Regenerative Medicine Deal Review: December

Author: Mark Curtis, 01/13/14

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Welcome to your Regenerative Medicine Deal Review for the month of December. Toronto-based Stem Cell Therapeutics successfully executed on a financing of $33 million, while Pluristem announces it is moving forward on a licensing agreement with Korea-based CHA. Cellular Dynamics International is back in the news this month with another collaboration, this time to develop induced pluripotent stem (iPS) cell-derived hepatocytes with The Hamner Institute for Health Sciences. Read on to find out more.

Licensing

Back in June of this year, Pluristem (PSTI) announced an exclusive out-licensing deal and strategic partnership with Korea-based CHA Bio&Diostech (CHA) for use of the company’s PLX-PAD cells (placenta-derived) in two subsets of Peripheral Artery Disease. This month Pluristem announces the company is moving forward with the agreements, making a mutual investment of $10.4 million alongside CHA to close off the deal. Pluristem will issue CHA 2,500,000 shares in return for ~1,000,000 shares of CHA. The deal valued Pluristem’s shares at a 26% premium to its market close of $4.16/share on December 16th.

Partnering

Wisconsin-based Cellular Dynamics International (CDI) announced a deal with The Hamner Institutes for Health Sciences to develop predictive in vitro screening assays for chemical, environmental, and pharmaceutical toxicology assessments utilizing CDI’s iPS cell-derived iCell® Hepatocytes.

The current standards in pharmaceutical hepatotoxicology assessments are immortalized liver cell lines (manipulated to survive in the petri dish indefinitely) or primary human liver cell lines. While providing a consistent source of hepatocytes, immortalized cell lines fall short in terms of ‘predictiveness’ because they do not have the hallmark functional properties of hepatocytes in vitro. Primary human liver cell lines have improved function, but can only be maintained in vitro for a short time posing a barrier to investigating longer-term effects of drug hepatotoxicity. They are also difficult to source and do not often provide reproducible results due to variability between primary samples.

The iPS cell approach CDI has taken improves upon the available standards in a number of areas, including function (predictiveness), availability and consistency. iCell® Hepatocytes are derived from iPS cells in vitro utilizing a proprietary differentiation protocol. A trend in this area of research is the development of 3-dimensional multicellular aggregates, also known as ‘organoids’, which more accurately reflect the complexity of the liver for the purposes of hepatotoxicity testing.

Financing

Toronto-based Stem Cell Therapeutics (SSS), an oncology company with a drug development program directed to cancer stem cells, successfully closed a private placement raising gross proceeds of $33 million. The proceeds of the financing will be used for IND-enabling studies, manufacturing and phase 1 studies to progress the company’s CD47 program. CD47 is a protein that binds the SIRP-alpha surface receptor. Scientists believe the CD47-SIRP-alpha pathway is leveraged by cancer cells, including cancer stem cells, to prevent their destruction by macrophages. As a result, the pathway is currently of considerable interest to Big Pharma. Toronto-based Bloom Burton & Co. was lead agent for the deal, while a number of healthcare-focused institutional investors participated, including Ridgeback Capital, Merlin Nexus, Sabby Capital, venBio, Opaleye, HSMR Advisors, and Special Situations Fund.

2013 was an exciting year for the biotech market. We saw some 40 biotech IPOs that collectively raised more than $3 billion, a huge improvement over 2012 (11 biotech IPOs) and the anemic 2008 – 2011 stretch. A few biotech IPOs of note this year include bluebird bio (BLUE), Stemline (STML) and James Thomson’s CDI. The companies raised $116 million, $38 million, and $43 million respectively, and are up 23%, 96% and 42% from their IPO prices respectively. Not a bad year by any measure for these newly formed public regenerative medicine companies. Stemline is the second cancer stem cell-focused company to have undergone an IPO, after Verastem’s (VSTM) IPO in January 2012 that raised gross proceeds of $55 million.

I’ll be watching closely to see what 2014 brings. I invite you to read my monthly summaries of “Regenerative Medicine Deal Review,” as well as “Update from the Clinic“ and look forward to your comments.

 

 

 

 

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Mark Curtis

Mark Curtis

Mark is a Business Development Analyst at the Centre for Commercialization of Regenerative Medicine (CCRM), where he collaborates with the team to help evaluate the commercial potential of regenerative medicine and cell therapy technologies. He began his career at Princess Margaret Hospital studying cellular reprogramming of human skin cells. Following this project, he left the laboratory and took on a role with Bloom Burton & Co., a healthcare-focused investment dealer. While there he supported the advisory team in carrying out scientific diligence on early-stage biotechnology companies. Prior to joining CCRM he was a consultant to Stem Cell Therapeutics, a Toronto-based biotechnology company focused on developing therapeutics targeting cancer stem cells. Mark received a Master’s degree from the University of New South Wales in Sydney, where he studied the directed differentiation of embryonic stem cells, and a Bachelor’s degree in Biology, from Queen’s University. Follow Mark on Twitter @markallencurtis
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