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Monday, April 30, 2012

Another > $100M month for companies in the cell therapy space


Last month we reported here on this blog that March was more than a $100M month for companies in the stem cell and cell-based regenerative medicine space in terms of monies raised.  

What we missed was a $15M grant from Cancer Prevention and Research Institute of Texas (CPRIT) for UK-based CellMedica.  This pumps last month's total to just under $140M.

This month, according to our sources, betters even March's better numbers by coming in at just over $170M though that is largely on the back of one large deal in Asia.  Here's how the numbers break down.

Allocure kicked off the month with a decent $25M Series B round from new syndicate member Lundbeckfond Ventures, as well as previous investors SV Life Sciences and Novo A/S.  Allocure is headed into phase 2 for acute kidney injury with an allogeneic mesenchymal stem cell therapeutic they currently call AC607.  

Little-known Canadian-based, Sernova then announced a $3.6M PIPE to fund continued development of its proprietary Cell Pouch System(TM), and, in particular, to fund the upcoming first-in-man clinical trial for patients with diabetes receiving an islet transplant.  The application to proceed with this trial is currently under review by Health Canada.

Next up was NeoStem closing a $6.8M public offering for "expanding" their contract manufacturing business, Progenitor Cell Therapy, and "enrolling the PreSERVE AMR-001 Phase 2 clinical trial for preserving heart function after a heart attack".  

The biggest deal of the month was a $65M convertible debt financing of China Cord Blood by none other than global powerhouse Kohlberg Kravis Roberts (KKR) through it KKR China Growth Fund L.P., a China-focused investment fund managed by KKR.  We believe this is deal is certainly an investment in the future of China's healthcare market potential but that it is bigger than that.  We believe a significant driver for this deal may likely have been the opportunity to consolidate this sector globally - to use a significant operation and 'war chest' to fund mergers and acquisitions on both the public and private cord blood banking sector worldwide.

The only classic first-round venture raise this month was a milestone-based $5M Series A by Bay City Capital into Phil Coelho's new company, SynGen, to fund his latest iteration of stem cell processing devices.

Forbion Capital then announced that it was leading a series D round, joined by fellow existing investors TVM Capital, Lumira Capital, Intersouth Partners, Caisse de depot et placement du Quebec, Morningside Group, and Aurora Funds, of $25M into Argos Therapeutics in order to kick them into their phase 3.  The hope here is that with some early phase 3 data they may be able to attract the elusive partner they couldn't land with a mere bucket of phase 2 data.

Innovacell landed the only European deal by announcing an 8.3M Euro (~$11M) investment by Buschier, Fides, HYBAG, and Uni Venture.  This will be used for the continued clinical development of its cell-therapy (ICES13) for the treatment of stress-urinary incontinence currently in a ph 3 study in several European countries.

ReNeuron announced a private placement also open to existing shareholders that brought in just under $10M (£6.1M) to support their phase 1 trial in stroke and other pre-clinical, clinical, and regulatory milestones. 

Finally, the Bio-Matrix Scientific Group, in an apparent ongoing quest to continuously reinvent itself, announced at month's end that they had formed a new subsidiary named Regen BioPharma and that they had raised $20M in a financing commitment from Southridge Partners II to purchase its common stock as required over the term of the agreement at a price set by an agreed formula.  This money is said to be dedicated to the acquisition of discovery-stage intellectual property and driving it through to phase 2 trials in an exercise of maximum value creation over a period they claim to be as short as 18-24 months.


So in the end, the month saw companies in the space raise just over $170M and even if you back out the stem cell banking deal its still over $100M for cell therapy companies.  

Over the 2 months, then, we've seen just over $311M raised through a variety of means by companies at every stage of maturity and for intended purposes ranging from acquisition, consolidation, early stage clinical development, and phase 3 testing.


p.s. If you are aware of other deals in the sector this month, let us know and we'll update this accordingly.