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Athersys, Inc. (NASDAQ: ATHX), a regenerative medicine company developing MultiStem® cell therapy, today announced that it has entered into a cooperation agreement with HEALIOS K.K. ("Healios"), the Company’s largest shareholder and one of its commercial partners, and Dr. Hardy TS Kagimoto, a member of the Company’s Board and the Chairman and Chief Executive Officer of Healios. The cooperation agreement is intended to reaffirm the mutual commitment to collaborative development of MultiStem in Japan.
Pursuant to the agreement, the parties commit to work in good faith to finalize negotiations, with a spirit of cooperation and transparency as quickly as possible, on open matters important to successful commercialization in Japan. Further, Dr. Kagimoto has also agreed to voluntarily dismiss the Section 220 litigation with prejudice that he initiated in the Court of Chancery of the State of Delaware and withdraw his Section 220 demand. The Board will also appoint Mr. Kenneth H. Traub, a former member of the Board of Athersys, as a director of the Company.
"This mutual agreement represents a significant positive development for Athersys, and we look forward to continuing to collaborate with Healios as a commercial partner," said Dr. Ismail Kola, Chairman of the Athersys Board. "This agreement will enable both Athersys and Healios to focus on advancing our late-stage programs for MultiStem, including preparing for top line results from Healios’ TREASURE trial for stroke and ONE-BRIDGE trial for ARDS, which we continue to expect in this year. With the accelerated regulatory pathways in Japan, we look forward to working closely with Healios as they prepare for their rolling submission for potential approval in Japan. We remain excited about the potential for MultiStem to change the lives of millions of patients globally and will continue to work towards expanding our international network of collaborations and alliances, to advance our clinical programs and drive value for our shareholders."
Dr. Kagimoto stated, "I am very pleased to have reached this mutually beneficial agreement with Athersys. I would like to compliment the independent directors of the Athersys Board on their constructive approach to our recent discussions, and I am confident the today’s announcements will strengthen the Company moving forward. This is a critical time for Athersys, as it is closer than ever to transitioning from its developmental stage into a growing, commercial biotech company positioned to address significant unmet patient needs. Healios continues to be fully committed to a successful partnership with Athersys, and we are focused on helping the Company realize its full potential in order to save and improve patient lives while helping to deliver value for all Athersys shareholders."
In addition, Healios has agreed to customary standstill and voting commitments in connection with the cooperation agreement. Additional information about the agreement with Healios will be included in a Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission.
About Kenneth H. Traub
Mr. Traub has a successful track record in building value as a leader and investor in numerous companies. He currently serves as Managing Partner of Delta Value Advisors, a consulting firm and Managing Partner of Delta Value Group, an investment management firm. Mr. Traub also currently serves as Chairman of the board of DSP Group, Inc. (NASDAQ: DSPG) and on the board of Tidewater, Inc. (NYSE: TDW). Mr. Traub was previously Managing Partner of Raging Capital Management, CEO of Ethos Management and CEO of American Bank Note Holographics, Inc. (NASDAQ: ABHH). Mr. Traub previously served on the board of directors of Athersys from 2012 – 2016 and from June 2020 – October 2020. Mr. Traub also previously served on the boards of directors of Voxware, Inc., Phoenix Technologies, Inc., iPass, Inc., MIPS Technologies, Inc., Xyratex Limited, Vitesse Semiconductor Corporation, AM Castle & Co., MRV Communications, Inc., IDW Media Holdings, Immersion Corporation, Gulfmark, Inc. and Intermolecular, Inc. Mr. Traub received a BA from Emory College and an MBA from Harvard Business School.
MultiStem® cell therapy is a patented regenerative medicine product candidate in clinical development that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of therapeutic factors in response to signals of inflammation and tissue damage. MultiStem therapy’s potential for multidimensional therapeutic impact may distinguish it from traditional biopharmaceutical therapies focused on a single mechanism of benefit. MultiStem represents a unique "off-the-shelf" stem cell product candidate that can be manufactured in a scalable manner, may be stored for years in frozen form, and is administered without tissue matching or the need for immune suppression. Based upon favorable outcome data, its novel mechanisms of action, and favorable and consistent tolerability data in clinical studies, we believe that MultiStem therapy may provide a meaningful benefit to patients, including those suffering from serious diseases and conditions with unmet medical need.
Athersys is a biotechnology company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The Company is developing its MultiStem® cell therapy product, a patented, adult-derived "off-the-shelf" stem cell product, initially for disease indications in the neurological, inflammatory and immune, cardiovascular and other critical care indications and has several ongoing clinical trials evaluating this potential regenerative medicine product. Athersys has forged strategic partnerships and a broad network of collaborations to further advance the MultiStem cell therapy toward commercialization. More information is available at www.athersys.com. Follow Athersys on Twitter at www.twitter.com/athersys.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These forward-looking statements relate to, among other things, the expected timetable for development of our product candidates, our growth strategy, and our future financial performance, including our operations, economic performance, financial condition, prospects, and other future events. We have attempted to identify forward-looking statements by using such words as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "should," "suggest," "will," or other similar expressions. These forward-looking statements are only predictions and are largely based on our current expectations. A number of known and unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some of the more significant known risks that we face are the risks and uncertainties inherent in the process of discovering, developing, and commercializing products that are safe and effective for use as therapeutics, including the uncertainty regarding market acceptance of our product candidates and our ability to generate revenues. The following risks and uncertainties may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements: our ability to raise capital to fund our operations, including but not limited to, our ability to access our traditional financing sources on the same or reasonably similar terms as were available to us before the COVID-19 pandemic; the timing and nature of results from MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial evaluating the administration of MultiStem for the treatment of ischemic stroke, and the Healios TREASURE and ONE-BRIDGE clinical trials in Japan evaluating the treatment in stroke and ARDS patients, respectively; the success of our MACOVIA clinical trial evaluating the administration of MultiStem for the treatment of COVID-19 induced ARDS, and the MATRICS-1 clinical trial being conducted with The University of Texas Health Science Center at Houston evaluating the treatment of patients with serious traumatic injuries; the impact of the COVID-19 pandemic on our ability to complete planned or ongoing clinical trials; the possibility that the COVID-19 pandemic could delay clinical site initiation, clinical trial enrollment, regulatory review and the potential receipt of regulatory approvals, payment of milestones under our license agreements and commercialization of one or more of our product candidates, if approved; the availability of product sufficient to meet commercial demand shortly following any approval, such as in the case of accelerated approval for the treatment of COVID-19 induced ARDS; the impact on our business, results of operations and financial condition from the ongoing and global COVID-19 pandemic, or any other pandemic, epidemic or outbreak of infectious disease in the United States; the possibility of delays in, adverse results of, and excessive costs of the development process; our ability to successfully initiate and complete clinical trials of our product candidates; the impact of the COVID-19 pandemic on the production capabilities of our contract manufacturing partners and our MultiStem trial supply chain; the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints, contamination, operational restrictions due to COVID-19 or other public health emergencies, labor constraints, regulatory issues or other factors which could negatively impact our trials and the trials of our collaborators; uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for neurological, inflammatory and immune, cardiovascular and other critical care indications; changes in external market factors; changes in our industry’s overall performance; changes in our business strategy; our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development; our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies; our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios; our collaborators’ ability to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies; the success of our efforts to enter into new strategic partnerships and advance our programs, including, without limitation, in North America, Europe and Japan; our possible inability to execute our strategy due to changes in our industry or the economy generally; changes in productivity and reliability of suppliers; the success of our competitors and the emergence of new competitors; and the risks mentioned elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019 under Item 1A, "Risk Factors" and our other filings with the SEC. You should not place undue reliance on forward-looking statements contained in this press release, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
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