Ocata bought by Astellas of Japan: initial perspectives on end of an era

AstellasBombshell news in the stem cell field as Ocata Therapeutics (OCAT; formerly Advanced Cell Technology or ACT) is reportedly to be acquired by Astellas Pharma, Inc.

The offer for purchase of OCAT will be $8.50/share or almost $380 million. For more details see this detailed PDF from Astellas.

This quote on the deal form Ocata:

“Paul Wotton, Ph.D., President and CEO, Ocata said, “I am impressed by the vision and commitment of Astellas and believe that with their global resources behind our regenerative platform, patients suffering from debilitating diseases like AMD and SMD will soon benefit from having access to regenerative medicine.”

What will this mean for the scientists at Ocata?

What role might Dr. Robert Lanza, CSO of Ocata, play after the deal?

Ocata was founded 21 years ago as ACT and despite the recent name change to Ocata, it has largely been the same company. With the purchase by Astellas, that era is over and so begins a new one.

My initial reaction is that this isn’t reflective of the full value of Ocata. It’s disappointing and creates uncertainty about the future of Ocata’s pipeline.

At the same time I’ve had this feeling for quite some time that Ocata would be acquired in coming years at some point. That time is now and a bit sooner than I had thought.

Over at Investor Stem Cell, which heavily covers Ocata, the reaction has been negative to the deal.

Note: I have a very small, long-term position in OCAT.

7 thoughts on “Ocata bought by Astellas of Japan: initial perspectives on end of an era

  1. In one way, this is, of course, so disappointing. (I have a small investment in Ocata too. Not quite as small as that, but not a whole lot bigger.) And yet… and yet, I’ve been saying the same thing all along. And to my surprise, I really do mean it. I would have liked to make money just as much as anybody else. But what matters to me more than anything else is the CURE. The most concerning thing is that they’ll lose momentum and especially that Dr. Lanza won’t be involved in the same way. But when all is said and done, if the science is really supported and really does come through, that will be what really matters.

  2. Success is what everyone wants, patients, the stem cell community and investors. All will benefit from demonstration of clinical efficacy but in the long run it will need Phase 3s and supporting R&D programs to create a real multiple on investments – and this is where Astellas will come in. I doubt that Astellas will rock the boat any by changing the setup and Lanza will surely have an attractive package to stay.

    My guess is that Astellas will acquire other retinal stem cell companies with good IP and strong data to close out the competition. Given their overall position now, Ocata shares are undervalued – yesterday they were about right.

  3. I am happy for Lanza and the science (“wholly owned subsidiary of Astellas”), sad for the long-term investors who trusted the many times management, including Wotton said they planned to “go it alone” for the eye, “unless someone wanted to write them a big check.” Most shareholders do NOT believe $388 million is anywhere near a big enough check for the science, especially MSCs. That said, OCAT’s pipeline fits in nicely with Astellas’ interests, urology, nephrology, immunology and cancer. The Tufts trials probably got their attention big time. I do feel badly for the longs; fortunately I will make a small profit, in nearly 4 years, but the really longs of 7-10 years are way under water and they got screwed without so much as a kiss (completely dissed by new management).

  4. My bet is the trials are finished. Astellas bought the IP not the trials. The trials were likely failing anyway. SMD was a dud. AMD an enrollment mess and we never did get the final P1 results from either trial. If the results were so good then where is the final data? Why would anybody sell if the AMD trial was a “miracle: as Lanza famously claimed? Simple conclusion is they aren’t miraculous.

  5. As of last night, the uniting OCATA shareholders easily have enough shares, (as long as they stay committed to not tendering their shares), to prevent a short form merger. The buyer does not have the rquired 90% of shares needed. If the retail and institutional investors band together they easily have over 50.1% of the shares. This is getting interesting.

Leave a Reply