Welcome to your RM deal review for the month of April. There were two notable acquisitions this past month. NeoStem entered into an agreement to acquire California Stem Cell, while Aastrom acquired Sanofi’s regenerative medicine business. Read on to find out more.
New York-based NeoStem (NBS) entered into a definitive agreement to purchase California Stem Cell (CSC), a company specializing in the scalable development of human stem cell products. The deal will give NeoStem access to Melapuldencel-T, a cell-based autologous immunotherapy in late-stage development for metastatic melanoma that has been granted an Orphan Drug and Fast Track designation from the Food and Drug Administration (FDA). NeoStem will conduct a Phase 3 study later this year under a Special Protocol Assessment (trial design and endpoints of an uncompleted trial are deemed acceptable for approval by the FDA).
The therapy utilizes the patient’s own irradiated melanoma cells mixed with his or her own dendritic cells (cells that present proteins or antigens to the immune system) and granulocyte macrophage colony-stimulating factor, a protein that stimulates the growth of white blood cells. In Phase 2 studies investigating the therapy in patients with advanced melanoma, overall survival in patients was boosted from 31% to 72%.
The deal, which recently closed, will see 5.3 million shares of NeoStem issued in exchange for all outstanding shares of CSC. Shareholders of CSC will be eligible for up to $90 million in milestone payments. Melapuldencel-T will become NeoStem’s most advanced product candidate and the foundation of the company’s targeted immunotherapy program.
Also on the acquisition front, Aastrom Biosciences (ASTM) entered into a definitive agreement to purchase Sanofi’s regenerative medicine and cell therapy business for $6.5 million; $4 million of which will be paid in cash on closing. As a result of the deal, Aastrom will acquire two global production and manufacturing centres in Europe for three different marketed autologous cell therapies: Carticel®, a product composed of autologous cartilage cells for cartilage implant; Epicel®, a product for full-thickness (third degree) burns composed of epidermal autografts; and finally, MACI® (matrix-induced autologous chondrocyte implant), another product for cartilage defects. The three cell therapy products generated US$44 million in revenue in 2013, and should provide cash flow to help support Aastrom’s ongoing development pipeline.
NeoStem’s acquisition of Melapuldencel-T is a strong move to become a player in the cancer immunotherapy space, although, the company will be up against a good deal of competition. According to data provided by the Alliance for Regenerative Medicine, cell-based immunotherapies make up 75 of the total 326 ongoing industry-sponsored cell therapy trials today (23%). The Phase 3 study of Melapuldencel-T this year will be one of about a dozen late-stage trials of cell-based immunotherapies in the clinic around the globe. Some approvals could soon be on the horizon.