Jiangsu Aosaikang Pharmaceutical to take 5% equity position in Living Cell Technologies

Jan 31 2011

Living Cell Technologies Limited (ASX: LCT; OTCQX: LVCLY), a global company pioneering the development of a cell implant therapy to treat diabetes, today announced that a binding subscription agreement has been executed in relation to share placement with Jiangsu Aosaikang Pharmaceutical Co., Ltd. (“ASK”). The proposed placement is for the issue of 14,334,080 LCT shares at A$0.12 per share, to raise A$1.72m. This represents a 5% equity stake in LCT, the funds to be received by LCT from ASK not later than 4 March 2011.

LCT will use the proceeds from the investment to fund further development and clinical trials of its breakthrough lead product DIABECELL^®, for the treatment of Type 1 diabetes.

ASK is a private research-based pharmaceutical company, based in Nanjing, China. Established in 2005, ASK develops, produces and markets pharmaceuticals and healthcare products, and has over sixty pharmaceutical products in the market place.

In addition to ASK’s investment, the companies have also agreed to negotiate a collaborative research agreement, the terms of which are proposed to include LCT granting ASK a right of first refusal to negotiate a licence to commercialise the use of DIABECELL in China and become the sole agency to implant and treat patients with DIABECELL once the product is registered in China.

LCT CEO and Managing Director Dr Ross Macdonald said: “We are very pleased to have the support of Jiangsu Aosaikang, through this investment and interest as a collaborator, reflecting the increasing attention that LCT’s work is generating from leading companies worldwide. Our relationship with ASK provides us with a highly experienced, knowledgeable local partner in a large and promising emerging market.”

LCT Chairman and Medical Director Professor Robert Elliott noted: “We are looking forward to working together with ASK as partners to research and develop DIABECELL in China. This is consistent with our strategy to seek quality organisations around the world as collaborators in the development and commercialisation of DIABECELL. ASK has a proven track record in developing and marketing innovative products and therefore understands the potential of a therapy like DIABECELL.”

ASK Chairman and CEO Dr Qingcai Chen added: “We are quite honoured to be granted with such an opportunity to establish a strategic partnership with LCT, a global leader in the treatment of Type 1 diabetes. At the same time we are also very excited by the opportunity to bring DIABECELL into China which would be great news for those patients who are suffering. Like other markets globally, Type 1 diabetes is a major disease in China, which currently has inadequate treatment options. We see DIABECELL as a significant step in offering Chinese diabetics real treatment options and improved lifestyles. More importantly, we are pleased to be working with such an innovative company as LCT.”

The transaction is expected to be completed by early March and shares issued soon after receipt of funds and subject to regulatory approval.