$21 Million in Private Placements, Funded in Two
Tranches, Including $5 Million from Sanford Health to Support
Type 1 Diabetes Candidate Development
Caladrius Biosciences, Inc. (NASDAQ:CLBS) (“Caladrius” or the
“Company”), a cell therapy company combining an industry-leading
development and manufacturing services provider through its
subsidiary PCT, LLC a Caladrius Company™ (“PCT”) with a select
therapeutic development pipeline, today announced that on September
14, 2016, it entered into Securities Purchase Agreements with
several accredited investors for the sale of 4,449,153 shares of
its common stock in private placements of $21 million. Caladrius
has a pre-existing relationship with each of these investors,
including its now largest institutional shareholder and its
strategic collaborator, Sanford Health (“Sanford”), one of the
largest health systems in the United States. The private
placements were priced at $4.72 per share of common stock, which
represented the closing price of the Company’s common stock on
September 13, 2016. These private placements do not include
any stock purchase warrants or any future price adjustments.
Sanford, which includes Sanford Research, a non-profit research
organization focused on finding a cure for type 1 diabetes, agreed
to invest $5 million in this transaction.
Each of the investors in the private placements
will invest pro rata in two tranches: (i) $12.6 million is expected
to close- on or about September 19, 2016, subject to satisfaction
of customary closing conditions, and (ii) $8.4 million is expected
to close upon the enrollment of 70 patients in the Company’s Phase
2 Sanford Project: T-Rex Study clinical trial for CLBS03 and the
satisfaction of other customary closing conditions. The Company
presently anticipates that it could achieve the enrollment of 70
patients as early as mid-2017.
Concurrently with these private placements, the
Company entered into a definitive Securities Purchase Agreement
with Aspire Capital Fund, LLC (“Aspire Capital”), providing for the
sale of 847,458 shares of its common stock in a registered direct
offering for $4 million. This offering was also priced at
$4.72 per share of common stock and does not include any stock
purchase warrants or any future price adjustments. Aspire Capital
has also been a long-term shareholder of the Company.
Caladrius intends to use the net proceeds from
the transactions for execution of the Company’s T-Rex Study,
principal and interest payments on its loan from Oxford Finance,
LLC, and working capital and general corporate purposes.
The shares were offered directly to the
investors without a placement agent or underwriter.
The shares of common stock to be issued in the
registered direct offering described above were offered pursuant to
a “shelf” registration statement (File No. 333-206175), which
was declared effective by the United States Securities and Exchange
Commission (“SEC”) on August 28, 2015.
The shares of common stock to be sold in the
private placement have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), or applicable state
securities laws and accordingly may not be offered or sold in the
United States except pursuant to an effective registration
statement or an applicable exemption from the registration
requirements of the Securities Act and such applicable state
securities laws. The Company will file a registration statement to
cover the “resale” of the shares of common stock to be purchased in
the private placement.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any of the
securities described herein, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction. When filed with the SEC, copies of the prospectus
supplement and the accompanying base prospectus relating to this
offering may be obtained at the SEC’s website at
http://www.sec.gov.
About The Sanford Project: T-Rex
Study
The landmark study, which is being conducted in
collaboration with Sanford Research, a Sanford Health subsidiary,
is a prospective, randomized, placebo-controlled, double-blind
Phase 2 clinical trial to evaluate the safety and efficacy of
CLBS03 as a treatment for recent-onset T1D with residual beta cell
function, in approximately 111 patients age 12 to 17 in two cohorts
of subjects. Enrollment of the first cohort, designated for a
preliminary safety evaluation, was completed in August 2016.
The result of this evaluation is expected by the end of 2016 and,
if satisfactory, will enable the initiation of enrollment of the
second subject cohort to reach a total enrollment of approximately
111 subjects. Patients are randomized into one of three
groups to receive either a high dose of CLBS03, a low dose of
CLBS03 or placebo. The key endpoints for the trial are the
standard medical and regulatory endpoints for a T1D trial and
include preservation of C-peptide, an accepted measure for
pancreatic beta cell function; insulin use; severe hypoglycemic
episodes; and glucose and hemoglobin A1c levels. For more
information on the T-Rex Study, please visit
https://clinicaltrials.gov/ct2/show/NCT02691247.
About Sanford Health
Sanford Health is an integrated health system headquartered in
the Dakotas. It is one of the largest health systems in the nation
with 43 hospitals and nearly 250 clinics in nine states and four
countries. Sanford Health’s 27,000 employees, including 1,400
physicians, make it the largest employer in the Dakotas. Nearly $1
billion in gifts from philanthropist Denny Sanford have allowed for
several initiatives, including global children's clinics, genomic
medicine and specialized centers researching cures for type 1
diabetes, breast cancer and other diseases. For more information,
visit sanfordhealth.org.
About Caladrius Biosciences, Inc.
Caladrius Biosciences, Inc. is advancing a proprietary platform
technology for immunomodulation by pioneering the use of T
regulatory cells as an innovative therapy for recent onset type 1
diabetes. The product candidate, CLBS03, is the subject of an
ongoing Phase 2 clinical trial (The Sanford Project: T-Rex study)
in collaboration with Sanford Research, and has been granted Orphan
Drug and Fast Track designation by the U.S. Food and Drug
Administration and Advanced Therapeutic Medicinal Product
classification by the European Medicines Agency. The
Company’s PCT subsidiary is a leading development and manufacturing
partner to the cell therapy industry. PCT works with its
clients to overcome the fundamental challenges of cell therapy
manufacturing by providing a wide range of innovative services
including product and process development, GMP manufacturing,
engineering and automation, cell and tissue processing, logistics,
storage and distribution, as well as expert consulting and
regulatory support. PCT and Hitachi Chemical Co., Ltd. have
entered into a strategic global collaboration to accelerate the
creation of a global commercial cell therapy development and
manufacturing enterprise with deep engineering expertise.
For more information, visit www.caladrius.com.
Cautionary Statement on Forward-Looking
Statements
Certain matters discussed in this release and oral statements
made from time to time by representatives of the Company may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and the Federal
securities laws. Such forward-looking statements include, without
limitation, statements with respect to the completion, timing and
size of the offering, the expected proceeds from the offering and
the anticipated use of the proceeds from the offering.
Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that its expectations will be
achieved.
Forward-looking information is subject to certain risks, trends
and uncertainties that could cause actual results to differ
materially from those projected. Many of these factors are beyond
the Company’s ability to control or predict. Important factors that
may cause actual results to differ materially and that could impact
the Company and the statements contained in this release can be
found in the Company’s filings with the Securities and Exchange
Commission including the Company’s Reports on Forms 10-K and 10-Qs
for the year ended December 31, 2015 and the quarter ended
June 30, 2016. For forward-looking statements in this release,
the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The Company assumes no obligation to
update or supplement any forward-looking statements whether as a
result of new information, future events or otherwise.
Contacts:
Investors:
LHA
Anne Marie Fields
Senior Vice President
Phone: +1-212-838-3777
Email: afields@lhai.com
Media:
Caladrius Biosciences, Inc.
Eric Powers
Director, Communications and Marketing
Phone: +1-212-584-4173
Email: epowers@caladrius.com
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