Athersys Inc. said Monday that it intends to sell common stock and warrants in a public offering to raise operating capital as it pursues licensing and other business development opportunities for its proprietary technology.
For months, the Cleveland-based regenerative medicine company has been restructuring its operations and trying to raise the cash it needs to complete the testing and commercialization of its adult stem cell therapy, MultiStem.
In August, Athersys agreed to sell up to $12 million in stock, stock equivalents and warrants (rights to purchase Athersys shares at a specific price and on a specific date) to an unnamed "healthcare-focused U.S. institutional investor."
The securities sale closed on Aug. 17 and netted about $11 million for Athersys, according to a regulatory filing. At the time, Athersys said it would use the money "for general corporate purposes."
A month later, the cash-strapped startup said it had amended its security purchase agreement with the unnamed investor to extend the exercise period of the warrants to seven years from five, among other changes.
In return, Athersys said it would issue additional warrants to the same investor that could be worth up to $12.8 million, if exercised.
The amended agreement "provides more financial flexibility going forward as well as a commitment for the investor... to participate in future financings, if requested," Athersys CEO Daniel Camardo said at the time.
In June, Athersys embarked on a financial and operational restructuring to lower its cost and conserve cash while completing the testing and commercialization of MultiStem to treat certain stroke patients.
And in late August, Athersys did a reverse stock split that combined 25 of its shares into one share so that it could meet the $1-per-share minimum bid price requirement of the Nasdaq Stock Market.
Shares of Athersys (Nasdaq: ATHX) fell 8.9% to $2.26 on Monday. The company made its stock sale announcement after the market closed for the day.
