BOSTON and NEW YORK - In a significant development for the biotechnology sector, Gamida Cell Ltd. (NASDAQ:GMDA), known for its innovative cell therapies, has announced a Restructuring Support Agreement with funds managed by Highbridge Capital Management, LLC.
This agreement is set to provide the company with a substantial financial boost and facilitate the continued commercialization of its stem cell transplant product, Omisirge® (omidubicel-onlv).
Under the terms of the restructuring, Highbridge will convert $75 million of its existing unsecured convertible senior notes into equity. Moreover, Gamida Cell will receive $30 million of new capital on the effective date of the restructuring, with further investments anticipated post-restructuring. These financial maneuvers are aimed at providing Gamida Cell with a long-term financial runway to meet its commercialization goals for Omisirge.
The transaction will also result in Gamida Cell becoming a private entity, wholly owned by Highbridge, with the company's outstanding ordinary shares expected to be canceled. However, Gamida Cell will issue contingent value rights to its ordinary shareholders, which could be worth up to $27.5 million, depending on the achievement of specific revenue and regulatory milestones.
Despite previous challenges in securing a partner for Omisirge, the restructuring is intended to ensure Gamida Cell's survival and expand the availability of Omisirge to more transplant centers and patients. Jonathan Segal, Co-Chief Investment Officer at Highbridge, expressed confidence in Omisirge's potential to address a critical unmet need in the stem cell transplant arena.
The proposed transaction is awaiting approval from an Israeli court and is expected to close in the second quarter. The financial and legal advisement for the restructuring is being provided by Moelis (NYSE:MC) & Company LLC, Cooley LLP, and Meitar | Law Offices for Gamida Cell, with King & Spalding LLP and Herzog Fox & Neeman advising Highbridge.
Gamida Cell's proprietary nicotinamide (NAM) technology is at the core of its cell therapy products, including Omisirge, which is FDA-approved for certain hematologic malignancies. The company is also investigating GDA-201, a natural killer cell therapy candidate.
This article is based on a press release statement and presents the key facts of the restructuring agreement between Gamida Cell and Highbridge Capital Management.
InvestingPro Insights
In light of Gamida Cell Ltd.'s recent announcement regarding its restructuring support agreement, a closer look at the company's financial health and market performance provides additional context.
According to InvestingPro data, Gamida Cell holds a market capitalization of approximately $45.5 million. The company's financial metrics indicate significant challenges, with a negative Price/Earnings (P/E) ratio of -0.41 and a Price/Book (P/B) ratio standing at a steep 119.1, as of the last twelve months leading up to Q3 2023.
InvestingPro Tips reveal that analysts have recently revised their earnings expectations upwards for the upcoming period. This could signal a belief in the potential for Gamida Cell's restructuring plan to positively impact its financial trajectory.
On the other hand, Gamida Cell is noted for quickly burning through cash and suffering from weak gross profit margins, which are just 6.98% as of the same period. Furthermore, the stock has experienced substantial volatility, with a 6-month price total return of -63.07%, showcasing the high-risk nature of investing in the biotech sector.
For investors looking to dive deeper into Gamida Cell's prospects and financial details, there are additional InvestingPro Tips available. The platform offers a comprehensive analysis, including 11 more tips that could help investors make more informed decisions. To explore these insights, visit https://www.investing.com/pro/GMDA and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.