Tuesday, September 13, 2011

StemCells Inc. to Sell Real Estate to Raise Cash

StemCells Inc.'s impending bid for $20 million from the California stem cell agency is taking on greater weight as the company battles to keep its finances flowing.

Esha Day of Reuters reported today that the Newark, Ca., company, co-founded by Stanford researcher Irv Weissman and two other well-known scientists, is hoping to raise $2 million to $3 million by selling "some of its real estate and other non-core assets to buy time until it has more conclusive data from initial trials of its innovative therapy."

 StemCells Inc. is in a much different situation than its early days. Reuters said that the company is burning cash at a rate of $1.5 million a month and will run out in April without a fresh infusion. The company's stock closed at $2.52 today, a far cry from a high of $188 in 1992. The company's shares have lost nearly 80 percent of their value since the beginning of this year, Reuters said, because of skepticism about its ability to raise cash. 

Last month, the board of the $3 billion California stem cell agency awarded a $100,000 planning grant to StemCells in the first stage of the competition in a $240 million disease team round. Winners could receive up to $20 million, most likely in the case of businesses in the form of loans. (A summary of reviewer comments on the StemCells' application can be found here. The name of the firm is typically withheld by CIRM in such summaries.)

Weissman sits on the board of directors of the firm. He is also a scientific advisor to the business, along with Fred Gage of the Salk Institute and David Anderson of Caltech. Gage and Anderson were also co-founders of the firm.

Here is another take on the firm from SmallCapNetwork. Sphere: Related Content

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