BCLI.OB announced that it has entered into agreements with 3 investors with each investing $500 K for a total of investment of $1.5 M with issuance to each of 3 investors, 2 M shares of stock based on the 30 day average share price as of 2/11/10 of $0.25 per share and 1 M warrants with an exercise price of $0.50 per share for a total issuance of 6 M shares and 3 M warrants. These investments provide BCLI.OB with the necessary funds to conduct its upcoming Phase I/II ALS clinical trial with a collaborative agreement with Hadassah Medical Center to conduct its ALS clinical trials at the Hadassah Ein Kerem Hospital, Israel.
Reiterating from our 2/10/10 blog, BLCI.OB’s might be able to demonstrate creation of neurotrophic-factor secreting cells (glial cells) from in-vitro differentiated bone marrow cells that produce neurotrophic factors (NTF) including GDNF, BDNF, NGF and IGF-1.
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The turmoil in the last 2-3 weeks markets makes it hard sometimes to focus GERN’s short-term share price appreciation. An expanding indication for GRNOPC1 is good news as the FDA placed a clinical hold on the early-stage trial of this compound. The outstanding warrant exchange accounting for approximately 3/4 of all warrants strengthened the balance sheet with GERN selling additional shares of common to investors at a premium for gross proceeds of $10 M, generating a 2.7 M shares lock-up provision with the new block of shares being purchased and issuance of a call option to the investors to purchase an additional $5 M of common stock. Adding to the these events, the GRN163L compound is being tested on human cells and on rodents showing very striking results; attacking not only the bulk of the tumor cells, but also the rare cancer stem cells that are believed to be responsible for most of a cancer’s growth.
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The public offering/ financing further strengthened its’ balance sheet and to complete ongoing Phase II clinical trials:
- Receiving approximately $12.4 M from the sale of units including the over-allotment,
- The 52,077,100 units consisted of 52,077,100 shares of common stock, Class A Warrants to purchase an aggregate of 39,057,825 shares of common stock and Class B Warrants to purchase an aggregate of 26,038,550 shares of common stock,
- Each Class A Warrant entitles the holder to acquire 1 share of common stock upon payment of $0.3718 per share, exercisable for a 5 year period commencing on a date 6 months after the closing date and each whole Class B Warrant entitles the holder to acquire 1 share of common stock upon payment of $0.26 per share, exercisable for a 6 month period,
- The public offering format was better then a PIPE or an RDO as retail investors could participate,
- The stock tumbled to $0.23 after ASTM priced the offering at $0.26 a share,
- The GOOD news … the “pre-baked” offering was over-subscribed … as a few investors could not get in,
- The offering was done at $0.26 while the stock was trading lower, now at $0.236, up $0.007 and continuing to … edge-up,
- Investors (and ME) should have realized something was in the air when ASTM amended (12/09) its Restated Articles of Incorporation that increased the authorized shares of common stock from 250 M to 500 M,
- The fully diluted value is heavy with approximately 230 M (+) of outstanding shares plus warrants plus the incentive options,
- But, the reverse is … still … DUE … to eliminate by 3/31/10 the NASDAQ listing issue,
- So, the question is creating a share price balancing act of appreciation to the future,
- News is the … only factor as interim clinical data from its cardiac and limb ischemia trials are due,
- The pure risk benefit … made sense … unfortunately price depreciation was inevitable … as in biotech, dilution is a constant,
- The REAL choice was the value of money, now or later,
- However, the proxy vote for the reverse split defined a range of 5 to 8 for 1,
- We can all multiply the current price against/with the current price but no one wants a post-reverse sell-off,
- Responding to our 1/15/10 post: the new CEO, Tim Mayleben deserves credit for a big and bold move … with this market slipping as it has: he raised $$, added a few institutions/hedge funds but, the piper (reverse) still has to be paid,
- Ranked a … BUY … as still below the offering pricing and news is due.
There are 337 (276 public and 61 private) lifescience companies presenting starting Monday, 1/11 and running through Thursday, 1/14. Link: JPMHealthcareConference-Agenda1.7
Public company presentations are usually web-cast enabling non-participants to view presentations with breakout sessions immediately following their presentations. These web-casts will be available for 3 months after the conference: https://events.jpmorgan.com/ ; so click on the web-cast link (no need for a user name and password but will be prompted an email address). As related to current economic times, registration of attendees was limited by JP Morgan to a total of about 3,500 versus 6,000 in the past years.
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Advanced Cell Technology (ACTC.OB or ACT) filed an Investigational New Drug (IND) application on 11/18/09 to conduct a PI/II trial using hESCs to treat a genetic eye disease.
- The “proposed” trial aims to treat patients with Stargardt’s Macular Dystrophy (SMD); a genetic eye disease for which there is currently – NO – treatment and one of the most common causes of “juvenile” blindness,
- The disease results in the degeneration of the retinal pigment epithelium (RPE) cells that support the photoreceptors needed for vision — which in turn causes the degeneration of the photoreceptors and leads to vision impairment.
Bottom Line: Referencing our post on 10/27/09; ACTC.OB “proposes” to transplant hESCs that have been “differentiated” into retinal pigment epithelial cells into SMD patients in hopes of improving visual acuity. Previous work at ACT has shown dramatic improvement in the visual performance of animal models that received implants of these differentiated RPE cells according. Furthermore, they had found no adverse effects (such as teratomas) in hundreds of treated animals and the cells are “almost 100% RPE”, meaning there are virtually no undifferentiated cells that “could” potentially behave “differently” after implantation.
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Aastrom (NASDAQ: ASTM) is focused on the treatment of cardiac and vascular diseases, such as dilated cardiomyopathy (DCM) and critical limb ischemia (CLI). Aastrom is developing Cardiac Repair Cells (CRCs), based on TRC technology, and with the goal of repairing and regenerating damaged heart tissue in patients with dilated cardiomyopathy (DCM) and Vascular Repair Cells (VRCs) with the goal of repairing and regenerating the ischemic tissues of these patients by improving the blood flow in the affected areas. It’s proprietary Tissue Repair Cell (TRC) technology expands the numbers of stem and early progenitor cells from a small amount of bone marrow collected from the patient.
Market Opportunity: Many of the 5.5 M people in the U.S. suffering from severe heart failure have DCM, a condition where expansion of the patient’s heart reduces pump function, making it impossible to maintain normal blood circulation. Patients with DCM typically have symptoms of congestive heart failure, including severe limitations in physical activity and shortness of breath.
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Stem cell technologies are anticipated to provide the stimulus for cellular repair or regeneration. This can be achieved in different ways: by administering stem cells, or specific cells that are derived from stem cells in the laboratory or by administering drugs that coax stem cells that are already present in tissues to more efficiently repair the involved tissue.
George W. Bush was the first president to allow federal money to be used to fund embryonic stem cell research; but, limited it to about 60 existing stem cell lines created from embryos already frozen in fertility clinics. According to the National Institutes of Health (NIH), out of 88 lines 21 were actually available to researchers.
The stem cell research industry is being given a lift by “evolving” the restrictions of government funding. The Obama administration drafted (3/09) guidelines for federal funding of human embryonic stem cell research. The plan lifts some but not all federal financing restrictions. The executive order ended an 8½ year ban on federal funding for embryonic stem cell research paving the way for a significant amount of federal funds to flow to science. The administration “asked” the NIH to draft guidelines that would address both scientific and ethical concerns to allow research with federal financing only on stem cells derived from surplus embryos at fertility clinics. The money would still be prohibited for stem cell lines created solely for research purposes and for embryos created through a technique known as therapeutic cloning.
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Referencing our multiple financing structure posts re PIPEs and RDOs; a new survey identifies key drivers of private investment in public equities in “next” 12-18 months. The survey conducted in Q3/09, canvassed the opinions of experienced PIPE investors, private equity practitioners, venture capital investors, hedge fund managers and mutual fund investors. (Source: mergermarket in conjunction with Kramer Levin Naftalis & Frankel LLP and Rodman & Renshaw LLC)
- 49% – of respondents “expect” to see an increase in their firm’s PIPE investment activity over the next 12 to 18 months,
- 43% – “expect” their firm’s activity to remain at its current level,
- 82% – of respondents “expect” to see an increase in the volume of registered direct offerings (RDOs) due to their uniquely appealing features for issuers,
- 82% - of respondents “expect” the lower mid-market range to offer the highest volume of PIPE opportunities,
- 54% – of respondents “expect” to see the greatest demand for PIPEs in the Healthcare, Biotechnology and Life Sciences industry.
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Referencing our previous post, “The Need to Continue Funding for Cancer Compounds” about cancer drugs in development … President Barack Obama recently announced a plan to spend $5 B on medical and scientific research, medical supplies and upgrading laboratory capacity.
The funds, to come from the $787 B economic stimulus package will “pay” for cutting-edge medical research in every state across America. Could we assume that the word ”pay” might equate to “investment”? $1 B will go to research into the genetic causes of cancer and potential targeted treatments. Obama also promised a large infusion of funds into research on autism, which affects an estimated 1 in 150 U.S. children. “This kind of investment will also lead to new jobs: tens of thousands of jobs conducting research, manufacturing and supplying medical equipment, and building and modernizing laboratories and research facilities,” Obama said in a speech at the National Institutes of Health outside Washington. The more than 12,000 grant awards are part of an overall $100 B Recovery Act investment. (Reuters)
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A recent MassBio report found the number of biotechs in the state increased to about 400 over the past 7 years and the number of employees increased from 30,000 to 40,000. But the report also warned that 1/2 of the state’s publicly traded biotechs are in danger of running out of cash before the end of the year.
The effects of this current economic climate has put increased pressure on pharmaceutical companies to contain their costs; but this need has not just “arisen” from the recession as patent expirations, lack of late stage products, slimmer development pipelines, pricing pressures and tougher regulatory environments affect all. Current acquisition activities tend to be “storied” mergers to economic efficiencies, market focus and cost containment.
Venture capital (VC) investment was down 44% in the first half of 2009. The past boom attracted huge amounts of money but the present bust has changed the fundamentals of venture investment. Today, few can invest in new companies as there isn’t enough in the coffers for portfolio companies with IPOs non-existent and acquisition exits miniscule. VCs are having their own financing problems with their own inability to raise new funds. Hedge funds which frequently played in the crossover investment space as a source of funding have also retreated to the basics as their ranks have been depopulated and returns have been miniscule as related to this sector.
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