Cytori In Up To $531 Mln. Licensing Deal With Lorem Vascular; Stock Soars

(RTTNews) - Cytori Therapeutics (CYTX) and Lorem Vascular on Monday announced a partnership to commercialize Cytori Cell Therapy for the cardiovascular, renal and diabetes markets in China, Hong Kong, Malaysia, Singapore and Australia.

As per the terms, Lorem Vascular committed to pay up to $531 million in license fees, opening product purchase commitments and Cytori equity purchases.

Cytori Cell Therapy is derived from the company's Celution System, which enables access to a patient's own adipose-derived regenerative cells at the point-of-care.

Lorem Vascular will pay up to $500 million in fees for a 30-year exclusive license to Cytori Cell Therapy for all indications, excepting alopecia and aesthetics, in the licensed territories in the form of revenue milestones. In addition, Lorem Vascular agrees to purchase the Cytori Celution System and consumables under a product supply agreement.

Cytori will receive $24 million in exchange for 8 million shares of Cytori common stock at $3.00 per share. Equity purchased will be closed in two installments; a $12 million payment that will be paid within 7 days and a second $12 million payment that will be made within 60 days.

In addition, Lorem Vascular will order $7 million in Celution devices and consumables with a $2 million order placed immediately and a $5 million order to be placed following regulatory approval in China.

Lorem and Cytori have implemented a regulatory plan in China and anticipate approval in 2014.

More than 230 million Chinese have a form of Cardiovascular Disease which is the country's leading cause of death, accounting for more than 40% of all deaths, or three million people per year. The growing worldwide prevalence of diabetes is one of the contributing factors to increasing rates of vascular diseases, as they are common co-morbidities of diabetes.

Cytori stock closed Monday at $2.09, up $0.03 or 1.46%, on a volume of 750 thousand shares on the Nasdaq. In after hours, the stock gained $0.86 or 41.15% at 2.95.