RENE.L Regulatory News (RENE)

27 Jul 2007 07:01

ReNeuron Group plc27 July 2007 ReNeuron acquires business assets of AmCyte Inc. for $4m Company gains clinically-tested cell encapsulation technology in diabetes and a US research and development facility Guildford, UK, 27 July 2007: ReNeuron Group plc (LSE: RENE.L) today announcesthat it has entered into arrangements pursuant to which ReNeuron will acquirethe business assets of AmCyte Inc., a development stage cell therapy companybased in Santa Monica, California. ReNeuron is acquiring AmCyte's proprietary cell encapsulation technology,together with its US laboratories and staff. ReNeuron intends to combine itsown well-characterised, scalable pancreatic cells with AmCyte's cellencapsulation system, in order to produce a best-in-class islet cell therapy forType 1 diabetes patients. The acquisition gives ReNeuron an operationalpresence in California, one of the world's leading centres for both academic andcommercial stem cell research and development, and also enables the Company toexplore other therapeutic cell types where ReNeuron's cell expansion technologyand AmCyte's encapsulation system may deliver significant therapeutic benefit. AmCyte's alginate-based cell encapsulation system, which is protected by anextensive patent portfiolio, enables the delivery of therapeutic cells ofvarying types and has been shown to maintain cell function in pre-clinicaltransplantation studies. AmCyte's primary focus is on the development of a celltherapy treatment for Type 1 diabetes patients. The company has previouslyundertaken initial clinical safety studies in the US and Canada in a smallnumber of severely diabetic patients using encapsulated primary islets, with nosafety or rejection issues arising as a result of the treatment. ReNeuron recently announced success with its own ReN002 diabetes programme ingenerating insulin-producing islet cell clusters using its c-mycER cellexpansion technology. The combination of ReNeuron's cells and AmCyte'sencapsulation technology has the potential to overcome the two principleobstacles facing islet cell therapy for diabetes: the lack of suitable donatedpancreatic tissue from which to derive high quality insulin-producing isletcells, and the immune rejection typically seen when transplanting raw isletsinto diabetes patients. The consideration of US$4 million for the acquisition will be satisfied by theallotment and issue of 9,291,521 new ordinary 1p shares in ReNeuron Group plcwhich will be placed with investors on completion. In addition, ReNeuron israising a further US$3.1 million, before expenses, by the allotment and issue of7,184,669 new ordinary 1p shares for cash. The Directors intend that the netproceeds of the cash placing be used to provide sufficient working capital forthe acquired business for at least the next year. The 16,476,190 new ordinaryshares have been placed at a price of 21p per share. It is expected thatcompletion of the acquisition and the admission to AIM of the new ordinaryshares will occur at 8:00 am on 1 August 2007. Collins Stewart Europe Limitedacted as nominated adviser and broker to the Company. Commenting on the acquisition, Michael Hunt, Chief Executive Officer ofReNeuron, said: "This transaction will substantially enhance ReNeuron's cell therapycapabilities, and we are also pleased to have struck the deal during a period ofrelative strength of sterling against the dollar. As well as bringing us atalented research and development team in the US, we believe that thecombination of ReNeuron's ReN002 islet cells and AmCyte's encapsulationtechnology has the potential to place our business among the leaders in thedevelopment of a safe and efficacious cell therapy for Type 1 diabetes patients." Enquiries: ReNeuronMichael Hunt, Chief Executive Officer Tel: +44 (0) 1483 302560Dr John Sinden, Chief Scientific Officer Financial DynamicsEuropeDavid Yates Tel: +44 (0) 20 7831 3113Claire RowellUSRobert Stanislaro Tel: +1 212 850 5657 Collins Stewart Europe LTD Tel: +44 (0) 20 7523 8000Tim Mickley About diabetes Type 1, or juvenile, insulin-dependent diabetes usually strikes in childhood andleads to the progressive destruction of the insulin-secreting pancreatic isletcells and impaired glucose metabolism. This can result in complications such asblindness, neuropathies, and kidney and liver problems. There is no effectivecure. Recombinant insulin injection is the principal current treatment,together with diet management. A small number of patients receive pancreastransplants but donor organ supply is low and the immunosuppressant drug regimenrequired is problematic. Type 1 diabetes accounts for approximately 5-15% of all diagnosed cases ofdiabetes. There are estimated to be 5 million sufferers of Type 1 diabetesworldwide. The direct and indirect costs of Type 1 diabetes in the US areestimated at US$5 billion per annum. About AmCyte's cell encapsulation technology AmCyte's proprietary encapsulation technology is based on a novel alginatepolymer and poly-L-lysine membrane configuration, in which the cells are encasedin immunoprotective capsules. Protected by 16 issued patents, the technologyhas been refined by extensive know-how in material selection and processoptimisation. The capsule system allows small molecules and peptides producedby the encapsulated cells to transfer out of the capsule; allows nutrients topass through the capsule to reach the cells; preserves cell function; isformulated to be biocompatible without immune suppression of the patient, andcan be transplanted under a straightforward surgical procedure and be readilyretrieved. About ReNeuron ReNeuron is a leading, UK-based stem cell therapy business. It is applying itsnovel stem cell platform technologies in the development of ground-breaking stemcell therapies to serve significant and unmet or poorly-met clinical needs. ReNeuron has used its c-mycER technology to generate genetically stable stemcell lines from non-embryonic tissue sources. This technology platform hasmulti-national patent protection and is fully regulated by means of achemically-induced safety switch. Cell growth can therefore be completelyarrested prior to in vivo implantation. ReNeuron has filed for approval to commence initial clinical studies in the USwith its lead ReN001 stem cell therapy for chronic stroke disability. Thisrepresents the world's first such filing concerning a neural stem cell treatmentfor a major neurological disorder. There are an estimated 50 million strokesurvivors worldwide, approximately one half of which are left with permanentdisabilities. The annual health and social costs of caring for these patientsis estimated to be in excess of £5 billion in the UK and in excess of US$50billion in the US. ReNeuron has also generated pre-clinical efficacy data with its ReN005 stem celltherapy for Huntington's disease, a genetic and fatal neurodegenerative disorderthat affects around 1 in 10,000 people. This programme is in pre-clinicaldevelopment. In addition to its stroke and Huntington's disease programmes,ReNeuron is developing stem cell therapies for Parkinson's disease, Type 1diabetes and diseases of the retina. ReNeuron has also leveraged its stem cell technologies into non-therapeuticareas - its ReNcell(R) range of cell lines for use in research and in drugdiscovery applications in the pharmaceutical industry. ReNeuron's ReNcell(R)CXand ReNcell(R)VM neural cell lines are marketed worldwide under license byMillipore Corporation. ReNeuron's shares are traded on the London AIM market under the symbol RENE.L. Further information on ReNeuron and its products can be found atwww.reneuron.com. Data sources: Juvenile Diabetes Research Foundation; UK Stroke Association;American Stroke Association. This announcement contains forward-looking statements with respect to thefinancial condition, results of operations and business achievements/performanceof ReNeuron and certain of the plans and objectives of management of ReNeuronwith respect thereto. These statements may generally, but not always, beidentified by the use of words such as "should", "expects", "estimates","believes" or similar expressions. This announcement also containsforward-looking statements attributed to certain third parties relating to theirestimates regarding the growth of markets and demand for products. By theirnature, forward-looking statements involve risk and uncertainty because theyreflect ReNeuron's current expectations and assumptions as to future events andcircumstances that may not prove accurate. A number of factors could causeReNeuron's actual financial condition, results of operations and businessachievements/performance to differ materially from the estimates made or impliedin such forward-looking statements and, accordingly, reliance should not beplaced on such statements. The terms 'ReNeuron', 'the Company' or 'the Group' used in this statement referto ReNeuron Group plc and/or its subsidiary undertakings, depending on thecontext. This information is provided by RNS The company news service from the London Stock Exchange