BioTime to merge Glycosan with OrthoCyte

Feb 14 2011

BioTime, Inc. (NYSE Amex:BTX), a biotechnology company that develops and markets products in the field of stem cells and regenerative medicine, today announced it has signed a definitive agreement to merge Utah-based Glycosan BioSystems, Inc. (Glycosan) with BioTime's wholly-owned subsidiary, OrthoCyte Corporation. The acquisition is expected to close by March 18, 2011.

“The founding scientists of Glycosan have been pioneers in the field of tissue engineering”

Established in 2006, Glycosan has been a leader in developing, manufacturing, and marketing proprietary biocompatible hydrogels that mimic the extracellular matrix (ECM). The ECM is an important and complex mixture of macromolecules that holds cells together in tissues and organs and performs many other important functions. Glycosan's products have the demonstrated ability to support the growth and directed differentiation of stem cells and are designed as implantable, resorbable matrices for tissue engineering, regenerative medicine, and for research applications involving the laboratory culture of human cells. BioTime expects to utilize the technology in some future stem cell-based therapeutic products and to continue the marketing of the products for research use only.

As a result of the merger, Glycosan stockholders will receive total consideration, in the aggregate, of approximately 332,906 BioTime common shares, and warrants to purchase approximately 206,612 additional BioTime common shares at an exercise price of $10 per share. OrthoCyte will subsequently own all of Glycosan's assets, including manufacturing equipment, inventory, and technology licenses, and will assume Glycosan's obligations, which at January 31, 2011 totaled approximately $218,000.

"The founding scientists of Glycosan have been pioneers in the field of tissue engineering," said Michael D. West, Ph.D., President and Chief Executive Officer of BioTime, Inc. "The inventions of Dr. Glenn Prestwich, Presidential Professor of Medicinal Chemistry at the University of Utah combined with BioTime's stem cell technologies, give BioTime and its subsidiaries a broad manufacturing platform. Our subsidiary OrthoCyte plans to utilize this combination in the development of the therapeutic products OTX-CP03 and OTX-CP07, targeted for use in the treatment of osteoarthritis."

"By joining forces with BioTime and OrthoCyte, we hope to advance the development of technology and tissue-engineered therapeutic products," said William P. Tew, Ph.D., President and CEO of Glycosan BioSystems, Inc. "Researchers have already used our hydrogel products in animal models studying osteoarthritis, a disease that affects over 20 million people in the U.S. We look forward to continue contributing to these studies and more as part of the BioTime family of companies."

Background

Regenerative medicine refers to the development and use of therapies based on human embryonic stem (hES) cell or induced pluripotent stem (iPS) cell technology. The great scientific and public interest in regenerative medicine lies in the potential of hES and iPS cells to become all of the cell types of the human body. Many scientists therefore believe that hES and iPS cells have considerable potential as sources of new therapies for a host of currently incurable diseases such as diabetes, Parkinson's disease, heart failure, arthritis, muscular dystrophy, spinal cord injury, macular degeneration, hearing loss, liver failure, and many other disorders where cells and tissues become dysfunctional and need to be replaced.

Historically speaking, the complexity of cell types obtainable from hES and iPS cells has also been a challenge. Human therapeutic products require a high degree of purity to meet the hurdles of regulatory approval. BioTime's ACTCellerate™ technology was invented as a means of generating over 140 diverse human cell types from hES or iPS cells in a scalable and highly purified state. These diverse cell lines have applications in basic laboratory research and are being marketed for that purpose. In addition, many of the ACTCellerate cell lines may have important human therapeutic applications. Some of these therapeutic applications will require the reconstitution of cells with ECM to create the architecture of a tissue, a field known as tissue engineering.

OrthoCyte was formed in 2010 to develop cell-based therapies for the treatment of orthopedic diseases and injuries. OrthoCyte has compiled proprietary animal preclinical data on two therapeutic product candidates designated OTX-CP03 and OTX-CP07, which are tissue engineered products, formulated in Glycosan's hydrogel, and they show initial evidence of safety and efficacy in animal models of joint disease.

Dr. William P. Tew, Ph.D., Glycosan's co-founder, President and Chief Executive Officer, will become the Vice President of Business Development of OrthoCyte and is expected to become Vice President of Business Development of BioTime following the closing of the merger. Dr. Tew has extensive experience in life sciences, biopharmaceuticals, and university technology licensing. He was on the research and teaching faculty at Johns Hopkins University School of Medicine from 1979-1983, and served as Associate Provost and Assistant Dean of Technology Licensing from 2000-2004. In 1980 he founded Chesapeake Biological Laboratories, where he served as chairman and CEO for almost two decades (1981-1999), developing and manufacturing bulk pharmaceuticals, parenteral drugs, and medical devices in compliance with FDA and cGMP regulations. He also oversaw the design, validation, and operation of sterile filling and packing facilities and implemented reliable ISO quality-management systems.