to begin marketing its new therapy late this year and start racking up sales of $85 million annually from the treatment by 2010. Brozak has based his $7.20 price target on Cytori's stock -- which currently fetches $5.81 a share -- on future revenue from the company's breast-reconstruction application alone.