March 14, 2016 7:14am

 

CLBS enters into a global collaboration with Hitachi Chemical (HCHMY) that includes licensing, development and equity components

 

A positive and a negative as backed into a corner of depleted cash and share pricing, all they could do was sell - BUY


 

Hitachi Chemical has purchased a 19.9% equity interest in PCT for $19.4 M. CLBS will retain the remaining 80.1% ownership of PCT.

 

Caladrius intends to use the acquired capital for continued expansion and improvements at PCT in support of commercial product launch readiness as well as for general corporate purposes.

In addition, PCT has licensed its cell therapy technology and know-how to Hitachi Chemical for cell therapy manufacturing in certain Asian territories, including Japan, where the Pharmaceuticals and Medical Devices Agency has introduced more favorable legislation to stimulate the growth of regenerative medicine development in Japan.

 

The Bottom Line: Under the license agreement, Hitachi Chemical is to make upfront and near term milestone payments of $5.6 M – a lifeline.

In addition, Hitachi Chemical will pay service fees and royalties on contract revenue in those territories. Under the license arrangement, Hitachi Chemical is responsible for all capital and operational expenses associated with the establishment and operation of the Asian business on which PCT is entitled to royalty payments.  PCT and Hitachi Chemical have also agreed to explore the establishment of a JV in Europe.

When CEO Mazzo took the reins 15 months ago, the share price was $3.75 – says a lot for his tutelage.

 

CLBS closed at $0.83 which was UP +$0.15 on Friday. The pre-market indication is +$0.16 to $1.00 which also brings CLBS into NASDAQ compliance.

 

CLBS is UP at the open +$0.339 with 839.8 K shares traded <3 month average = 266.2 K shares>.