Shares in StemCells (NSDQ:STEM) initially soared some 600% this week after the company initiated a reverse merger with Microbot Medical, after the failure of a Phase II trial of StemCells’ spinal cord injury treatment.
The merger also saw the resignation of CEO Ian Massey, CFO Gregory Schiffman and a trio of board members, as the team led by Microbot chairman & CEO Harel Gadot prepares to take over. Kenneth Stratton was tapped to serve as interim president, effective August 15.
The reverse merger sent STEM shares up 602.7% to a $2.60 close August 16, the day the deal was announced; the stock has since fallen partly back to earth, trading up 248.6% at $1.29 per share since the news broke in mid-afternoon trading today.
“This transaction concludes an extensive search for strategic alternatives conducted by StemCells since we failed to see robust clinical results in our Phase II clinical study of human neural stem cells in chronic spinal cord injury,” Massey said in prepared remarks. “We believe both our investors and the market at large will see the potential of Microbot’s robotics platform, specifically its catheter and shunt technologies, and will appreciate Microbot’s overall business opportunities and potential.”
“We are pleased that this transaction will give us a presence in the U.S. capital markets, and we are very excited to continue advancing the development of our proprietary technologies that we believe have the potential to improve the lives of many patients globally. We thank StemCells for its efforts and contributions to improving human health over the years,” added Gadot.
Yokneam, Israel-based Microbot’s ViRob, which measures 1mm in diameter and 4mm in length, is designed to navigate the human body, for example in blood vessels, the digestive tract and the respiratory system. The company says potential applications include neurosurgery, brachytherapy, imaging and targeted drug delivery.
Microbot is also developing a flexible endoscope that propels itself by serially inflating and deflating balloons called the TipCat, for applications including colonoscopy, vascular and cardiac catheterization and urology procedures.
A 3rd device, the Microbot SCS, is a robotic system designed to prevent occlusions in proximal cerebrospinal fluid shunts using the ViRob device.
Ropes & Gray was legal advisor to StemCells, with Ruskin Moscou Faltischek and Mintz, Levin, Cohn, Ferris, Glovsky & Popeo advising Microbot.