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NeoStem to acquire Amorcyte and phase 2 cardiovascular therapy candidate

NeoStem (AMEX:NBS) announced Thursday it plans to acquire Amorcyte, a development stage cell therapy company focused on cardiovascular disease, whose lead product is AMR-001, currently about to start a phase two study for the treatment of acute myocardial infarction (AMI).

The acquisition will see NeoStem issue over 6.8 million shares of its stock, as well as warrants to purchase more than 1.88 million NeoStem shares. An additional 4.1 million shares will be vested upon the achievement of certain AMR-001 milestones, the company said.

"We are excited about the Phase 1 trial results and look forward to moving Amorcyte's lead product, AMR-001, forward and toward commercialization through NeoStem," said Amorcyte CSO, Dr. Andrew Pecora.

Amorcyte's shareholders that own more than 50% of the company's stock have already agreed to vote in favour of the merger, which is subject to various terms and conditions.

About 800,000 people in the U.S. suffer an AMI each year, and 20% of them remain at risk to experience progressive deterioration in heart muscle function and thereby an increase in major adverse cardiac events (OTCQX:MACE), like heart attacks.

A phase one study of the AMR-001 therapy found that it improved perfusion, or the delivery of arterial blood around the body, and 'rescued' heart cells from hibernation and death.

The second phase of the clinical trial, which is expected to begin no later than the first quarter of 2012, will apply the therapeutic dose discovered in phase one and apply it to explore the potential of AMR-001 to preserve heart muscle functions and reduce the incidence and severity of major cardiac events.

"We are excited to have reached this agreement with Amorcyte and to be in position to acquire this asset which is on the verge of commencing Phase II trials," said NeoStem CEO, Dr. Robin L. Smith.

"We anticipate a seamless integration with our operations as PCT, our wholly-owned subsidiary, manufactured the cells for the AMR-001 Phase I clinical trial and has already been selected to manufacture AMR-001 for the Phase II trial."

NeoStem acquired Progentior Cell Therapy (PCT) in January, building on the company's shift from a stem cell storage company into one focused on cell therapy.

AMR-001 is derived from bone marrow and uses CD34+CXCR4+ cells to act as a natural repair mechanism. The therapy works by infusing these cells into a patient's heart six to eleven days after an AMI to compliment the patient's natural rescue cells.

Because it 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.