Funded by internal resources, the strategic alliance between Cordlife and CRC was incepted in 2010 to provide an umbilical cord lining (UCL) banking service leveraging on CRC’s technology for harvesting stem cells from the amniotic membrane of the umbilical cord.
Gavin Tan, CEO of CRC observed: “Since 2010, our strategic alliance with Cordlife has grown from strength to strength. We are delighted with this latest development as it narrows the gap between the banking of umbilical cord lining stem cells and their broader therapeutic uses.”
Tan added, “Together with Cordlife and our clinical development partners, we are accelerating the development of the Global Cord Registry and CRC’s stem cell technology to benefit patients, customers and the broader medical community.”
According to Cordlife, the nature of the investment is a subscription for a Class A redeemable convertible note (RCN) maturing three years from the issue date in the principal amount of S$4.2 million (US$2.95 million) from CRC. For this note, the yielding interest is at a rate of three month SIBOR plus 7 per cent per annum, payable annually in arrears.
In addition, Cordlife will purchase 4,167,858 ordinary shares in CRC for a consideration of S$4.2 million. An adjustment mechanism will enable Cordlife to, among others, either receive additional ordinary shares in CRC or sell the shares back to CRC shareholders at a price of the consideration plus 7 per cent of the consideration compounded over 3 years. This will occur if a net profit target is not met for the year ending 31 December 2018.
The proceeds from the RCN will be primarily used to accelerate the clinical development of the advanced wound healing technology, significant enhancing the value proposition of Cordlife’s UCL banking service in existing markets across the region. Currently, Cordlife caters to customers from India, Hong Kong, Singapore, Thailand, Philippines, Malaysia, Indonesia and China.
This follows CRC establishing a research partnership with the University of Colorado School of Medicine and ClinImmune Labs in June 2015. The objective of this is to embark on US FDA approved trials for the treatment of diabetic wounds using UCL stem cells.
Jeremy Yee, executive director and CEO of Cordlife, said, “This investment not only aligns the strategic interest between Cordlife and CRC, but also significantly enhances Cordlife’s clinical and quality assurance capacity as we are able to leverage on reputable research institutions and top-notch research facilities.”
Yee also noted that it would position Cordlife to contribute to the clinical development of CRC’s wound healing technology, as this would enable further validation and strengthening of Cordlife’s core business activities, as well as capitalise on growth opportunities in the cord blood and cord lining banking market.