Israel’s Pluristem Therapeutics Inc., a developer of placenta-based cell therapy products, said Tuesday that it signed a term sheet for an investment of about $30 million from China-based Innovative Medical Management Co. for a 17 percent stake in the company.
The publicly listed Chinese company, an affiliate of Zheshang Venture Capital Co. Ltd., is active in the healthcare industry. The funds will support the Israeli company’s late-stage stem cell trials, Pluristem said in a filing to the Tel Aviv Stock Exchange.
The term sheet, which is subject to shareholders’ approval, envisages that about 16,890,000 shares of Pluristem common stock will be sold at $1.77 per share, representing a premium of 15 percent over market price. Pluristem shares closed at $1.52 on Monday on the Nasdaq, where its shares are also traded, according to data compiled by Bloomberg.
The Tel Aviv-traded shares shot up 14 percent at 2:31 p.m. in Tel Aviv, when they resumed trading after being halted for the announcement, according to TASE data.
Pluristem is entering into late stage trials for some of the applications for its patented Placental eXpanded (PLX cells), which are grown using the company’s three-dimensional expansion technology. The cell products release a range of therapeutic proteins in response to inflammation, ischemia, hematological and radiation damage, the company said in the statement.
Pluristem processes its cells from placentas from women undergoing caesarean section births. According to its researchers, the placenta contains mesenchymal-like adherent stromal cells, which have been found by researchers to have significant therapeutic potential. The cells promote tissue repair, possibly by secreting biologically active substances, including cytokines, that modulate immune response, along with factors that enhance the growth of blood vessels. These cells stimulate the body’s own mechanisms to heal damaged tissues.
Because placental cells themselves are immunoprivileged, meaning they do not elicit an immunological response from the body, as other cells do, they can be used freely for any purpose without requiring tissue-matching.
Innovative Medical Management Co., listed on the Shenzhen StockExchange since 2007, is a provider of healthcare services, hospital management and scientific research. The company owns three hospitals in China, the statement said.
Zheshang Venture Capital, which is publicly listed in China, is headquartered in Hangzhou, with offices in Beijing, Shanghai, Shenzhen, Shenyang and San Francisco.