Synergistic Products Expand Customer Base, Bring $5 Million in Annual Sales
Cytomedix, Inc. (NYSE Amex:GTF) (the "Company"), a leading developer of biologically active regenerative therapies for wound care, inflammation and angiogenesis, today announced the closing of an agreement with Sorin Group (Milan: SORN) ("Sorin"), a global leader in the treatment of cardiovascular diseases, to acquire the Angel® Whole Blood Separation System ("Angel") and activAT® Autologous Thrombin Processing Kit ("activAT") for $7 million in cash, to be paid in installments over the next two and one-half years. Together these products had sales of approximately $5 million in 2009, of which over 90% were from high-margin, single-use disposable products.
The Company also announced that it has raised gross proceeds of $3.65 million in a private placement of securities with both new and existing stockholders. Under the terms of the private placement, Cytomedix issued 3,650 shares of a $1,000 stated value preferred stock that is convertible into the Company's common stock at $0.44 per share and carries a 10% annual dividend to be paid quarterly in cash or common stock at the Company's option. In addition, the Company issued 4,128,631 warrants to purchase its common stock, exercisable at $0.54 per share. The warrants are exercisable immediately and expire on April 9, 2015. The proceeds from this private placement are being used to fund the Sorin asset purchase and for general corporate and working capital purposes.
"This highly accretive transaction with Sorin is transformational for Cytomedix, and reflects our strategic commitment to build a growing franchise of biologically active regenerative therapies," said Martin Rosendale, Chief Executive Officer of Cytomedix. "Angel and activAT are excellent additions to our PRP portfolio and have a business model that mirrors our own. We know this technology well, and these products will provide us with immediate access to surgical markets with proven products whose prospects, we believe, will be significantly enhanced by Cytomedix's focused clinical and scientific marketing approach."
"In addition to providing us with an established revenue stream, we believe these products will be complementary to the AutoloGel™ System, our FDA-cleared device for the production of PRP gel derived from the patient's own blood that is used for the management of a variety of exuding wounds. This acquisition is also synergistic with our planned efforts to expand our presence in the orthopedic surgery market and has the potential to enhance our efforts to secure U.S. reimbursement for the AutoloGel system," continued Mr. Rosendale. "We are delighted now to have best-in-class products for the surgical suite, and a best-in-class product for wound healing."
Used primarily in operating rooms, the Angel Whole Blood Separation System consists of a blood processing device and disposable products used for separation of whole blood into red cells, platelet poor plasma and platelet rich plasma ("PRP"). The Angel System processes a determined volume of anticoagulated whole blood from a patient and separates it so that these autologous components are then available for clinical use. The Angel System received market clearance from the U.S. Food and Drug Administration ("FDA") in August 2005. Sales of the Angel device and disposables for 2009 were approximately $4.8 million (over 90% in the U.S.), representing an increase of approximately 7% over 2008 sales. The activAT Autologous Thrombin Processing Kit is designed to produce autologous thrombin serum from platelet poor plasma. The activAT kit is sold exclusively in Europe and Canada, where it provides a completely autologous, safe alternative to bovine-derived products. Sales of this product were approximately $0.2 million in 2009.
Michel Darnaud, President, Cardiopulmonary Business Unit and Intercontinental, Sorin Group, stated, "We are pleased to enter into an agreement to sell these non-core assets to Cytomedix, and we count on Cytomedix to maintain the same high level of customer service, support and product excellence that our customers have come to expect from Sorin."
Under the asset purchase agreement, Cytomedix will acquire, among other things, all rights to the Angel and activAT products, including related trademarks, patents, intellectual property, product inventory and other related assets. In addition, Sorin will provide certain support and services to facilitate the transition contemplated under the agreements with Cytomedix. Cytomedix expects to add additional personnel to its sales infrastructure in the coming year. Cytomedix's current eight-person sales team will provide sales and marketing support for the Angel and activAT products, while maintaining focus on the AutoloGel System.
Maxim Group LLC served as financial advisor to Cytomedix on this transaction.
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