Israeli stem cell treatment company Gamida Cell (Nasdaq: GMDA) has announced that Highbridge Capital Management, the company's principal lender, will convert its $75 million bond into shares, and take the company private. With a market cap of just $45 million, Gamida Cell is going through a challenging period, with its share price having lost 95% since its IPO.
Based in Jerusalem, Gamida Cell was founded in 1998 and has marketing operations in the US. Last year, the company succeeded in bringing a product to market for the first time. Omisirge shortens recovery time after stem cell transplant and reduces the rate of infection, but there have been few orders as the cash in the company's coffers runs low while it has not yet built marketing channels.
Soon after the product's launch, Gamida Cell announced it was looking for a marketing partner or a strategic alternative, in other words, to be sold or to sell the product, and had to freeze development projects in earlier stages that seemed attractive, to finance the marketing activity of the lead product.
But today Gamida Cell president and CEO Abbey Jenkins said, "In March 2023, Gamida Cell embarked on an extensive strategic process to address its capital structure and liquidity constraints by partnering Omisirge with a third party. Unfortunately, that process did not yield any actionable alternatives. This restructuring will enable Gamida Cell to remain as a going concern and will support our ongoing efforts to make Omisirge available to more transplant centers and their patients as a potentially lifesaving donor source option."
According to the agreement with Highbridge, it will inject an additional $30 million into the company, and even more if the product achieves certain milestones.
As part of the restructuring process, Gamida Cell will lay off several dozen employees, representing 25% of its workforce. The company will close down its Jerusalem development center but will continue to operate its Kiryat Gat production center.
Published by Globes, Israel business news - en.globes.co.il - on March 27, 2024.
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