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Athersys to Raise Funds

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Athersys, Inc. (ATHX), a biotechnology company, is developing MultiStem for ulcerative colitis in collaboration with Pfizer Inc. (PFE). A double-blind, placebo-controlled, phase II trial is ongoing with initial results expected in early 2014. MultiStem is also being evaluated for ischemic stroke (phase II, enrollment ongoing with initial results expected mid-2014). The company is planning to initiate a phase II study on MultiStem for the acute myocardial infarction indication and a phase II/III for graft-versus-host disease.

In order to fund its ongoing trials and potential expansion of certain trials, apart from working capital needs and general corporate purposes, Athersys has entered into agreements to sell common stock (10,000,000 shares) and warrants (to purchase up to 3,500,000 shares of common stock) with gross proceeds of $20.0 million.

The warrants include immediately exercisable Series A warrants (to buy up to 2,098,785 shares) and Series B warrants (up to 1,401,215 shares), which will be non-exercisable for six months.  The warrants, which were offered for a purchase price of $2.00, have an exercise price of $2.50 per share. Both Series A warrants and Series B warrants are set to expire on Mar 31, 2015.

Institutional investors who have already invested in the company comprise the majority of the participants in the offering, which is due to close on Dec 3, 2013.

Athersys carries a Zacks Rank #3 (Hold). However, some better-ranked stocks include Actelion Ltd. (ALIOF) and Jazz Pharmaceuticals (JAZZ). Both stocks carry a Zacks Rank #1 (Strong Buy).

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