A Pittsburgh biotech firm has announced it plans to acquire a Flagstaff, Arizona-based regenerative medicine peer as part of a deal worth at least $65 million.
Carmell Therapeutics Corp., based in the South Side, said it plans to have Axolotl Biologix operate as a wholly-owned subsidiary of Carmell should the deal meet regulatory approvals and other conditions.
If approved, Axolotl shareholders will get $65 million, structured as $8 million in cash and $57 million in Carmell (NASDAQ: CTCX) stock. And should certain revenue and business milestones be met 12 months after the close of the deal, Axolotl shareholders can expect to receive up to $75 million in milestone equity payments, with 12% of those payments being made available in cash while the other 88% would come in the form of Carmell stock.
Additionally and following the closing of the deal, all full-time Axolotl employees are expected to join Carmell except for Axolotl CEO Josh Sandberg, who will serve as a strategic advisor to Carmell Executive Chairman Rajiv Shukla.
"I look forward to working with Josh and the Axolotl team to accelerate our goal of building Carmell into an Industry-leading regenerative medicine company through a combination of in-house product development, bolt-on acquisitions and business development aimed at aesthetics/soft tissue and orthopedic indications," Shukla said in a prepared statement.
Since the announcement of the acquisition plans, the share price of Carmell has jumped by about 40% in intraday trading to $4.20 per share, up from the prior day's close of $3 per share.
Carmell's plasma-based bioactive materials are capable of delivering medicines that can quickly heal bones or tissues that have been injured due to fractures or severe wounds. Its acquisition of Axolotl is poised to build on that given that the Arizona company develops and sells active soft tissue repair products.
Last January, Carmell announced plans to go public via the merger with a special purpose acquisition company as part of a deal valued at $328 million. Carmell went public on July 17, ending the day's close at $9.74 per share.
