Fibrocell Science Inc., an Exton gene-therapy company that raised over $100 million from investors with high hopes, has cut a deal to be purchased by Castle Creek Pharmaceutical Holdings LLC, of Parsippany, N.J., for $3 a share, or $30 million, plus $33 million to pay its debts.
The stock, which traded at nearly $100 in 2015, had lately traded below $2 as investors tired of waiting for sales and profits. John Maslowski, Fibrocell’s chief executive, said in a statement the sale would be best “for both shareholders and patients.”
The stock rose about 60 percent on Friday from $1.71 to $2.92, closing near the $3 a share Castle Creek has offered.
Both Fibrocell and Castle Creek concentrate on FDA-designated “orphan diseases,” genetic conditions affecting relatively small groups of people, which can be fast-tracked for regulatory approval, generating the promise of high profits since developers tend to face little competition.
Fibrocell in April had signed a deal with Castle Creek, a unit of Chicago-based Paragon Biosciences, to pay Fibrocell and partner Intrexon Corp., of Germantown, Md., up to $135 million for licensing, developing, and producing Fibrocell’s gene-therapy candidate FCX-007, for the treatment of recessive dystrophic epidermolysis bullosa, a genetic condition leading to sores, scarring, skin cancer, and vision loss for up to 2,500 Americans. There is no cure.
At the time, Maslowski said the payments would free Fibrocell to develop another therapy, FCX-013, for scleroderma, a tissue-hardening condition that affects about 90,000 Americans.
Castle Creek says work will continue on both therapies.
Founded as Isolagen Inc. in 1993 to develop wrinkle creams, the company filed for bankruptcy reorganization after the 2008 financial crisis made it tough to raise capital. In 2009, the company sold shares in an initial public offering, adopting the name Fibrocell. The company peaked at more than 70 workers in 2013, but shrank to fewer than 20 by last year, as sales and profits failed to materialize.
Working together on the bullosa therapy "caused us to quickly realize that Castle Creek and Fibrocell could achieve even greater synergies by combining the companies into one,” said Greg Wujek, CEO of Castle Creek Pharmaceuticals, in a statement. The group now has "the potential to develop multiple promising new therapies.”
Castle Creek’s product candidates include CCP-020, an ointment it is developing for another condition, epidermolysis bullosa simplex, which causes skin to be easily blistered.