NeoStem closes $6.8 mln public offering
The company issued 15.0 million units, plus an additional 2.0 million units under the exercise of the over-allotment option, for a total of 17.0 million units priced at 40 cents each.
Each unit consists of one share of common stock and a warrant to purchase one share at a price of 51 cents.
"NeoStem's management remains focused on our key objectives of expanding our stem cell therapeutic contract manufacturing business, enrolling the PreSERVE AMR-001 Phase 2 clinical trial for preserving heart function after a heart attack and monetizing our China pharmaceutical subsidiary through divestiture," said chairman and CEO Dr. Robin Smith.
Gross proceeds were $6.8 million, prior to deducting underwriting discounts and commissions and offering expenses, the company said.
The new funds will be used for working capital purposes, including research and development of cell therapeutic product candidates, expansion of business units, strategic transactions and other general corporate purposes.
NeoStem has continued to devote its resources to its cell therapy business, including manufacturing, therapeutic development, and related activities. Its revenues are derived from a combination of areas, including the contract manufacturing services performed by the Progenitor Cell Therapy, whose manufacturing base is one of the few accredited facilities available for contracting in the cell therapy industry.
For 2011, the company reported revenues of $73.7 million, compared to $69.8 million in 2010.
The company is focused on accelerating the development of proprietary cellular therapies and becoming a single source for collection, storage, manufacturing, therapeutic development and transportation of cells for cell-based medicine and regenerative science globally.
In mid-October last year, the company completed the acquisition of Amorcyte, taking ownership of a strong patent portfolio covering the use of stem cells for cardiac disease treatment.
Amorcyte's main product candidate, AMR-001, is currently in phase two studies. The product is an autologous cell therapy designed to prevent heart tissue damage and further major adverse cardiac events following a heart attack.
Because the treatment is autologous, meaning cells are taken from the same individual that they're transplanted into, it has no risk of rejection and can provide support for an extended period of time.
The phase two study, for which enrollment began in January, is a randomized, double-blind, placebo-controlled clinical trial to evaluate the safety and efficacy of AMR-001. The trial, which will include 160 subjects aged 18 and older, will be supported by Progenitor Cell Therapy.
Aside from its operations in the US, NeoStem has a network of adult stem cell therapeutic providers in China as well as a 51 percent ownership interest in a Chinese generic pharmaceutical manufacturing company, Suzhou Erye Pharmaceutical Co.
The company said, however, that since opportunities in the cell therapy space are growing, it sees this as an opportunistic time to sell its 51 percent stake in Suzhou, and to bolster its cell therapy business.