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Another brick in the wall
NEW YORK—After gaining approval from shareholders of both companies, NeoStem in October closed on its acquisition of Amorcyte, a development-stage cell therapy company focusing on cardiovascular disease treatments.
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. NeoStem also announced it will pay certain earn-out payments on sales.
Based in Allendale, N.J., Amorcyte is a virtual company that had been spun out of Progenitor Cell Therapy, which NeoStem acquired in January.
The acquisition of both companies positions NeoStem to achieve its mission of capturing the paradigm shift to cell therapy.
Paul Schmitt, managing director of Novitas Capital, the largest investor in Amorcyte, says that after a successful Phase I clinical study of Amorcyte's lead product candidate, AMR-001, the timing was right for a merger.
"We were introduced to NeoStem, and everything fell into place from there," he says.
AMR-001 is an autologous, bone marrow-derived, pharmaceutical-grade, cell-based product that uses a cell population enriched for CD34+CXCR4+ cells. Studies have shown that these cells act as a natural repair mechanism, releasing from bone marrow and traveling to the damaged region of the heart following an acute myocardial infarction (AMI).
Of the approximately 800,000 Americans who suffer an AMI each year, approximately 20 percent, or 160,000 patients, remain at risk for progressive deterioration in heart muscle function—and as a consequence, increased risk for future major adverse cardiac events. AMR-001 targets treatment of this unmet medical need.
According to Dr. Robin L. Smith, chairman and CEO of NeoStem, the closing of the company's 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 represents a potential breakthrough therapy for a large unmet medical need," Smith says. "We see tremendous pharmacoeconomic benefit in this therapy, which we believe could change both the clinical adverse events associated with serious heart attacks and improve a patient's quality of life, all with one therapeutic intervention."
Since Amorcyte outsourced all of its work, Schmitt says it makes sense to have Dr. Andrew L. Pecora, chief medical officer of NeoStem and chief scientific officer of Amorcyte, on hand to oversee further development of AMR- 001.
Pecora says treatment with AMR-001 involves infusion of an active population of these cells directly into a patient's heart via an intra-coronary catheter six to 11 days after an AMI (i.e., after the "hot," or inflammatory, phase) and as such, complements the body's natural rescue mechanism for those cells that face hypoxic stress as a result of an increased workload.
Pecora says the team is encouraged by the Phase I trial results and looks forward to moving AMR-001 forward toward commercialization through NeoStem.
"Through NeoStem's preclinical very small embryonic-like stem cell (VSEL) platform, the Phase I-ready autoimmune disease product candidates of its Athelos subsidiary and now through AMR-001, NeoStem seeks to fulfill the promise that an individual's own cells hold the potential to both heal and transform the way medicine is delivered," he says.
Pecora says there are data from several published clinical trials, including NeoStem's, demonstrating the potential effectiveness of a cell-based therapy for preserving cardiac function and preventing the adverse clinical events that usually follow a large myocardial infarction.
"Our clinical trial of AMR-001 yielded significant results, forming the basis for the Phase II trial," he says.
NeoStem plans to commence a Phase II clinical study on AMR-001 for the treatment of AMI by the first quarter of 2012.