Medgenics Ltd. (AIM:MEDG; AMEX: MDGN) is in talks with Baxter Healthcare Corporation to extend their 2009 collaboration on the development of a Factor VIII Biopump for the treatment of hemophilia to replace the agreement that expired on September 30.
Baxter has invested $7 million in the product to date. The Factor VIII Biopump is almost ready for clinical trials. Baxter has not commented on the report; it rarely comments about its collaboration with Medgenics, but if ending the collaboration could cause Medgenics to hemorrhage.
Medgenics' products, which apply a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, are far from reaching market, which is why a new agreement with Baxter is critical. A new and expanded agreement will legitimize Madgenics' technology.
Medgenics has begun a trial of its anemia treatment, which it is developing independently. It expects results by the end of the year. The company is also targeting its technology for the treatment of multiple sclerosis, arthritis, diabetes, obesity, and human growth hormone deficiency.
Medgenics has $10 million in cash, enough for a few years, but not enough to make substantial development of its products. The company held its IPO on London’s Alternative Investment Market (AIM) at a company value of $21 million in 2007, but a cash shortage led to the collaboration agreement with Baxter two years later. Against the odds, six months ago, it raised $12 million at a company value of $18 million, after money, in an offering on the American Stock Exchange.
Medgenics's share price fell 0.6% on AMEX on Friday to $4.63, giving a market cap of $44 million, but rose 2.5% on the AIM to ₤2.10.
Published by Globes [online], Israel business news - www.globes-online.com - on October 16, 2011
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