MESOBLAST BUYS ANGIOBLAST; ANOINTS PROF SILVIU ITESCU; RAISES $37m
June 20th 2010 01:49
Wednesday May 12, 2010
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MESOBLAST, ANGIOBLAST
Mesoblast says it will acquire the shares in Angioblast it does not own, has appointed founder Prof Silviu Itescu the group chief executive officer and has raised $37 million.
Mesoblast said it had completed a $37 million capital raising to fund the acquisition and advance operations of the expanded Mesoblast group.
The company said the funds comprised $24 million invested immediately and $13 million committed subject to both shareholder approval and completion of the acquisition offer.
Prof Itescu told Biotech Daily that Mesoblast owned about 33 percent of Angioblast, he owned “about 40 percent” of Angioblast and less than 30 percent of Mesoblast.
Mesoblast chairman Brian Jamieson said the company was “delighted to bring the commercial rights to the patented adult stem cell technology platform under one umbrella”. “Mesoblast shareholders will derive much greater potential benefit from product commercialization and from the broader strategic partnerships or collaborations Mesoblast will now be able to conclude,” Mr Jamieson said.
Mesoblast said the capital was raised from UK and Australian investors at a share price of $1.70, a 12 percent discount to the closing price on May 3, 2010 and was managed by Southern Cross Equities with Lodge Partners.
Mesoblast said that to acquire the remaining 67 percent of Angioblast not owned by Mesoblast, the company would issue 94.6 million of its shares to Angioblast investors.
Together with Mesoblast’s current 140.6 million shares on issue, post-acquisition the Mesoblast group will have up to 235.2 million shares outstanding.
Angioblast stockholders will have the choice of either taking Mesoblast shares or up to 15 percent in cash and the balance in Mesoblast shares.
The company said the cash component would enable Angioblast stockholders who are subject to US Federal tax to fund the capital gains tax resulting from the transaction.
The acquisition is subject to conditions including Mesoblast and Angioblast shareholder approvals and satisfactory due diligence.
An extraordinary general meeting of Mesoblast shareholders is expected to be held before the end of June 2010.
Mesoblast said that the share price at the close of trading on May 3, 2010, would result in a capitalization of Mesoblast $455 million, not including today’s $37 million capital raising.
Mesoblast’s executive director Prof Silviu Itescu has been appointed chief executive officer and managing director of the group effective immediately.
Prof Itescu told Biotech Daily that the changes would have multiple benefits for the company and its investors.
“The synergies between the companies and having the technology in one company allow the investors and shareholder base to take advantage of the potential of both companies,” Prof Itescu said. “It also allows us to talk to commercialization partners with one voice.”
“Transforming Mesoblast from a biologics company focused on orthopaedic applications to a global leader in the broader regenerative medicine industry should prove to be a pivotal event in the company’s evolution,” Prof Itescu said in a media release.
Prof Itescu said consolidating the technology and assets would streamline corporate operations, strengthen management and assist the rational deployment of resources.
“Mesoblast is now a mature multi-product company with products in late, mid, and early stage development,” Prof Itescu said.
He said the company’s pipeline would be extended from orthopaedics, including spinal fusion and osteoarthritis, to include products for treating congestive heart failure, cardiac arrest, eye diseases, diabetes and bone marrow repair.
Mesoblast was up 5.5 cents or 2.8 percent to $1.99.
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