StemCells Inc. (NASDAQ: STEM) and Microbot have agreed to merge. The deal marks the conclusion of StemCells’ search for strategic alternatives as it will provide the company with a financial lifeline.
Though the financial terms of the merge weren’t properly disclosed, Microbot is expected to inject $4 million into StemCells. With that, StemCells should have adequate funds to finance its operations for at least the next 18 months after the merger deal closes.
Termination of clinical trial – StemCells Inc. (NASDAQ: STEM)
StemCells Inc. (NASDAQ: STEM)’s merger with Microbot comes at a time when the company was planning to wind down due to shortage of financial resources. Plans to wind down StemCells also came after the company announcing the termination of a Phase 2 trial of human neural stem cells. The trial failed to yield favorable results.
What comes after the merger?
StemCells is in the business of developing stem cell platforms for treatment of diseases that affect the central nervous system. On the other hand, Microbot is engaged in developing robotic medical devices. As such, the merger will open up an opportunity for the companies to bring their unique capabilities together so that they can develop better robotics medical devices that can be used in the treatment of cerebrospinal fluid and gastrointestinal diseases among others.
Resignation of officers and directors
As StemCells Inc. (NASDAQ: STEM) merges with Microbot, a number of its top executives and directors are stepping down. The company revealed in regulatory filings that Ian Massey is stepping down as CEO, while Gregory Schiffman is exiting as CFO. StemCells further said that three directors are leaving its board.
The company tried to explain that the exit of the officers and directors has nothing to do with any disagreements regarding its merger with Microbot. CEO Massey will get $216,667 in one-time payments and Schiffman will also get $187,500 in one-time payment.
StemCells Inc. (NASDAQ: STEM) has promoted Kenneth Stratton to the position of interim president following the mass resignation of the company’s officers and directors.