Seeking Alpha

NeoStem to buy Californian peer

  • NeoStem (NBS) has agreed to acquire start-up California Stem Cell, which has developed Melapuldencel-T, an immune based-therapy designed to eliminate tumor cells that can cause disease recurrence.
  • NeoStem will pay 5.33M shares - worth $34.1M based on the firm's closing price of $6.40 on Friday - as well as up to $90M in milestone and royalty payments in cash or shares. NeoStem is currently trading up 9.4% at $7 per share in premarket action.
  • With Melapuldencel-T already achieving "compelling trial results for the treatment of metastatic melanoma," NeoStem intends to initiate a Phase III trial of the treatment. The drug has already received Special Protocol Assessment (SPA) from the FDA, as well as Fast Track designation for metastatic melanoma and Orphan Drug status.
  • NeoStem shares have been halted and are due to restart trading at 7:30 ET. (PR)
This was corrected on 04/14/2014 at 08:49 AM.
Comments (3)
  • dblack0022
    , contributor
    Comments (11) | Send Message
     
    We need a catalyst!
    14 Apr, 08:57 AM Reply Like
  • bigkid53
    , contributor
    Comments (55) | Send Message
     
    Not the news anyone expected. Question is why did this company go with NBS for less than $50M instead of big pharma partner or buy out. This would be petty cash to one of them. Maybe deal could not be done as quick with big company. Hopefully, it is because CSC has seen info, which indicates that the value of their shares will increase markedly as NBS goes up bigtime. We can only hope.
    14 Apr, 09:14 AM Reply Like
  • synergistic_serendipity
    , contributor
    Comments (13) | Send Message
     
    Great question on why CSC went with NBS vs Big Pharma. Answer may lie in fact that stem cell based therapies are still fundamentally developmental. PCT provides internal leverage to development. The move tells me that NBS believes in the technology and are moving towards leveraging their internal cGMP capabilities with expanding their own pipeline. Certainly a potential greater return on their not insignificant investment vs. job-shopping others' product lines. Lots more thinking to do here.

     

    Hopefully this won't be a distraction to their already substantial pipeline development efforts. Long term bullish move with short term dilutive impacts.
    14 Apr, 01:01 PM Reply Like
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