Another brick in the wall
NeoStem closes acquisition of Amorcyte, another step in its drive toward cell therapy focus
Under the terms of the deal, NeoStem issued 5.8 millionshares as base stock consideration, and will issue up to 4.1 million commonshares if certain milestones are met. NeoStem also issued warrants to buy 1.88million shares of common stock, exercisable over a seven-year period, for$1.466 per share. NeoStem also announced it will pay certain earn-out paymentson sales.
Based in Allendale, N.J., Amorcyte is a virtual company thathad been spun out of Progenitor Cell Therapy, which NeoStem acquired inJanuary.
The acquisition of both companies positions NeoStem toachieve its mission of capturing the paradigm shift to cell therapy.
Paul Schmitt, managing director of Novitas Capital, thelargest investor in Amorcyte, says that after a successful Phase I clinicalstudy of Amorcyte's lead product candidate, AMR-001, the timing was right for amerger.
"We were introduced to NeoStem, and everything fell intoplace from there," he says.
AMR-001 is an autologous, bone marrow-derived,pharmaceutical-grade, cell-based product that uses a cell population enrichedfor CD34+CXCR4+ cells. Studies have shown that these cells act as a naturalrepair mechanism, releasing from bone marrow and traveling to the damagedregion of the heart following an acute myocardial infarction (AMI).
Of the approximately 800,000 Americans who suffer an AMIeach year, approximately 20 percent, or 160,000 patients, remain at risk forprogressive deterioration in heart muscle function—and as a consequence,increased risk for future major adverse cardiac events. AMR-001 targetstreatment of this unmet medical need.
According to Dr. Robin L. Smith, chairman and CEO ofNeoStem, the closing of the company's acquisition of Amorcyte "represents aleap forward for NeoStem into clinical development and the furtherance of ourmission to develop a product portfolio of cell therapy products that leveragethe body's natural abilities to heal and fight disease."
"We believe that AMR-001 represents a potential breakthroughtherapy for a large unmet medical need," Smith says. "We see tremendouspharmacoeconomic benefit in this therapy, which we believe could change boththe clinical adverse events associated with serious heart attacks and improve apatient's quality of life, all with one therapeutic intervention."
Since Amorcyte outsourced all of its work, Schmitt says itmakes sense to have Dr. Andrew L. Pecora, chief medical officer of NeoStem andchief scientific officer of Amorcyte, on hand to oversee further development ofAMR-001.
Pecora says treatment with AMR-001 involves infusion of anactive population of these cells directly into a patient's heart via anintra-coronary catheter six to 11 days after an AMI (i.e., after the "hot," or inflammatory, phase) and as such,complements the body's natural rescue mechanism for those cells that facehypoxic stress as a result of an increased workload.
Pecora says the team is encouraged by the Phase I trialresults and looks forward to moving AMR-001 forward toward commercializationthrough NeoStem.
"Through NeoStem's preclinical very small embryonic-likestem cell (VSEL) platform, the Phase I-ready autoimmune disease productcandidates of its Athelos subsidiary and now through AMR-001, NeoStem seeks tofulfill the promise that an individual's own cells hold the potential to bothheal and transform the way medicine is delivered," he says.
Pecora says there are data from several published clinicaltrials, including NeoStem's, demonstrating the potential effectiveness of acell-based therapy for preserving cardiac function and preventing the adverseclinical events that usually follow a large myocardial infarction.
"Our clinical trial of AMR-001 yielded significant results,forming the basis for the Phase II trial," he says.
NeoStem plans to commence a Phase II clinical study onAMR-001 for the treatment of AMI by the first quarter of 2012.