NeoStem closed on its acquisition of Amorcyte, a development-stage cell therapy company focusing on cardiovascular disease treatments, following approval by shareholders of both companies on Friday.
NeoStem issued 5,843,483 shares in base stock, which has a value of about $3.97 million based on Friday’s closing price of $0.68 a share, and will issue up to 4,092,768 shares of common stock tied to achieving business milestones, at a value of $2.78 million. As part of the deal, NeoStem issued warrants to purchase 1,881,008 shares of common stock exercisable over a seven-year period at a price of $1.466 per share, for a total roughly $2.76 million. Upon successful commercialization of Amorcyte's AMR-001, the company said it will pay certain earn-out payments on sales.
The deal’s value has fallen by about half since last July, reflecting a drop in the company stock price from the $1.40 per share range the week the acquisition was announced. Shares had traded as high as $3.50 last year after the company joined the Vatican's Pontifical Council for Culture in announcing a collaboration to research and raise awareness of adult stem cell therapies. The council’s charitable foundation STOQ International committed $1 million toward the collaboration.
The company in July announced plans to fund research and strengthen its cash balance by raising $16.5 million—13,750,000 units at $1.20 per unit—through a public offering that closed in August.
NeoStem also restated that it intends to launch a Phase II clinical trial for Amorcyte's lead product candidate, AMR-001, for the treatment of acute myocardial infarction (AMI) no later than the first quarter of 2012—a trial the company announced when it announced plans to acquire Amorcyte in July. Amorcyte had been spun out of Progenitor Cell Therapy, which Neostem acquired in January 2011.
AMR-001 is an autologous, bone marrow-derived, pharmaceutical grade cell-based product that uses a cell population enriched for CD34+CXCR4+ cells. AMR-001 involves infusion of an active population of these cells directly into a patient's heart via an intracoronary catheter 6 to 11 days after an AMI, after the "hot", or inflammatory, phase.