Intrexon said today it will acquire Medistem for $26 million, in a deal that will integrate the acquired company’s endometrial regenerative cells (ERCs) and the acquirer’s integrated synthetic biology platforms, with the goal of engineering new cell-based drug candidates.

The combined company plans to develop two classes of clinical products—stem cells designed for therapeutic delivery of secreted proteins, and exosomes capable of delivering miRNAs and proteins, Thomas Reed, Ph.D., Intrexon’s CSO, said in a statement.

ERCs are universal donor adult stem cells that stimulate new blood vessel formation and are capable of generating different tissues including heart, brain, pancreas, liver, bone, cartilage, and lung. The companies say ERCs have the potential to provide treatments for conditions such as cancer, wound healing, and cardiovascular disease.

ERCs are derived through noninvasive methods, and can be gene-modified to secrete powerful therapeutic effectors using Intrexon’s technology, which include the UltraVector® platform, the Cell Systems Informatics technology, and the RheoSwitch Therapeutic System®.

Intrexon and Medistem say the ERCs are economical and scalable to manufacture, are superior therapeutically to other stem cell types for some indications based on peer-reviewed studies, and have been shown safe in animal and pilot human studies.

“We look forward to further refining ERCs to produce proteins and bioactive RNAs, both of which hold great promise to be used as therapeutics to treat conditions such as cardiovascular disease and cancer,” added Samuel Broder, M.D., svp of Intrexon’s health sector and former director of the NIH’s National Cancer Institute.

Medistem stockholders will receive 27¢ cash and $1.08 in Intrexon common stock in exchange for each share of Medistem common stock they now hold, based on the 20-day, volume-weighted average price of Intrexon’s common stock immediately prior to closing.

The deal is subject to Intrexon completing a due-diligence review of Medistem and its technology, customary closing conditions and Medistem stockholder approval.

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