NeoStem to buy Californian peer

|By:, SA News Editor

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. The deal value was originally incorrectly reported as $6.66M based on a Friday close of $1.25 per share.