The share price of stock market shell Oceana Advanced Industries Ltd. (TASE:OCEA) fell 64.4% today, after the company announced plans to merge with a stem cell company. Sources inform ''Globes'' that the company in question is BoneUs Therapeutics Ltd. founded by Dr. Shai Meretzki, who co-founded Pluristem Therapeutics Ltd. (Nasdaq:PSTI; DAX: PJT: PLTR).
Meretzki was unavailable for comment.
In a notice to the TASE, Oceana said that, if the deal is closed, it will fully own BoneUs Therapeutics, whose shareholders will control Oceana. Oceana's share price fell to NIS 0.093, giving a market cap of NIS 9.5 million.
Oceana used to be a marine engineering company for the oil and gas exploration industry. The failure of its business and heavy losses forced the company into receivership and it was taken over by Yaron Yenni and Dror Azmon, who specialize in mergers by stock market shells.
The merger target, BoneUs Therapeutics, is developing a technique for using stem cells to recreate bone tissue. Meretzki developed a proprietary technique to increase bone tissue three dimensionally, customizing the tissue to the space of the implant in a way that improves the chances that the implant will be quickly accepted by the body, according to the company's presentation.
450,000 bone implants are made every year in the US alone. The implants usually use bone taken from another part of the patient's body, which requires a second surgical procedure. BoneUS Therapeutics' product, which is under development, aims to save this second procedure.
Pluristem's product is also based on a 3D stem cell matrix. Pluristem is not developing bone tissue, but specializes in treating blockages in limb arteries. Pluristem's product is derived from placental stem cells customized for each patient, whereas BoneUS Therapeutics' product multiplies stem cells take from the patient himself.
Meretzki left Pluristem when its founders' shares were acquired for $2 million. He reportedly received a few hundred thousand dollars for his stake.
Yenni's business is a kind of barometer of the mood on the TASE. After a period when he avoided merging stock market shells with biomed companies because the market was wary of their business, he has returned to this field, specifically to the sub-field of stem cells, which has attracted considerable public attention lately.
Israeli stem cell companies with stock market exposure include Gamida Cell Ltd. (in which Elbit Medical Technologies Ltd. (TASE:EMTC) owns 30% and Clal Biotechnology Industries Ltd. (TASE: CBI) owns 20%), Pluristem, Cellcure Neurosciences Ltd. (controlled by Hadasit Bio Holdings Ltd. (TASE:HDST) and which has a agreement with Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)) and Brainstorm Cell Therapeutics Ltd. (Bulletin Board:BCLI).
Private stem cell companies include a consortium founded by Pontifax Fund, Roche Holding AG (SWX: ROG), and the Office of the Chief Scientist, the Israeli Cord Blood Bank., and BioGenCell Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2011
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