ReNeuron acquires business assets of AmCyte Inc. for $4m. 27/07/07
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- Published on Monday, 30 July 2007 04:00
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GUILDFORD, UK | July 27, 2007 | ReNeuron Group plc (LSE: RENE.L) today announces that it has entered into arrangements pursuant to which ReNeuron will acquire the business assets of AmCyte Inc., a development stage cell therapy company based in Santa Monica, California.
ReNeuron is acquiring AmCyte's proprietary cell encapsulation technology, together with its US laboratories and staff. ReNeuron intends to combine its own well-characterised, scalable pancreatic cells with AmCyte's cell encapsulation system, in order to produce a best-in-class islet cell therapy for Type 1 diabetes patients. The acquisition gives ReNeuron an operational presence in California, one of the world's leading centres for both academic and commercial stem cell research and development, and also enables the Company to explore other therapeutic cell types where ReNeuron's cell expansion technology and AmCyte's encapsulation system may deliver significant therapeutic benefit.
AmCyte's alginate-based cell encapsulation system, which is protected by an extensive patent portfiolio, enables the delivery of therapeutic cells of varying types and has been shown to maintain cell function in pre-clinical transplantation studies. AmCyte's primary focus is on the development of a cell therapy treatment for Type 1 diabetes patients. The company has previously undertaken initial clinical safety studies in the US and Canada in a small number of severely diabetic patients using encapsulated primary islets, with no safety or rejection issues arising as a result of the treatment.
ReNeuron recently announced success with its own ReN002 diabetes programme in generating insulin-producing islet cell clusters using its c-mycER cell expansion technology. The combination of ReNeuron's cells and AmCyte's encapsulation technology has the potential to overcome the two principle obstacles facing islet cell therapy for diabetes: the lack of suitable donated pancreatic tissue from which to derive high quality insulin-producing islet cells, and the immune rejection typically seen when transplanting raw islets into diabetes patients.
The consideration of US$4 million for the acquisition will be satisfied by the allotment and issue of 9,291,521 new ordinary 1p shares in ReNeuron Group plc which will be placed with investors on completion. In addition, ReNeuron is raising a further US$3.1 million, before expenses, by the allotment and issue of 7,184,669 new ordinary 1p shares for cash. The Directors intend that the net proceeds of the cash placing be used to provide sufficient working capital for the acquired business for at least the next year.
The 16,476,190 new ordinary shares have been placed at a price of 21p per share. It is expected that completion of the acquisition and the admission to AIM of the new ordinary shares will occur at 8:00 am on 1 August 2007. Collins Stewart Europe Limited acted as nominated adviser and broker to the Company. Commenting on the acquisition, Michael Hunt, Chief Executive Officer of ReNeuron, said:
"This transaction will substantially enhance ReNeuron's cell therapy capabilities, and we are also pleased to have struck the deal during a period of relative strength of sterling against the dollar. As well as bringing us a talented research and development team in the US, we believe that the combination of ReNeuron's ReN002 islet cells and AmCyte's encapsulation technology has the potential to place our business among the leaders in the development of a safe and efficacious cell therapy for Type 1 diabetes patients."
AmCyte's proprietary encapsulation technology is based on a novel alginate polymer and poly-L-lysine membrane configuration, in which the cells are encased in immunoprotective capsules. Protected by 16 issued patents, the technology has been refined by extensive know-how in material selection and process optimisation.
The capsule system allows small molecules and peptides produced by the encapsulated cells to transfer out of the capsule; allows nutrients to pass through the capsule to reach the cells; preserves cell function; is formulated to be biocompatible without immune suppression of the patient, and can be transplanted under a straightforward surgical procedure and be readily retrieved.
ReNeuron is a leading, UK-based stem cell therapy business. It is applying its novel stem cell platform technologies in the development of ground-breaking stem cell therapies to serve significant and unmet or poorly-met clinical needs.
ReNeuron has used its c-mycER technology to generate genetically stable stem cell lines from non-embryonic tissue sources. This technology platform has multi-national patent protection and is fully regulated by means of a chemically-induced safety switch. Cell growth can therefore be completely arrested prior to in vivo implantation.
ReNeuron has filed for approval to commence initial clinical studies in the US with its lead ReN001 stem cell therapy for chronic stroke disability. This represents the world's first such filing concerning a neural stem cell treatment for a major neurological disorder. There are an estimated 50 million stroke survivors worldwide, approximately one half of which are left with permanent disabilities. The annual health and social costs of caring for these patients is estimated to be in excess of £5 billion in the UK and in excess of US$50 billion in the US.
ReNeuron has also generated pre-clinical efficacy data with its ReN005 stem cell therapy for Huntington's disease, a genetic and fatal neurodegenerative disorder that affects around 1 in 10,000 people. This programme is in pre-clinical development. In addition to its stroke and Huntington's disease programmes, ReNeuron is developing stem cell therapies for Parkinson's disease, Type 1 diabetes and diseases of the retina.
ReNeuron has also leveraged its stem cell technologies into non-therapeutic areas – its ReNcell® range of cell lines for use in research and in drug discovery applications in the pharmaceutical industry. ReNeuron's ReNcell®CX and ReNcell®VM neural cell lines are marketed worldwide under license by Millipore Corporation.