Staff and Wire Reports
Friday, 10 December 2010 09:16
Aastrom Biosciences, Inc. (Nasdaq:ASTM) has finally announced what many investors have been expecting for some time. The emerging biotechnology company developing autologous cellular therapies for use in the treatment of severe, chronic cardiovascular diseases said that it has priced a public offering of 10,000,000 units, with each unit consisting of one share of the Company's common stock and one warrant to purchase one share of common stock, at a purchase price of $2.25 per unit for an aggregate offering amount of $22.5 million.
Each warrant will be exercisable at any time on or after the date of issuance until the fifth anniversary of the date of issuance at an exercise price of $3.22. The shares of common stock and warrants are immediately separable and will be issued separately. The offering is expected to close on December 15, 2010, subject to customary closing conditions.
The net proceeds to Aastrom, after underwriting discounts and commissions and other offering expenses, from the sale of the units are expected to be approximately $20.5 million. The Company intends to use the net proceeds from the offering for general corporate purposes, including research and development expenses such as expenses related to its Phase 3 CLI program, capital expenditures, working capital and general administrative expenses.
As readers know, Aastrom's recent data demonstrated a significant efficacy signal that should be investigated in Phase 3. The Phase 2 study met the primary endpoint, since it was powered to detect a difference in the time to treatment failure between Aastrom's TRC treatment and the control arm. Looking at the time to first CLI event, you can see there is certainly clinically meaningful improvements in patients. (See the slide below.) It's also important that the TRC's demonstrated consistent results between analyses. The results from this trial should help guide them in designing a successful Phase 3 program.
Investors should monitor the shares carefully if they are considering an entry point after they settle, given this news.
We are looking forward to seeing the 1-year data in 2011 and Investors shouldn't forget that Aastrom has two key upcoming catalysts. Aastrom hopes to have an SPA with the FDA for the Phase 3 design in CLI over the next 4-5 weeks(estimate), so that it can begin enrolling patients in Q1 2011. We will also be hearing about the Phase 2 IMPACT-DCM data in dilated cardiomyopathy(DCM). Investors should read this local news story (link) on how ASTM's treatment has helped out several patients. Dr. Patel is the lead clinical investigator for that study. Hopefully these positive stories about DCM patients treated with TRCs are a precursor to overall positive results in the study.
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