Athersys (ATHX) and HEALIOS K.K. Binding letter of intent to expand MultiStem® Collaboration

March 13, 2018 10:54am

As reported in the pre-open: LOI includes $21 million equity investment at $1.76 per share, will deposit $10 million into escrow, and will receive a warrant that will give it the right, but not the obligation, to purchase additional shares of ATHX common stock up until 9/1/20.

The shares are up +$0.27 or +17.31%

LOI Includes equity investment for P3 stroke study in North America, Europe, expansion of Japan collaboration, including exclusive option for China development and commercialization consolidating development of MultiStem indications in key Asian markets

Healios is making an approximate $21 million equity investment at $1.76 per share, will deposit $10 million into escrow, and has entered into a letter of intent (“LOI”) with Athersys to expand Healios’ license to develop MultiStem® products for indications to include acute respiratory distress syndrome (“ARDS”), trauma in Japan and the use of MultiStem products in conjunction with organ bud technology and certain ophthalmological indications globally. 

Healios will also obtain an exclusive option to a license to develop and commercialize MultiStem products for ischemic stroke, ARDS and trauma in China, and obtain certain other rights. 

In exchange, ATHX would receive committed payments of $35 million, as well as additional payments, including milestones and royalties. 

If Healios elects to exercise its option for a license in China, Healios would pay Athersys license fees, milestone payments and escalating royalties or profit-sharing for each indication.

In addition to its purchase of 12 million shares of common stock as part of its equity investment, Healios will receive a warrant that will give it the right, but not the obligation, to purchase additional shares of Athersys common stock up until September 1, 2020, subject to certain conditions and limitations, including a fixed exercise price with respect to certain of the warrant shares and a floating exercise price with respect to certain of the warrant shares that will be based on the greater of a minimum floor price and the-then current market price, as well as a cap on the total number of shares Healios may own during the term of the warrant of 19.9% of Athersys’ outstanding common stock. 

The warrant becomes exercisable if the collaboration expansion becomes effective.

As part of Healios’ equity investment, Dr. Hardy Kagimoto, CEO of Healios, would be nominated for election to the Athersys Board of Directors at the next scheduled annual stockholders’ meeting in June 2018.

My question si ... WHO has controlling interest, certainly NOT ATHX? WHY is it NOT considered a SALE ...?