Japanese drugmaker Astellas Pharma Inc. has agreed to invest about $10 million in Cytori Therapeutics Inc. as part of an agreement to evaluate the use of stem and regenerative cells for treating serious illnesses.

Astellas will pay $7 per share for 1.43 million shares of Cytori stock, a 35 percent premium over Cytori’s closing price of $5.20 on Monday.

The news sent Cytori shares up 89 cents, or 17 percent, to $6.09 in pre-market trading on Tuesday.

Cytori said it expects to get net proceeds of $10 million on the investment in a deal expected to close Dec. 13.

Cytori, which is based in San Diego, makes products that are used in adult stem cell harvesting and research.

The equity agreement is aimed at allowing the two companies to evaluate the use of adipose derived stem and regenerative cells for treating serious illnesses for which there is no fundamental treatment.

The companies said they will explore a collaboration for an advanced regenerative drug technology.

Cytori also granted Astellas a 2-year right of first refusal for a worldwide research, development and commercialization partnership using Cytori’s products and technologies in the treatment of liver disease. Astellas will also get a non-voting observer seat on Cytori’s board and will participate in a newly formed scientific advisory board.

Date: December 7, 2010
Source: Associated Press