Tweet

 

Cytomedix (OTC BB:CMXI) has acquired stem cell therapeutics firm company Aldagen in a $16M stock deal that broadens the firm’s regenerative therapies pipeline.

Under the terms of the agreement, CMXI.OB issued Aldagen shareholders preferred shares valued at $16M, giving Aldagen an approximately 17.3% stake in CMXI. As part of the transaction, some Aldagen investors purchased $5M of CMXI common stock in a private placement.

• With the closing of the deal, Aldagen becomes a subsidiary of Cytomedix and will continue to operate from its Durham, North Carolina location;
• Aldagen stands to gain additional CMXI shares; up to 20.3M based on milestones tied to the firm’s P2 ischemic stroke clinical trial. Under the terms of the deal, 80% of those milestones are tied to success in that trial and contingent consideration issuable only upon a favorable clinical efficacy signal in the P2 trial;
• At the closing, CMXI.OB  issued 135,398 newly designated Cytomedix Series E preferred shares to Aldagen shareholders. Pro forma for the conversion of these shares to common stock, as set forth in the designations documents for the Series E preferred stock, Aldagen shareholders will own approximately 17.3% of CMXI’s common shares outstanding after the concurrent conversion and/or redemption of all existing Cytomedix preferred shares;
• The costs of the clinical trial will be funded, in part, by the $5M investment made by Aldagen shareholders, $3M in proceeds from completed or committed warrant exercises by existing CMXI shareholders, as well as a portion of CMXI’ cash on hand. All upfront and contingent consideration shares are subject to lockup restrictions ranging from 6 to 18 months;
• Aldagen COO Edward Field has been appointed COO of CMXI. 3 Aldagen board members now join CMXI’s board of directors, which has been expanded to 9 seats.

Aldagen’s proprietary ALDH bright cell technology is being used to develop regenerative cell therapies for cardiovascular conditions. Last June, Aldagen enrolled its 1st patient in a P2 clinical trial studying candidate ALD-401 (ALDH bright cell (“ALDHbr”) technology) as a treatment for ischemic stroke.

The Bottom Line: This strategic acquisition of Aldagen provides CMXI with a novel, patent-protected cell selection technology that fits well with existing commercial products and strengthens long-range growth profile. The combination now has autologous stem cells, platelet-derived signal molecules and plasma scaffolds platforms. Maryland-based CMXI develops biologically active regenerative therapies for wound care, inflammation and blood vessel development. Aldagen, a venture backed company  had raised more than $60M from investors including the Aurora Funds, Intersouth Partners, Harbert Venture Partners, CNF Investments and Tullis-Dickerson. Aldagen had taken steps toward an initial public stock offering but last year withdrew those plans citing market conditions.

• CMXI.OB is trading down $0.10 <-7.14%> to $1.30 in opening trading, its 52 week range has been $0.28 to $1.41 with a $69.19M market cap