Brian Marckx, CFA
CryoPort Making Progress
Our update on CryoPort Inc (CYRX) highlights some recent company press releases and also includes information regarding FedEx's launch of their website dedicated to shipping for the healthcare industry. We view these as all positive developments and progress towards increasing the rate of acceptance of CryoPort's shipping solution.
We have made no changes to our outlook for CryoPort or our related financial model and are maintaining our Outperform rating and $3.85 target price on shares of CryoPort.
CryoPort's 2011 fiscal year ended March 31, 2011. Based on timing of the 2010 10-K, we estimate the company will file the 2011 10-K somewhere around the third week of June. We will provide another update following the 10-K filing.
See below for our access to our full 22-page report on CYRX.
Progression with Customer Support Infrastructure
In an April 21, 2011 press release CryoPort announced the appointment of Cindy Glick as V.P of Client Care and Development. Ms. Glick will spearhead establishment of around-the-clock customer contact centers which will provide support and order entry services. CryoPort's press release notes that they expect to launch 24/7 support services within 90 days (i.e. ~ July). Prior to joining CryoPort, Ms. Glick held a senior consulting role providing strategic and customer services advice to companies such as Allergan and Countrywide.
CryoPort also notes that they are working with PFITECH to help in building out the infrastructure for their call centers, which are expected to initially be placed in California, Hawaii and the Philippines. PFITECH is a consulting firm specializing in areas such as logistics outsourcing, IT and technical staffing.
Marketing Personnel Hired
CryoPort notes in an April 7, 2011 press release that the company hired a Chief Commercial Officer and Senior Director of Sales. The press release indicates both positions will be involved in supporting the sales efforts of FedEx sales teams.
These recent hires (along with anticipated future add-on hiring) should aid in getting FedEx's sales teams thoroughly trained – delays to which (as we noted in our March 3, 2011 initiation report on CYRX) contributed to the lackluster launch of CryoPort Express.
DHL IT Integration Completed
CryoPort announced on April 4, 2011 that they have completed the integration of their web portal with DHL's ordering and billing systems. Integration of the IT systems means DHL customers can now place orders directly with CryoPort and receive preferred DHL shipping rates. CryoPort's systems integration is now completed with both FedEx and DHL.
FedEx Launches "FedEx HealthCare Solutions" Website. CryoPort Boldly Displayed
FedEx debuted their FedEx HealthCare Solutions website on May 16, 2011 (link here… http://www.fedex.com/us/healthcare/temp-control/index.html). Per FedEx's press release, the website is "designed specifically for members of the healthcare industry" and "offers one stop for healthcare customers looking for information covering all their transportation and logistics needs." The website provides information on FedEx's temperature controlled shipping services and allows customers to place and track orders.
On the website there is a highly visible tab titled "Deep Frozen Shipping." Upon clicking on the tab, information specific to CryoPort's services are displayed (copied below is a screen-shot of a portion of the page).
At the bottom of the page is a link to "Download our FedEx Deep Frozen Shipping overview." This link (http://images.fedex.com/us/healthcare/pdf/DeepFrozenShippingOverview.pdf) opens a 2-page pdf file describing CryoPort's Express Shipper and shipping services (FedEx brands it as "FedEx Deep Frozen Shipping Solution"). The top of the pdf, under the bolded headline, "Uncompromised Service – and Peace of Mind", notes that "The FedEx Deep Frozen Shipping Solution combines innovative liquid nitrogen dry vapor technology with logistics management to provide you with the highest level of integrity and security for your high-value frozen shipments worldwide." Below are screen-shots of the pdf file.
For a free copy of the full research report, please email scr@zacks.com with CYRX as the subject.
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