Basking Ridge-based Caladrius Biosciences, Inc., a cell therapy company with a select therapeutic development pipeline focused on immune modulation, announces that the company has signed a definitive agreement in which its remaining 80.1 percent ownership interest in its PCT, LLC subsidiary will be purchased by Hitachi Chemical Co. America, Ltd. for $75 million in cash; and in addition there is the potential for Caladrius to receive an additional cash payment of $5 million if PCT achieves a certain revenue-based milestone. PCT is an industry-leading cell therapy development and manufacturing services provider and is currently 19.9 percent owned by Hitachi Chemical. This transaction will redefine Caladrius as a cell therapeutics-only development company with multiple proprietary technology platforms and significant capital resources to fund future programs.
A $5 million payment from Hitachi Chemical to Caladrius was triggered upon signing the agreement and $70 million is due upon closing the transaction, $5 million of which will be placed into escrow to cover indemnification claims of Hitachi Chemical, if any. The closing is expected to occur in May 2017 subject to approval by Caladrius’ shareholders and customary closing conditions.
In addition, the agreement provides for Hitachi Chemical/PCT to continue to provide development and manufacturing services to Caladrius in connection with Caladrius’s T regulatory cell program, for a period of seven years after closing.
Caladrius intends to use the proceeds from this transaction for working capital including, among other things, to complete its currently enrolling Phase 2 trial (the Sanford Project: T-Rex Study) for its lead product candidate, CLBS03 for the treatment of recent-onset type 1 diabetes, to judiciously and opportunistically identify clinical development pipeline candidates and to fully eliminate the Company’s remaining $5.5 million of outstanding debt.
“Hitachi Chemical’s purchase of our remaining interest in PCT unlocks the value of this asset for our Company both by transforming Caladrius into a well-capitalized pure play therapeutics development company and by eliminating our need to contribute the tens of millions of dollars of future capital investment in PCT needed for it to fully realize its cell therapy commercial manufacturing growth goals,” said David J. Mazzo, PhD, Chief Executive Officer of Caladrius. “The transaction provides considerable non-dilutive capital to fund the execution of our ongoing Phase 2 trial while also allowing us to exploit compelling therapeutic prospects.”
“Hitachi Chemical intends to deploy the capital and engineering expertise needed to leverage PCT’s own engineering and cell therapy development and manufacturing expertise, thereby accelerating the creation of a global commercial manufacturing enterprise,” said Robert A. Preti, PhD, President of PCT. “All of our clients and especially Caladrius, with which PCT will maintain a strong client relationship, stand to benefit from PCT’s integration into Hitachi’s global footprint and the resulting access to advanced engineering solutions for process optimization and automation for the cell therapy industry.”
The Caladrius Board of Directors voted to approve the Agreement. Caladrius has received legal representation regarding this transaction from Paul Hastings LLP and financial advice and a written fairness opinion from MTS Health Partners, L.P.Related Articles: