Phase 3 Medical to acquire adult stem cell collector NeoStem

By E. Janene Geiss

Philadelphia, Dec. 7 - Phase 3 Medical, Inc. said Wednesday that it has signed a definitive agreement to acquire NeoStem, Inc., a company that specializes in the collection and storage of adult stem cells.

Under the terms of the agreement, Phase 3 will purchase all the assets, properties and rights of NeoStem that relate to its adult stem cell collection and storage business and assume certain of its liabilities in exchange for the issuance of 5 million shares of the company's common stock, according to a company news release. Phase 3 stock closed a $0.07 Wednesday, up $0.04 on the day.

NeoStem operates a commercial autologous adult stem cell bank and is pioneering the pre-disease collection, processing and storage of adult stem cells for present and future medical treatment. The adult stem cell industry is a field independent of embryonic stem cell research, officials said.

The company's objective is to be the leading provider of adult stem cells for therapeutic use. Following the acquisition, the business of NeoStem will become the company's primary business and it will utilize the combined management team and advisors to grow and expand the company, officials said.

"Emerging therapies involving one's own adult stem cells are expected to grow rapidly as regenerative medicine revolutionizes treatment options in the 21st century. As a pioneer in the autologous adult stem cell collection and banking arena, NeoStem has an advantage that we believe can propel us to leadership in this new medical field," Robin Smith, chair of the Phase 3 board of advisors, said in the release.

Phase 3 plans to capitalize on the increasing importance the company believes adult stem cells will play in the future of regenerative medicine. The use of adult stem cells as a treatment option for those who develop heart disease, certain types of cancer and other critical health problems is a burgeoning area of clinical research today, officials said.

Phase 3 Medical, based in Melville, N.Y., provides business capital and guidance to companies in multiple sectors of the health care and life science industries in return for a percentage of revenues, royalty fees, licensing fees and other product sales of the target companies.

After the acquisition, the company said it hopes to become an international leader in the adult stem cell field.

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