NeoStem (AMEX:NBS) reported on Monday that it has closed its previously announced acquisition of Amorcyte, a development stage cell therapy company focused on cardiovascular disease treatments.
Shareholders from both companies approved the deal last Friday.
Under the terms of the deal, NeoStem issued 5.8 million shares as base stock consideration, and will issue up to 4.1 million common shares if certain milestones are met.
NeoStem also issued warrants to buy 1.88 million shares of common stock, exercisable over a seven year period for $1.466 per share.
In addition, after the successful commercialization of Amorcyte's lead product candidate AMR-001, NeoStem said it will pay earn out payments on sales.
AMR-001 is an autologous cell therapy designed to prevent heart tissue damage and further major adverse cardiac events following a heart attack. The treament consists of a patient's own bone marrow cells, which are processed to create pharmaceutical-grade cells that are then re-injected through coronary arteries into damaged areas of the heart, 6 to 11 days after a patient experiences 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.
In a statement, NeoStem’s chief executive, Robin Smith, said: "The closing of our acquisition of Amorcyte represents a leap forward for NeoStem into clinical development and the furtherance of our mission to develop a product portfolio of cell therapy products that leverage the body's natural abilities to heal and fight disease. We believe that AMR-001 bridges the gap between cell therapy's roots in bone marrow transplantation and cell therapies of the future."
About 800,000 people in the U.S. suffer acute myocardial infarctions 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.
NeoStem, which closed a financing raising $16.5 million in gross proceeds on July 22, intends to initiate, no later than the first quarter of 2012, a phase 2 clinical trial for AMR-001. A phase 1 study of the AMR-001 therapy found it improved the delivery of arterial blood around the body, and 'rescued' heart cells from hibernation and death.
The phase 2 trial will explore the potential of AMR-001 to preserve heart muscle functions as well as reduce the incidence and severity of major cardiac events.
NeoStem’s chief medical officer, Andrew Pecora, added: "We are very much encouraged by Phase 1 trial results and look forward to moving AMR-001 forward toward commercialization through NeoStem."