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Cleveland-based Athersys Inc. and Japan’s Healios K.K. are expanding their existing development and commercialization collaboration, bulking up the investment and broadening the MultiStem product license ahead of studies in Japan, Europe and North America.

The new agreement, building on the one established in 2016, will fund a TREASURE study of MultiStem, Athersys’ proprietary stem cell treatment, in Japan. It will also provide Healios the option for its development and commercialization in China. It also includes a provision of capital to Athersys for support of its MASTERS-2 Phase 3 stroke study in North America and Europe.

“This is a significant opportunity for both Healios and Athersys,” Dr. Gil Van Bokkelen, CEO of Athersys, said in a statement. “It provides for a meaningful expansion of the existing partnership, providing a much broader scope of rights for Healios, while providing Athersys with substantial additional capital and a committed development partner in key areas.”

Here’s the funding breakdown:

  • Healios is making a $21 million equity investment in Athersys at $1.76 per share — about 12 million shares of common stock. It has the option to buy more before September 2020, subject to conditions and restrictions.
  • In exchange for the option to license and develop MultiStem in China, Athersys would receive $35 million, as well as milestones and royalties. If Healios takes up the option for a license in China, it would pay Athersys license fees, milestone payments and escalating royalties or profit sharing for each indication.
  • Healios will also pay $25 million in license/option fees, in installments, an obligation that can’t be terminated and is nonrefundable, but can be used as credit against certain milestone payments due under the MultiStem license in Japan.

Here’s the licensing breakdown:

  • Athersys expands Healios’ license to develop MultiStem products for specific indications in Japan and others globally.
  • Healios gets an exclusive license option to develop and commercialize MultiStem products in China, again for specific applications.

The existing collaboration should be completed by April 30, 2018. As part of Healios’ equity investment, Dr. Hardy Kagimoto, CEO of Healios, would be nominated for election to the Athersys board at the next scheduled shareholders meeting in June. “Through this meaningful expansion of our relationship with Athersys, we aim to leverage MultiStem to accelerate the practical application of regenerative medicine across a variety of unmet patient needs,” Dr. Kagimoto said in a statement. “We are delighted to be working even more closely with them in this regard.”

The studies:

  • In Japan, Healios is conducting the TREASURE study, evaluating MultiStem therapy for ischemic stroke, and has received a priority review designation under Sakigake from Japan’s Pharmaceutical and Medical Devices Agency. The TREASURE study, designed to enroll 220 subjects, is being conducted at hospitals in Japan that have extensive experience at providing care for stroke victims.
  • Athersys is preparing to launch in North America and Europe its Phase 3 registration study, entitled MASTERS-2, which has received special protocol assessment, Fast Track and RMAT designations from the FDA and a Final Scientific Advice positive opinion from the European Medicines Agency.