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NeoStem Announces Definitive Agreement To Acquire California Stem Cell, Inc.

Stock quotes in this article: NBS

NEW YORK, April 14, 2014 (GLOBE NEWSWIRE) -- NeoStem, Inc. (Nasdaq:NBS) ("NeoStem" or the "Company"), a leader in the emerging cellular therapy industry, announced today that it has entered into a definitive agreement to acquire California Stem Cell, Inc. ("CSC"), an Irvine, California based stem cell biotechnology company. As a result of this acquisition, NeoStem plans to initiate a pivotal Phase 3 trial of Melapuldencel-T, an autologous melanoma initiating (stem) cell immune based therapy intended to eliminate the tumor cells capable of causing disease recurrence.

Since its founding in 2005, CSC has developed proprietary methods for the scalable production of high-purity human stem cells and their derivatives. CSC has been focused on the application of these cells in developing life changing therapies, including Melapuldencel–T, which has been the subject of compelling trial results for the treatment of metastatic melanoma. As a result, Melapuldencel-T has been approved to enter a Phase 3 clinical trial with Special Protocol Assessment (SPA) and received Fast Track designation for metastatic melanoma, as well as Orphan Drug designation.

In a Phase 2 randomized clinical trial of Melapuldencel-T (an irradiated autologous in vitro proliferating melanoma cell line loaded onto an autologous dendritic cell combined with granulocyte macrophage colony-stimulating factor {GM-CSF}), patients showed a significant improvement in two year overall survival from 31% in controls to 72% in treated patients (p=0.007) with advanced melanoma (recurrent Stage III and Stage IV). The toxicity profile was favorable with no grade IV and only one grade III (allergic reaction) event in the study. 1

"NeoStem has been built upon a series of strategic acquisitions that created an infrastructure with strong development, regulatory and manufacturing expertise in cell therapy. By adding a late stage technology, such as Melapuldencel-T, we enhance our ability to add value for our shareholders," said Dr. Robin Smith, Chairman and CEO of NeoStem. "We continue to lead the industry in the development of novel proprietary cellular therapies, and adding CSC's advanced immunotherapy technologies to our existing development pipeline and cGMP compliant cell therapy manufacturing facilities (PCT) brings us closer to our goal of delivering transformative cell based therapies to the market to help patients suffering from life-threatening medical conditions."

  • The definitive merger agreement provides for the issuance of an aggregate of up to approximately 5.33 million shares of NeoStem common stock, restricted and subject to a holding period, in exchange for all of the CSC outstanding stock and options. CSC shareholders will be eligible for additional milestone and royalty payments of up to $90 million, which may be payable in cash or shares of NeoStem common stock at NeoStem's discretion. The shares of NeoStem's common stock to be issued to equity holders of CSC will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements;
  • The requisite number of CSC stockholders have consented to the adoption of the merger;
  • The merger is expected to close in May 2014 and is subject to customary closing conditions;
  • The acquisition of CSC expands NeoStem's development pipeline of cell therapy products to include therapies for cancer. Melapuldencel-T, which targets cancer initiating cells for melanoma, will become NeoStem's most advanced product candidate;
  • In 2014, NeoStem plans to initiate a Phase 3 study for Melapuldencel-T with a primary endpoint of overall survival;
  • This platform technology could be expanded into other indications, such as hepatocellular carcinoma and other immune responsive tumor types;
  • The CSC acquisition provides other technologies that NeoStem will continue to evaluate for partnership and licensing opportunities.

Dr. Hans Keirstead, current CEO of CSC stated, "This transaction represents a major developmental step for our technology and tremendous hope for patients. We believe NeoStem's and PCT's deep expertise in scaled manufacturing, regulatory, and clinical development will advance our programs significantly."

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