Fibrocell Science, Inc. (OTCBB:FCSC), a biotechnology company
focused on commercializing LAVIV, the first and only FDA-approved
personalized cell therapy in aesthetic dermatology, and on
developing innovative autologous cell therapies for additional
aesthetic, medical and scientific applications, today announced
that it has entered into a securities purchase agreement for a
private placement financing with a select group of institutional
investors and high net worth individuals, including NRM VII
Holdings I, LLC, a Third Security, LLC affiliated fund. Upon the
closing of the transaction, Fibrocell will receive gross proceeds
of $45.0 million from the sale of 450 million shares of common
stock at a price of $0.10 per share.
Concurrent with the closing of this transaction, the outstanding
Series D and Series E Convertible Preferred Stock will be converted
into common stock, leaving no remaining shares of preferred stock
outstanding. Also concurrent with the closing, approximately $2.1
million in principal amount of the Company’s outstanding
convertible notes will also be converted into common stock at a
conversion price of $0.10 per share and the remaining $1.5 million
in principal amount of the outstanding convertible notes will be
redeemed for cash with the proceeds from the transaction. The
outstanding convertible notes shall be converted and redeemed in
the amount of outstanding principal, accrued interest and interest
scheduled to maturity. There will be no debt outstanding at the
closing of the transaction.
Concurrent with this transaction, Fibrocell announced that it
has entered into a strategic collaboration with Intrexon
Corporation, a synthetic biology company that utilizes its
proprietary technologies to provide control over cellular function,
for the development and commercialization of the next generation of
genetically modified and non-genetically modified autologous
fibroblasts and autologous dermal cells in the U.S. Intrexon will
make available its proprietary platforms and technologies,
including UltraVector®, DNA and RNA MOD engineering, protein
engineering, transcription control chemistry, genome engineering,
cell processing, and cell system engineering, to the Fibrocell
program.
As consideration, Intrexon will receive an upfront technology
access fee of $3.2938 million payable by Fibrocell in common stock
at the price paid in this financing. Fibrocell will engage Intrexon
for support services for the development of new products under this
agreement and will reimburse Intrexon for these activities. Upon
commercialization of any of the products generated with Intrexon
technology under the agreement, Fibrocell will pay quarterly cash
royalties to Intrexon.
David Pernock, Chief Executive Officer of Fibrocell, stated,
“This is a transformative and strategic financing for Fibrocell.
With this capital we can unlock the power of our fibroblast
platform to improve the lives of patients and to create value for
stockholders. We now have a strong, simplified balance sheet, and
we believe the investment will allow us to accomplish our key
objectives: expand capacity to meet demand for LAVIV, improve our
manufacturing efficiency and COGS, and further our clinical
programs for potential new indications. The new relationship with
Intrexon is exciting and strategically important by granting us
access to their cutting edge technology so that we can continue to
innovate and maintain our leadership in cell-based therapy. We
warmly welcome our new investors and new board members and thank
our existing stockholders for their participation in helping shape
the future of the company.”
RJ Kirk, Chairman of Third Security and of Intrexon, stated, “We
believe Fibrocell is poised to lead in an important new category of
therapeutic arts. The Company has an excellent management team,
deep technical expertise, and proven production and commercial
platforms. With the capital this raise provides for expansion and
growth, we expect great success for LAVIV. And, through access to
Intrexon’s technology and the ability to innovate on top of an
established and approved platform, such that even early experiments
may be conducted within a GMP operating system, we expect the
Company to establish a leadership role in creating additional
high-value cellular therapeutics for underserved health needs. We
are committed to our partnerships with Fibrocell and look forward
to working with David and his team.”
The private placement is expected to close no later than October
11, 2012 and is subject to the satisfaction of customary closing
conditions.
The available proceeds from the private placement will provide
Fibrocell with the resources to expand the commercial launch of
LAVIV, its first FDA-approved product for the treatment of
nasolabial folds, to expand manufacturing capacity and implement
process improvements, and to advance further development of LAVIV
into other high unmet need indications such as the treatment of
severe restrictive burn scars, vocal cord scarring and acne
scars.
In conjunction with this financing transaction, Marcus E. Smith,
Senior Managing Director and General Counsel of Third Security,
LLC, and Julian P. Kirk, Managing Director of Third Security, LLC,
will join Fibrocell’s Board of Directors.
The Company’s stockholders approved a proposed amendment to its
Certificate of Incorporation to effect a reverse stock split of the
outstanding shares of common stock, as determined by the Board, if
the Board believes such action will facilitate the listing of the
Company’s common stock on a national securities exchange. The Board
does not have a timetable for any such reverse stock split, but the
amendment requires such reverse stock split, if it occurs, to be
effective prior to July 31, 2013. The Company believes that the
closing of this transaction is an important step in the Board’s
determination of whether to effectuate such reverse stock split and
seek listing of the common stock on a national securities
exchange.
MTS Securities, LLC acted as strategic advisor to the Company on
the transaction.
Barclays and MTS Securities, LLC acted as lead placement agents
and John Carris Investments, LLC acted as co-placement agent on the
transaction.
About LAVIV™ (azficel-T)
LAVIV was approved by the FDA on June 21, 2011 for the
improvement of the appearance of moderate-to-severe nasolabial fold
wrinkles in adults and is the first and only personalized cell
therapy approved by the FDA for aesthetic use. LAVIV is now
available in major metropolitan areas throughout the U.S.,
exclusively through board-certified dermatologists and plastic
surgeons who have been trained by Fibrocell Science on the
treatment process. A list of trained and certified physicians is
available at www.mylaviv.com and will be continually updated as new
physicians are trained and begin offering LAVIV in their
practice.
Fibrocell Science is conducting research to identify other
potential uses of LAVIV and their proprietary fibroblast
technology. There is no timeline regarding when Fibrocell Science
will seek FDA regulatory approval for additional uses.
Important Safety Information About LAVIV™ (azficel-T)
LAVIV is made especially for you from your own skin cells. Using
someone else’s cells can cause a serious reaction. Prior to
injection, confirm with your physician that your information on the
LAVIV vial is correct. The most common side effects of LAVIV are at
the injection-site, including redness, bruising, swelling, pain,
bleeding, lumps, irritation, and itchiness. In clinical trials with
LAVIV, most injection-site adverse reactions resolved within one
week and most required no treatment. Your health care provider will
help you to decide whether you are a candidate for LAVIV and may
help you avoid some of the adverse reactions from LAVIV.
Before getting LAVIV, tell your healthcare provider if you have
any medical problems including allergic reactions to any drugs or
food, bleeding disorders or take blood-thinning medicines like
aspirin, ibuprofen, or Coumadin® (warfarin sodium), keloids or
excessive scarring, skin cancer or any malignancy, genetic
disorders affecting your skin, immune problems or take medicines
that affect your immune system, or any other illness or medical
problem. The full Prescribing Information for LAVIV includes
additional warnings about adverse reactions that occurred in less
than 1% of patients following LAVIV treatment in clinical trials.
Talk to your healthcare provider about these warnings. Please tell
your healthcare provider if you are allergic to the antibiotics
amphotericin or gentamicin, bovine materials (products made from
cattle), or dimethyl sulfoxide (DMSO).
Do not use LAVIV if you have a skin infection on your face
because LAVIV treatment can make the infection worse.
Please see the accompanying full prescribing information for
LAVIV contraindications, warnings, precautions and adverse events
or visit www.mylaviv.com.
About Fibrocell Science, Inc.
Fibrocell Science, Inc. (OTCBB:FCSC) is an autologous cellular
therapeutic company focused on the development of innovative
products for aesthetic, medical and scientific applications.
Fibrocell Science is committed to advancing the scientific, medical
and commercial potential of autologous skin and tissue, as well as
its innovative cellular processing technology and manufacturing
excellence. For additional information, please visit
www.fibrocellscience.com.
Forward-Looking Statements
All statements in this press release that are not based on
historical fact are “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995 and the
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, without limitation,
the Company’s ability to close the financing transaction prior to
October 11, 2011. While management has based any forward-looking
statements contained herein on its current expectations, the
information on which such expectations were based may change. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of risks,
uncertainties, and other factors, many of which are outside of the
Company’s control, that could cause actual results to materially
differ from such statements. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set
forth under Item 1A “Risk Factors” in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2011, as updated in
“Item 1A. Risk Factors” in the Company’s Quarterly Reports on Form
10-Q filed since the annual report. The Company operates in a
highly competitive and rapidly changing environment, thus new or
unforeseen risks may arise. Accordingly, investors should not place
any reliance on forward-looking statements as a prediction of
actual results. The Company disclaims any intention to, and
undertakes no obligation to, update or revise any forward-looking
statements. Readers are also urged to carefully review and consider
the other various disclosures in the Company’s public filings with
the SEC.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy these securities, nor shall
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction.