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Cytomedix snags Aldagen for $16 million in stock
02-09-2012
by Kelsey Kaustinen  |  Email the author
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GAITHERSBURG, Md. Cytomedix, Inc. has announced the completion of its acquisition of Aldagen Inc., a privately held developer of regenerative cell therapies based on its proprietary ALDH bright cell technology, in a move that strengthens its foothold in regenerative therapies.  
 
"This strategic acquisition of Aldagen provides Cytomedix with a novel, patent-protected cell selection technology that fits well with our existing commercial products and strengthens our long-range growth profile," Martin P. Rosendale, Chief Executive Officer of Cytomedix, said in a press release. "In combination, we now touch the three pillars of regenerative medicine with autologous stem cells, platelet- derived signal molecules and plasma scaffolds. We view the acquisition of Aldagen as an opportunistic transaction at an attractive valuation that will allow us to build and expand our new product development efforts with Aldagen's technology, intellectual property, people and clinical expertise. In terms of maximizing opportunity for our shareholders while managing and mitigating risk, we feel this transaction is very advantageous."
 
 
Per the terms of the transaction, Cytomedix issued preffered shares valued at $16 million, with additional consideration to be paid in common stock if several clinical milestones are achieved. In addition, certain Aldagen investors purchased $5 million of Cytomedix common stock in a private placement.  
 
At the closing, 135,398 newly designated Cytomedix Series E preferred shares were issued to Aldagen shareholders. Pro forma for the conversion of these shares to common stock, Aldagen shareholders will own approximately 17.3 percent of Cytomedix's common outstanding shares after the conversion and/or redemption of all existing Cytomedix preferred shares. In addition, the transaction also includes contingent milestone payments totaling up to 20,309,723 shares, which will be issued to Aldagen shareholders if certain clinical milestones are achieved in association with Aldagen's ongoing Phase II trial in post-acute ischemic stroke. Eighty percent of the contingent consideration will be issued only if a favorable clinical efficacy signal is achieved in the trial.
 
"We are delighted to join forces with Cytomedix as this alignment unites commercial products with a growing revenue stream with a deep pipeline of clinical opportunities," Richard Kent, M.D., Chairman of the Board of Aldagen, said in a press release. "We believe these autologous technologies are complementary and hold potential to produce more therapeutics than either one could on its own. The commitment of additional capital into Cytomedix by certain Aldagen investors underscores our confidence in the very promising potential for the combination of these regenerative technologies to change how we treat a variety of large disease areas with continued unmet medical need."
 
 
As an additional criterion of the transaction, as of closing, three Aldagen board members have joined Cytomedix's board of directors, which has been expanded to nine seats. The new Cytomedix board members include Kent; Lyle Hohnke, Ph.D., Aldagen's former Chief Executive Officer; and Joseph Del Guercio, Managing Director of CNF Investments and a current Board Observer for Aldagen. In accordance with the new additions, Craig Mendelsohn stepped down from Cytomedix's board of directors. Additionally, Edward L. Field, Aldagen's Chief Operating Officer, has been appointed as Chief Operating Officer of Cytomedix.
 
Aldagen is now a wholly owned Cytomedix subsidiary, and will retain its manufacturing and product development facilities based in Durham, N.C.
 
 
SOURCE: Cytomedix, Inc. press release
 
Code: E02081200

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