Israeli company Cellect Biotechnology Ltd. (TASE: CLBD), which is developing a method for selection of stem cells, has submitted a prospectus for an offering of shares in the US as part of its plan for dual listing on Nasdaq and the Tel Aviv Stock Exchange (TASE). The company's current market cap is NIS 130 million, following a 22% rise in its share price over the past year. The company plans to raise up to $10 million by listing its shares for trading as American depository shares (ADS) following the offering. Rodman and Renshaw is the leading underwriter, and Chardan is the secondary underwriter.
Cellect is developing technology for separating stem cells from other cells in a sample of cells. The density of stem cells is a significant parameter in their use in treatment. As a first step, the company decided to develop a shelf kit for selecting white stem cells for treatment of blood cancer, and to demonstrate its viability as an independent product.
The company will offer hospitals a kit of cells that have already undergone selection and improvement. Cellect plans to begin clinical trials for its product in the coming months, while at the same time meeting with the US Food and Drug Administration (FDA) to find out what the track is for the product's planned registration. The product will probably be registered on a combined drug-medical device track. The company estimates that reaching the market, including clinical trials with several hundred subjects, will take 3-5 years. The purpose of the trials is to show that after selection using Cellect's technology, the stems cells for treating blood cancer are more effective and less toxic than stem cells selected using the existing technologies.
The company also hopes to sign cooperation agreements that will enable companies working in the stem cell field to use its technology. No such agreements have been signed yet, but agreements have been part of the company's business plan from the beginning. Cellect, which lost NIS 10.1 million in 2015 (the prospectus is in shekels, even though the offering is in the US) and NIS 5.5 million in 2014, has no revenue. As of March 31, 2016, it had NIS 15.4 million in cash.
Biotech entrepreneur Dr. Shai Yarkoni founded Cellect, together with investor and entrepreneur Nuriel Chirich Kasbian, one of the founders of the Tanzanian government television channel and two cellular networks in the country. Kasbian is honorary Tanzanian consul in Israel. Kasbian owns 20% of the company, Yarkoni 18%, and Dr. Nadir Askenazy, the inventor of the technology, 17%. The company has no major shareholders other than the founders.
The Nasdaq offerings market is currently choosy where biotech companies are concerned. Offerings have taken place in recent months, even in large amounts, but not at the pace that prevailed in 2014-2015. Four biomed IPOs were held in July, and six in June. Most of these were small, amounting to less than $100 million. Performance in these offerings was mixed.
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2016
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