Celgene Corporation (NASDAQ:CELG) has made a deal to purchase $45 million worth of Mesoblast’s shares.
The top dollar buy off was a strategy for Celgene so that it can gain access to Mesoblast’s stem cell pipeline. The move was also a strategy for Celgene towards achieving an advantage as well as competitive edge by following up with a licensing deal.
The company reportedly made the deal for 15 million shares, with a price of $3.82 per share. It expects to benefit from returns from a group of stem cell programs that ranges from oncologic diseases, inflammatory bowel diseases, organ transplant rejection, and a few others.
Upon the news of the new highly acclaimed partnership, Mesoblast’s shares are reported to have increased in value by more than 20 percent.
The need to create solutions for medical situations that people face, led to a rapid rise in Stem cell research and development popularity. The method rose to fame within the first ten years of the 21st century. However, the high momentum had to be cooled off upon realization of how extensive and time taking the process of completely figuring out stem cells would be. It has therefore led to a lot of layoffs and wavering faith in the process. Despite the negatives, stem cells have a promising future in the biotech field.
Almost two years ago, Osiris Therapeutics, Inc. (NASDAQ:OSIR) divested Prochymal (its product) as well as its Mesenchymal Stem cell platform to Mesoblast. This was after Sanofi SA (ADR)(NYSE:SNY) turned down a $1.25 billion deal.
Celgene has had a few biotech contracts in the last few years. They are aimed at strategically giving the company a major advantageous position especially in its research and development endeavors.
The company also has an agreement with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) which has rights from Japanese authority to the mesenchymal stem cell technology.
The new agreement provides a prospect for Celgene to supplement its cellular regenerative medicine pipeline.