As a result of good fortune, good planning, or both, several of our stem cell sector companies are in good shape, in terms of available cash, to see themselves through the developing recession.
While we can't imagine a more difficult time to raise capital for an emerging company in an emerging industry, one of our sector companies (OSIR) has done so in spades. In what may be the deal that puts stem cell regenerative medicine at center stage, Genzyme will make two upfront payments to Osiris Therapeutics: $75 million right away and $55 million on July 1, 2009. With milestones and royalties, Genzyme could pay Osiris another $1.25 billion. And, of course, that amount of money suggests the possibility of outright purchase of Osiris.
Under the deal, Osiris will handle sales in the U.S. and Canada, while Genzyme will market Osiris' stem cell drugs in the rest of the world, paying royalties to Osiris.
A second company, StemCells Inc. (STEM) has raised $20 million through institutional sales, while two other companies raised lesser amounts (ACTC.PK) and (ISCO.OB).
While Osiris is at the bottom of our Cash less Current Debt list based on the most recent accounting numbers, the Genzyme deal puts Osiris effectively in second place behind Geron Corporation which has $166 million available after current debt. With it's new institutional cash, StemCells Inc. ranks third, with Aastrom Biosciences fourth and Thermogenesis Corp. (KOOL) a close fifth of the sector's twenty companies. (See spreadsheet below)
Advanced Cell Technology (ACTC.PK), which has been continually challenged for available cash, raised $ 1 million in convertible debentures, pretty much a drop in the bucket relative to its $ 17 million in current debt.
As the sector grows ever closer to actually providing viable therapeutic cures (other than for the blood cancers that bone marrow stem cells have been used for since the seventies), it finds itself challenged by what may be the worst recessionary environment in many years. Kudos to those companies that continue to make deals that provide cash. For a look at the entire sector, including October market values, cash, short and long term debt, check following table:
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