Benzinga | Feb 16, 2021 07:52AM EST

Athersys Announces Cooperation Agreement With HEALIOS K.K. To 'reaffirm the mutual commitment to collaborative development of MultiStem in Japan'; Dr. Kagimoto To Dismiss Section 220 Litigation

Athersys, Inc. (NASDAQ:ATHX), a regenerative medicine company developing MultiStem(r) cell therapy, today announced that it has entered into a cooperation agreement with HEALIOS K.K. ("Healios"), the Company's largest shareholder and one of its commercial partners, and Dr. Hardy TS Kagimoto, a member of the Company's Board and the Chairman and Chief Executive Officer of Healios. The cooperation agreement is intended to reaffirm the mutual commitment to collaborative development of MultiStem in Japan.

Pursuant to the agreement, the parties commit to work in good faith to finalize negotiations, with a spirit of cooperation and transparency as quickly as possible, on open matters important to successful commercialization in Japan. Further, Dr. Kagimoto has also agreed to voluntarily dismiss the Section 220 litigation with prejudice that he initiated in the Court of Chancery of the State of Delaware and withdraw his Section 220 demand. The Board will also appoint Mr. Kenneth H. Traub, a former member of the Board of Athersys, as a director of the Company.

"This mutual agreement represents a significant positive development for Athersys, and we look forward to continuing to collaborate with Healios as a commercial partner," said Dr. Ismail Kola, Chairman of the Athersys Board. "This agreement will enable both Athersys and Healios to focus on advancing our late-stage programs for MultiStem, including preparing for top line results from Healios' TREASURE trial for stroke and ONE-BRIDGE trial for ARDS, which we continue to expect in this year. With the accelerated regulatory pathways in Japan, we look forward to working closely with Healios as they prepare for their rolling submission for potential approval in Japan. We remain excited about the potential for MultiStem to change the lives of millions of patients globally and will continue to work towards expanding our international network of collaborations and alliances, to advance our clinical programs and drive value for our shareholders."

Dr. Kagimoto stated, "I am very pleased to have reached this mutually beneficial agreement with Athersys. I would like to compliment the independent directors of the Athersys Board on their constructive approach to our recent discussions, and I am confident the today's announcements will strengthen the Company moving forward. This is a critical time for Athersys, as it is closer than ever to transitioning from its developmental stage into a growing, commercial biotech company positioned to address significant unmet patient needs. Healios continues to be fully committed to a successful partnership with Athersys, and we are focused on helping the Company realize its full potential in order to save and improve patient lives while helping to deliver value for all Athersys shareholders."

In addition, Healios has agreed to customary standstill and voting commitments in connection with the cooperation agreement. Additional information about the agreement with Healios will be included in a Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission.