Date: 2014-04-21
Type of information: Pipeline acquisition
Acquired company: Sanofi's Cell Therapy and Regenerative Medicine (CTRM) business
Acquiring company: Aastrom Biosciences (USA)
Amount: $6.5 million
Terms: * On June 16, 2014, Aastrom Biosciences, a US developer of patient-specific expanded cellular therapies for the treatment of severe diseases and conditions, announced its strategic plan to maximize the profitability and growth potential of the cell therapy and regenerative medicine business that it recently acquired from Sanofi. Through the acquisition, Aastrom acquired three approved autologous cell therapy products: Carticel® (autologous cultured chondrocytes) and Epicel® (cultured epidermal autografts), which currently are marketed in the United States, and MACI™ (matrix-applied characterized autologous cultured chondrocytes), which is approved in the European Union and is a Phase 3 product candidate in the United States. The acquired products have been supported by a commercial organization based in the U.S. and Europe and manufacturing and production facilities in Cambridge, Massachusetts and Copenhagen, Denmark. The Cambridge facility has been used for U.S. manufacturing and distribution of Carticel, worldwide manufacturing and distribution of Epicel and production of MACI for clinical testing. The Cambridge facility also houses the Manufacturing and Technical Services organization, which is responsible for process development, release assay development and technology transfers between sites and departments. The Copenhagen manufacturing facility has been responsible for MACI commercial manufacturing and distribution in Europe. The acquired business generated net revenues of approximately $44 million for the year ended December 31, 2013. Net revenues were $35.2 million for Carticel, $7.1 million for Epicel, and $1.6 million for MACI for the year ended December 31, 2013. Net revenues less operating expenses were approximately ($21.6) million for the period ending December 31, 2013, reflecting a net loss for the period of ($33.6) million reduced by $12.0 million in non-cash amortization charges and the write-off of intangibles. In addition to the amortization charges, expenses for the year ended December 31, 2013 included $12.7 million in other non-cash expenses and expenses allocated to the acquired business by Sanofi and its subsidiaries, as well as expenses for development activities which have been substantially completed. These expenses included approximately $9.3 million in research and development expenses that were attributable to MACI development activities for the year ended December 31, 2013. Selling, general and administrative costs included $2.2 million of costs and expenses allocated to the acquired business. Additional non-cash charges for depreciation and stock-based compensation totaled $1.2 million for the year ended December 31, 2013. Sales of MACI in Europe were $1.6 million, or 4% of total sales, and net losses attributable to European operations were approximately $7.0 million for the year ended December 31, 2013. Net revenues for the quarter ended March 31, 2014 were $10.4 million compared to net revenues of $10.3 million for the quarter ended March 31, 2013. Net revenues were $7.9 million for Carticel, $2.5 million for Epicel, and $0.1 million for MACI for the quarter ended March 31, 2014. Net revenues less expenses was ($5.4) million for the quarter ended March 31, 2014 compared to ($8.5) million for the quarter ended March 31, 2013. Expenses included $2.3 million of costs and expenses allocated to the acquired business and non-cash charges. Research and development and selling, general and administrative expenses allocated to the acquired business were $2.0 million for the quarter ended March 31, 2014. Additional non-cash charges for depreciation and stock-based compensation totaled $0.3 million for the quarter ended March 31, 2014. Sales of MACI in Europe were $0.1 million, or 1% of total revenues, and net losses attributable to European operations were approximately $1.6 million for the quarter ended March 31, 2014. After conducting a comprehensive strategic review of the acquired business, Aastrom has initiated to discontinue manufacturing of MACI in Denmark and temporarily cease sales of MACI in Europe. The U.S. manufacturing facility will serve as the exclusive manufacturing facility for commercial products of the acquired business. The Denmark manufacturing facility, licensed for commercial production in the EU, will be sold. * On June 2, 2014, Aastrom Biosciences announced that the company has completed its acquisition of Sanofi's cell therapy and regenerative medicine (CTRM) business unit. As announced on April 21, 2014, Aastrom paid $4 million in cash and $2.5 million in a promissory note to acquire the CTRM business, which includes three marketed products in the United States and Europe as well as manufacturing and production centers in the U.S. and Denmark. * On April 21, 2014, Aastrom Biosciences announced that it has entered into a definitive agreement to acquire Sanofi's Cell Therapy and Regenerative Medicine (CTRM) business for a purchase price of $6.5 million, with $4 million payable in cash at closing and $2.5 million payable in the form of a promissory note. The acquisition is subject to customary closing conditions and is scheduled to close in approximately three weeks.
Details: Sanofi acquired the CTRM business in 2011 through the acquisition of Genzyme Corporation. Through the CTRM acquisition, Aastrom is acquiring global commercial rights to three marketed autologous cell therapy products. Carticel® (autologous cultured chondrocytes) is an autologous chondrocyte implant (ACI) currently marketed in the United States for the treatment of articular cartilage defects. It was approved by the FDA in 1997 and has had more than 22,000 implants performed since that time. Epicel® (cultured epidermal autografts) is a permanent skin replacement for full thickness burns greater than or equal to 30% of total body surface area, and is marketed in countries around the world. MACI® (matrix-induced autologous chondrocyte implant) is a third-generation ACI product currently marketed in the European Union, with more than 10,000 patients treated to date. Revenues of those three products were $44 million in 2013.
Related: regenerative medicine cell therapy
