Stem Cell Biotech Advanced Cell Technology (ACT) gets $35 million funding deal raising optimism

ACTCAdvanced Cell Technology (ACT; stock symbol ACTC) announced that it has secured $35 million in funding from investment company, Lincoln Park Capital. The press release quotes CEO Gary Rabin:

“We are most pleased about this financing agreement, as it has a number of notable benefits for the company,” commented Gary Rabin, chairman and CEO of ACT. “Lincoln Park Capital is an excellent partner for us with a great track record and a long-term commitment to the life sciences field. This transaction offers the Company a very cost efficient and readily available form of financing. The $35 million available under the agreement equates to more than two years of funding for the Company, even assuming no other sources of capital. It was a priority for us to complete a new financing by year-end, as we never again want to be in a position to have to go looking for capital from a position of distress or weakness. This agreement strengthens our balance sheet allowing us to focus on advancing our clinical programs, pursuing strategic partnerships, and other long-term objectives.”

ACT is well-into combined Phase I/II FDA-approved clinical trials for its RPE human ES cell-based treatment for two forms of macular degeneration, the most common cause of blindness.

This new, large amount of funding provides stability for ACT heading deep into the clinical trials process.

To date, encouragingly, the ACT trials have reported no adverse outcomes, the primary evaluative goal for early clinical trials.

I’m confident that ACT will complete these trials. I’m hoping, although of course one never knows, that ultimately their stem cell-based product will prove effective for treating vision impairment.

Exactly what the future holds for ACT remains hard to predict, but there are (unsubstantiated) rumors in the stem cell field that it’s a takeover target by a large pharma company. This influx of cash over the next few years, in my opinion, makes that more likely. One outstanding issue is the multi-billion number of shares of ACT stock out there making some predict a large reverse split in the company’s near future.

Big pharma companies are getting more and more interested in stem cell research. They are developing programs of their own, but one might image that they would be interested in already existing, promising stem cell programs such as those of ACT.

Disclosure: I currently hold no shares in ACT and don’t have an immediate plans to purchase any. I am not a financial advisor. Investors should consult an advisor before making financial decisions.

4 Comments


      • A reverse split of between 20-1 and 80-1 is to be done in conjunction with an uplisting to the NASDAQ. To uplist there is a minimum per share price that must be met. This, along with a desire to get the number of shares to a more desirable amount, is the reason for the reverse split. In this case, the reverse split is a very good thing. The actual ratio will depend in part on the pps at the time of the r/s and the minimum pps to uplist.

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