Full Press Release Details
Signs Definitive Agreement With Geron Regarding Stem Cell Assets
Commits to $10 Million Financing
ALAMEDA, Calif.--(BUSINESS WIRE)--January 7, 2013--BioTime, Inc. (NYSE
MKT: BTX) and its recently formed subsidiary BioTime Acquisition
Corporation (BAC) jointly announced today that they have entered into a
definitive Asset Contribution Agreement with Geron Corporation (Nasdaq:
GERN) to acquire the intellectual property, including patents and patent
applications, and other assets related to Geron's human embryonic stem
(hES) cell programs consistent with the financial terms outlined in the
letter of intent announced on November 15, 2012.
Under the definitive agreement, Geron will contribute to BAC
intellectual property, certain cell lines and other assets, including
the Phase 1 clinical trial of hES cell-derived oligodendrocytes in
patients with acute spinal cord injury, and Geron's autologous cellular
immunotherapy program. BioTime will contribute to BAC $5 million in
cash, 8,902,077 BioTime common shares to be held by BAC, five-year
warrants to purchase 8,000,000 common shares of BioTime at a price of
$5.00 per share ("BioTime Warrants"), rights to use certain clinical
grade hES cell lines, a sublicense to use certain patents for stem cell
differentiation technology, and minority stakes in two of BioTime's
subsidiaries, OrthoCyte Corporation and Cell Cure Neurosciences Ltd. BAC
will also pay to Geron royalties on the sale of products that are
commercialized, if any, in reliance upon Geron patents contributed or
licensed to BAC. A private investor has also agreed to provide an equity
investment of $5 million in BAC and a $5 million equity investment in
BioTime in conjunction with the transaction.
Geron pioneered the field of regenerative medicine in the mid-1990s by
organizing the first effort to isolate human embryonic stem (hES) cells.
hES cells are early-stage stem cells that are capable of becoming all of
the cell types in the human body, and therefore are widely recognized as
a means of manufacturing cells that are potentially useful in
regenerating tissue function for a wide array of degenerative diseases.
Currently, Geron's hESC patent portfolio includes over 400 patents and
patent applications that will be transferred or sublicensed to BAC.
Geron obtained the first approval from the Food and Drug Administration
for human clinical trials of a product manufactured from hES cells.
Geron's former hES cell programs included oligodendrocyte progenitor
cells for central nervous system disorders, cardiomyocytes for heart
disease, pancreatic islet cells for diabetes, dendritic cells as an
immunotherapy vehicle, and chondrocytes for cartilage repair. BAC may
pursue the development of therapeutic products from some or all of these
cell types, depending upon a number of factors, including the expected
cost of development, sufficiency of financing, the state of development
of the technology acquired, regulatory considerations, anticipated
market size, and competition from other companies in the applicable
fields. BAC may also seek to develop other therapeutic products, taking
into account the same or other applicable considerations.
"Our consistent goal at BioTime has been to consolidate the pluripotent
stem cell technology platform," stated Michael West, Ph.D., Chief
Executive Officer of BioTime, Inc. "With this contribution of assets,
the combined intellectual property estate in the BioTime family of
companies will be among the strongest in the field of Regenerative
Medicine; establishing our leadership in the industry and advancing
product development."
"We are excited about our approach toward consolidating the most
important technologies in Regenerative Medicine," said Thomas Okarma,
M.D., Ph.D., president and CEO of BAC. "Regenerative Medicine holds
great promise for patients and now, with our significant collection of
world class stem cell technologies, IP, and experienced management, we
are positioned to help realize that promise."
Closing of the transactions under the definitive agreement is subject to
certain negotiated closing conditions, including the registration of the
BAC Series A common stock, the BioTime common shares contributed to BAC,
and the BioTime Warrants under the Securities Act of 1933, as amended,
and certain approvals by BioTime shareholders. The transaction is
expected to close no later than September 30, 2013.
Upon closing of the transaction, Geron will receive BAC Series A common
stock, and BioTime and the private investor will receive BAC Series B
common stock in the transaction. The Series A and Series B common stock
will be identical, except that BAC will be entitled to make certain
distributions or pay dividends on its Series A common stock without
making a distribution or paying a dividend on its Series B common stock.
Following the closing of the transaction, Geron will distribute on a pro
rata basis to its stockholders the shares of BAC Series A common stock
received in the transaction. Following that distribution by Geron, BAC
will distribute on a pro rata basis to the holders of those shares the
BioTime Warrants. The Series B common stock will be convertible into
Series A common stock following the distribution of the BioTime Warrants.
Following these distributions, BioTime will own approximately 71.6%,
Geron stockholders will own approximately 21.4%, and the private
investor will own approximately 7.0%, of the outstanding BAC common
stock. BioTime and the private investor will also receive warrants to
purchase additional shares of BAC Series B common stock that would
enable them to increase their collective ownership in BAC by
approximately 2.2%, which would reduce the Geron stockholders' ownership
in BAC to approximately 19.2%.
BAC plans to seek to list its Series A common stock, and BioTime intends
to seek to list the BioTime Warrants, on a national securities exchange.
In anticipation of use by BAC, BioTime is entering into a three-year
lease of an office and research facility in Menlo Park, Calif.
In a separate and related transaction, BioTime and BAC have each entered
into Stock and Warrant Purchase Agreements with a private investor to
provide each company with $5 million in equity financing. Under the
terms of the BioTime agreement, the investor will invest $5 million in
BioTime by purchasing an aggregate of 1,350,000 BioTime common shares at
a purchase price of approximately $3.70 per share and warrants to
purchase 650,000 additional BioTime common shares with an exercise price
of $5.00 per share and a three year term. The shares and warrants will
be sold to the investor in two tranches. In the first tranche, the
investor will purchase 540,000 BioTime common shares and warrants to