Cytomedix snags Aldagen for $16 million in stock
Cytomedix, Inc. has announced the completion of its acquisition of Aldagen Inc., a privately held developer of regenerative cell therapies based on its proprietary ALDH bright cell technology, in a move that strengthens its foothold in regenerative therapies.
GAITHERSBURG, Md.—Cytomedix, Inc. has announced thecompletion of its acquisition of Aldagen Inc., a privately held developer ofregenerative cell therapies based on its proprietary ALDH bright celltechnology, in a move that strengthens its foothold in regenerative therapies.
"This strategic acquisition of Aldagen provides Cytomedixwith a novel, patent-protected cell selection technology that fits well withour existing commercial products and strengthens our long-range growthprofile," Martin P. Rosendale, Chief Executive Officer of Cytomedix, said in apress release. "In combination, we now touch the three pillars of regenerativemedicine with autologous stem cells, platelet-derived signal molecules andplasma scaffolds. We view the acquisition of Aldagen as an opportunistictransaction at an attractive valuation that will allow us to build and expandour new product development efforts with Aldagen's technology, intellectualproperty, people and clinical expertise. In terms of maximizing opportunity forour shareholders while managing and mitigating risk, we feel this transactionis very advantageous."
Per the terms of the transaction, Cytomedix issued prefferedshares valued at $16 million, with additional consideration to be paid incommon stock if several clinical milestones are achieved. In addition, certainAldagen investors purchased $5 million of Cytomedix common stock in a privateplacement.
At the closing, 135,398 newly designated Cytomedix Series Epreferred shares were issued to Aldagen shareholders. Pro forma for theconversion of these shares to common stock, Aldagen shareholders will ownapproximately 17.3 percent of Cytomedix's common outstanding shares after theconversion and/or redemption of all existing Cytomedix preferred shares. In addition,the transaction also includes contingent milestone payments totaling up to20,309,723 shares, which will be issued to Aldagen shareholders if certainclinical milestones are achieved in association with Aldagen's ongoing Phase IItrial in post-acute ischemic stroke. Eighty percent of the contingentconsideration will be issued only if a favorable clinical efficacy signal isachieved in the trial.
"We are delighted to join forces with Cytomedix as thisalignment unites commercial products with a growing revenue stream with a deeppipeline of clinical opportunities," Richard Kent, M.D., Chairman of the Boardof Aldagen, said in a press release. "We believe these autologous technologiesare complementary and hold potential to produce more therapeutics than eitherone could on its own. The commitment of additional capital into Cytomedix bycertain Aldagen investors underscores our confidence in the very promisingpotential for the combination of these regenerative technologies to change howwe treat a variety of large disease areas with continued unmet medical need."
As an additional criterion of the transaction, as ofclosing, three Aldagen board members have joined Cytomedix's board ofdirectors, which has been expanded to nine seats. The new Cytomedix boardmembers include Kent; Lyle Hohnke, Ph.D., Aldagen's former Chief ExecutiveOfficer; and Joseph Del Guercio, Managing Director of CNF Investments and acurrent Board Observer for Aldagen. In accordance with the new additions, CraigMendelsohn stepped down from Cytomedix's board of directors. Additionally,Edward L. Field, Aldagen's Chief Operating Officer, has been appointed as ChiefOperating Officer of Cytomedix.
Aldagen is now a wholly owned Cytomedix subsidiary, and willretain its manufacturing and product development facilities based in Durham,N.C.
SOURCE: Cytomedix, Inc. press release