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Advanced Cell Technology Secures $5 Million Credit Facility to Develop RPE Program for the Treatment of Diseases of the Eye
Last update: 3/11/2009 8:52:00 AM
Facility Convertible into Common Stock at Significant Premium to Market
WORCESTER, Mass., Mar 11, 2009 (BUSINESS WIRE) -- Advanced Cell Technology, Inc. ("ACT" or the "Company") (PINKSHEETS: ACTC) announced today that it has entered into a definitive agreement with a life sciences fund (the "Investor"), which has offices in New York and California, under which the Company has secured a $5 million credit facility (the "Facility"). Proceeds from the Facility must be used exclusively for the development of the Company's retinal pigment epithelium (RPE) cells program for the treatment of diseases of the eye. Advanced Cell believes that the proceeds will be sufficient for the Company to file an IND for its RPE program this Summer, and will allow the Company to complete both Phase I and Phase II studies in humans. An IND is required to commence clinical trials.
Under the terms of the Facility, the Company may drawdown funds, as needed for clinical development of the RPE Program, from the Investor, who is an affiliate of a large shareholder in Advanced Cell, through the issuance of Series A-1 Convertible Preferred Stock (the "Preferred Stock") . The Preferred Stock pays dividends, in kind of Preferred Stock, at an annual rate of 10%, matures in four years from the drawdown date, and is convertible into common stock at $0.75 per share. The Company also paid the Investor a commitment fee equal to 5% of the Facility.
"We are excited that we have secured the financing necessary to move our RPE program through the clinic, and are gratified that a life sciences fund has recognized the potential of this program," said William M. Caldwell, CEO and Chairman of ACTC. "Diseases of the eye affects more than 30 million people worldwide and represents a $28 billion market. We believe that this funding will allow us to advance our proprietary technology, which has the potential to generate stable cell lines, through key stages of clinical development, generating significant value for shareholders."
Advanced Cell Technology is currently focused on using its proprietary technologies to generate stable cell lines including retinal pigment epithelium (RPE) cells for the treatment of diseases of the eye. Age-related macular degeneration (AMD) affects more than 30 million people worldwide and is the leading cause of blindness in people over 60 years of age in the United States. AMD is a disorder that affects the macula of the eye that causes decreased visual acuity and possible loss of central vision. The prevalence of AMD begins to increase after the age of 50. Approximately 15% of people over 75 years of age have the condition.
ACT demonstrated the ability to rescue visual function in rats through implantations of RPE cells derived from human embryonic stem cells. In collaboration with Raymond Lund then at the Moran Eye Institute at the University of Utah and currently working at the Casey Eye Institute at the Oregon Health and Science University, the Company performed RPE transplantation into sub-retinal space of rats that naturally become blind in several weeks due to RPE degeneration and photoreceptor death. In the experiments conducted by the Company, the rats were injected with embryonic stem-RPE cells into the sub-retinal space of the eye at 21 days after their birth -- an age at which photoreceptor degeneration has not yet occurred. As control measures, some rats received injections of cell culture medium alone or were not injected at all. Subsequently, tests for visual function were performed at 60 and 90 days after birth -- times at which loss of photoreceptor cell has produced characteristic vision deficits. The results represented a major breakthrough. The injected RPE cells grew normally without forming teratomas. Soon, the rats were able to follow lights with their eyes and attained approximately 70% of the spatial acuity of a normal, healthy rat. Necropsy revealed that the eyes had grown layers of the retinal cells. The experiment demonstrated that animals receiving the human embryonic stem cell-derived RPE cells performed significantly better than medium-only treated (50% improvement), or untreated (100% improvement) controls in visual performance. In addition, the human embryonic stem cell-derived RPE cells did not appear to cause any side effects in the animals. The research was published in Cloning and Stem Cells and was also referenced in Scientific American.