Tuesday, May 31, 2016

StemCells, Inc., 'Winding Down' Its Business; Shareholders Could Be Left in Cold

StemCells, Inc., a publicly traded firm that once held close ties to the $3 billion California stem cell agency, this morning said that it was going to close its doors and that its shareholders may not receive a dime in the liquidation.

The announcement was buried deep in a press release focusing largely on the termination of the firm's spinal cord injury trial, which the California company said was not showing sufficient benefit to patients to continue. The news release continued,
"The company also announced that, in light of the decision to terminate the Pathway Study, the company’s available strategic alternatives and its current cash position, the board of directors approved a plan to wind down the company.  As part of this process, the company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.
"As of May 31, 2016, the company had cash and cash equivalents of approximately $5.5 million. The company cannot determine with certainty the amount of any liquidating distribution to its stockholders and it is possible that there will be no liquidating distribution to stockholders. The amount of any cash distributed to its stockholders will depend upon, among other things, the company’s current liquid assets offset by its known and unknown liabilities as well as operating expenses associated with the wind down."
StemCells, Inc., was co-founded by Irv Weissman, a Stanford stem cell researcher. It was the only company to be awarded $40 million in a single round by the California stem cell agency. The awards followed vigorous lobbying by the former chairman of the agency, Bob Klein,

StemCells, Inc., also appointed Alan Trounson to its board just days after he left his post as president of the agency, triggering a controversy about conflicts of interest. 

The California Stem Cell Report will have more on the closure of StemCells, Inc., later. 
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1 comment:

  1. Exactly why state funding of business enterprises is a bad idea. Crony capitalism.