ThermoGenesis Corp., a medical equipment firm based in Rancho Cordova, said Tuesday it would merge with a Los Angeles firm that also works in the stem cell industry.
The headquarters for the combined company will be in Rancho Cordova.
ThermoGenesis, which develops technologies for the processing and storage of stem cells, said it will issue nearly 12.5 million shares of common stock to Los Angeles-based TotipotentRx Corp., a privately held firm that specializes in developing cell-based therapies in the field of regenerative medicine.
The stock being used in the deal has a value of about $18.6 million based on ThermoGenesis' closing price of $1.49 a share Monday on Nasdaq.
The merger has been approved by the boards of both companies.
Officials said the combined company is expected to be named Cesca Therapeutics, short for Clinical Excellence in Stem Cell Applications, with shares trading on the Nasdaq under ThermoGenesis' current ticker symbol KOOL.
While the new firm will be based in Rancho Cordova, TotipotentRx also will maintain its current offices. The deal is subject to regulatory and shareholder approval, and is expected to close in the fourth quarter of this year.
"This merger is transformative," said Matthew Plavan, CEO of ThermoGenesis. "Our best-in-class products will give health care providers the ability to consistently execute every step of the cell therapy treatment process, at the patient's bedside, in less than an hour and at a fraction of the cost of typical cell therapy models."
TotipotentRx is the exclusive provider of cell-based products and services to the international Fortis Healthcare, the Delhi, India-based operator of hospitals throughout Asia.
That is reflected in the makeup of TotipotentRx, which has relatively few employees in Los Angeles, but about 50 in offices in Haryana, India.
Currently, ThermoGenesis employs about 75.
Plavan said any integration of workers and jobs will be discussed in the future.
He noted that the two companies "have a long history together as partners, and we look forward to pursuing our commercial endeavors together and bringing new therapies to the market."
TotipotentRx has eight autologous cell therapies in various stages of clinical development. They target treatment of osteoarthritis, avascular necrosis, acute myocardial infarction and critical limb ischemia (a severe blockage in the arteries of the lower extremities).
"Regenerative medicine is one of the fastest-growing areas of modern medicine and is widely expected to become a major component of our future global health care system," said Kenneth Harris, chairman and CEO of TotipotentRx.
He added, "Key to being a leader in this market is the ability to provide safe, effective, point-of-care therapy that works for the patient, physician and hospital provider."
Plavan will serve as CEO of the proposed Cesca Therapeutics, and Harris will be president. Harris also will join the board of the directors of the new company.
Call The Bee's Mark Glover, (916) 321-1184.