Gamida Restructures Under Ownership of Highbridge Capital Management
29 Mar 2024
Cell TherapyDrug ApprovalImmunotherapyAcquisition
Pictured: 3D illustration of arrows reflecting changes in direction/iStock/Olivier Le Moal
Despite having an FDA-approved product, Gamida Cell is entering into a restructuring agreement in which it will become a private company under the ownership of Highbridge Capital Management amid financial struggles, the company announced Wednesday.
Under the agreement, Gamida Cell will become a private company wholly owned by Highbridge Capital Management—the biotech’s principal lender. The move is designed to give the company some long-term runway and support the commercialization of Omisirge, an FDA-approved nicotinamide modified allogeneic hematopoietic progenitor cell therapy. This comes after the biotech announced in January that it was seeking “strategic alternatives” and was focused on an asset sale, merger, or other deal.
“In March 2023, Gamida Cell embarked on an extensive strategic process to address its capital structure and liquidity constraints by partnering Omisirge with a third party,” Gamida Cell CEO Abbey Jenkins said in Wednesday’s statement. “Unfortunately, that process did not yield any actionable alternatives. This restructuring will enable Gamida Cell to remain a going concern. It will support our ongoing efforts to make Omisirge available to more transplant centers and their patients as a potentially lifesaving donor source option.”
The terms of the restructuring will see Highbridge convert $75 million of its existing unsecured convertible senior note into equity for Gamida Cell. The biotech will also get $30 million of new capital from Highbridge when the restructuring goes into effect.
The biotech will now be off the stock market and wholly owned by Highbridge, with all ordinary shares expected to be canceled. The reorganized Gamida Cell will also issue contingent value rights with a maximum value of $27.5 million to shareholders.
Gamida Cell’s main product, Omisirge, was approved by the FDA in April 2023 after a lengthy regulatory road and is indicated for patients who are scheduled to undergo umbilical cord blood transplantation after chemotherapy or radiotherapy. However, the therapy does come with a boxed warning for potentially fatal conditions such as infusion reactions, graft failure, engraftment syndrome, and graft-versus-host disease.
The company revealed in a third-quarter report in 2023 that 17 transplant centers were onboarded to provide Omisirge to patients, exceeding the company’s target of 10 to 15. However, the company said that it would continue to have a “lean launch effort” in 2024 due to “resource constraints” and—contingent on additional funding to extend its cash runway—would plan to onboard at least 40 transplant centers by the end of this year.
“Despite Gamida Cell’s financial struggles, we believe in the potential of Omisirge to fulfill an important unmet need in stem cell transplant,” Jonathan Segal, co-chief investment officer at Highbridge Capital Management, said in a statement. “Subject to an approved budget from the Company’s new board of directors, we intend to provide the Company with additional capital to fund this potentially life-saving therapy.”
The deal is expected to close in the second quarter of 2024 upon being approved by an Israeli court.
Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.
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