In May I wrote an article with a thesis stating that BioLife Solutions (BLFS) is an undervalued and de-risked, long-term life sciences investment opportunity, but a sustained negative sentiment surrounding the regenerative medicine sector, a lack of awareness of BioLife's speculative CryoStor and HypoThermosol biopreservation media core business segment, and a general market decline were holding back shares. Despite the large gap up to $3.60 a share earlier this month following BioLife's announcement of a new contract manufacturing agreement, shares have retreated to the low $2s. Nevertheless, BioLife's latest announcement of over 130 embedded regenerative medicine clinical trials should help elucidate BioLife's compelling growth prospects. Thus, with a significant long-term revenue opportunity, I see no reason to alter my bull thesis given the increasing value of BioLife's core business segment.

Some key highlights from BioLife's latest announcement are as follows:

• BioLife now has over 12 Phase 3 embedded clinical trials, and over 60 in Phase 2.
• These trials consist of the largest patient populations across all indications, including various cancers, heart disease and MS.
• Specific to cancer, BioLife has acquired over 12 clinical customers.
• Each embedded clinical product represents a $500,000-$2 million market opportunity in the event that the product receives regulatory approval, and the clinical customer commences large-scale manufacturing.

My initial analysis of BioLife's biopreservation media led me to conclude that 13 out of approximately 100 clinical products embedded (at that time) with Cryostor and HypoThermosol were likely to receive regulatory approval (see initial report for more information). I calculated that BioLife could generate around $20 million in revenue by 2018 strictly from these assets. After BioLife's latest announcement, the confirmed addition of over 30 embedded clinical products warrants an update to my initial revenue projection.

As a reminder, BioLife's revenue opportunity for each embedded clinical product is contingent on widely utilized clinical success rates for oncology and non-oncology indications. The clinical demand and revenue structure for these products are as follows:

1. Clinical customers initially order small quantities to conduct comparative experiments of BioLife's biopreservation media products against home brew and possibly other non-optimal commercial formulations (e.g. home-brew in a bottle)
2. Once preservation efficacy results are observed, clinical customers complete further validation studies again using small quantities
3. Demand increases as customers progress through clinical phases, since patient enrollment increases so more cell-based doses are manufactured
4. Typical clinical customers are valued anywhere between $20,000 to $100,000 in product revenue from pre-clinical to Phase 3. For our intents and purposes, we average it to $60,000 per product
5. I approximate that out of a maximum $60,000 per product, BioLife generates 5%, or $3000 in revenue during pre-clinical; 20%, or $11,400 during Phase 1; 30%, or $13,680 during Phase 2; and the remaining 45%, or $31,920 during Phase 3
6. If and when a product receives regulatory approval and the associated company commences large-scale manufacturing of the product, CEO Rice estimates revenue potential to be anywhere between $500,000 to $2 million. For my intents and purposes, I average it to $1 million per product

As of 2011, the probability from Phase 1 to FDA approval over the last decade for oncology was 6.7%, as compared to 12.1% for all other therapeutic indications. This information in conjunction with the probability of success for each clinical phase--all of which can be reviewed in my initial report--allows me to approximate BioLife's revenue opportunity for Cryostor and HypoThermosol. Of course, this assessment is contingent on whether the embedded clinical product receives regulatory approval and the associated company commences large-scale manufacturing of the product. I initially calculated that BioLife is statistically supported to produce anywhere between $6.5 million to $26 million in annual revenue by 2022.

With the addition of 30 embedded clinical trials, I calculate that five of these clinical products (one in Phase 3 and four in Phase 2) are statistically supported to receive regulatory approval by 2018. Overall, I calculate that BioLife is now supported to generate approximately $23 million in revenue by 2018. This reflects a $3 million/year hike in potential revenue by 2018. Furthermore, BioLife's annual revenue could increase by $4 million by 2020, coinciding with regulatory approval for four of the Phase 2 clinical products. As a result, I see no reason to amend my bull thesis as BioLife continues to improve its future prospects.