Select Page

Microbot Medical Ltd. agreed to acquire 95 percent of Silicon Valley-based StemCells Inc. (NASDAQ: STEM), listed on the NASDAQ market since 1992, in a stock-for-stock reverse merger deal. StemCells concurrently raised $2 million in debt finance from Liechtenstein-based Alpha Capital AG, a privately owned investment firm managed by German investor Konrad Ackermann. After rising from $0.37 to $2.84 per share earlier in the week as a result of the announcement, StemCells’ stock was trading at $1.29 per share on Friday afternoon, bringing its market capitalization to $14 million. The deal has been approved by the boards of directors of both companies who have recommended that their shareholders approve the merger. The deal closing is subject to shareholders’ and regulatory approval and other customary closing conditions. The closing is further subject to StemCells obtaining certain balance reductions from its creditors, so that its “cash position, net of debt and certain other liabilities, is not less than $0,” excluding the concurrent debt funding by Alpha Capital. After the closing, the combined company will operate under the name “Microbot Medical Inc.” or “another name designated by Microbot,” StemCells disclosed in an SEC filing. Following the consummation of the merger, former stockholders of Microbot and certain advisors “are expected to own 95% of the combined company,” and current stockholders of StemCells “are expected to own 5% of the combined company.” The board of directors of the combined company will be designated by Microbot. Microbot Medical was founded in 2010 by Prof. Moshe Shoham, Yossi Bornstein and Harel Gadot, based on the ViRob and TipCAT technologies stemming out of Prof. Shoham’s lab at the Technion Israel Institute of Technology. ViRob is a revolutionary autonomous crawling micro-robot controlled by remotely applied electromagnetic fields. It measures 1 millimeter in diameter and 4 mm in length allowing it to navigate and crawl in different spaces within the human body, including blood vessels, the digestive tract and the respiratory system. The robot’s unique structure gives it the ability to move in tight spaces and curved passages as well as the ability to remain within the body for some time. TipCAT is a proprietary flexible, self-propelled endoscope providing SEE & TREAT capabilities within tubular lumens in the human body such as the colon, blood vessels, and the urinary tract. TipCAT’s self-propulsion is generated by a series of balloons, sequentially inflating and deflating to create locomotion. Prof. Shoham, Microbot’s scientific director, is a world-renowned authority in the field of robotics, who has conducted research in this field for over 25 years with a special focus on kinematics and dynamics of robots, sensor integration and medical applications. He is the head of the robotics lab at the Technion’s faculty of Mechanical Engineering, and previously served as director of the robotics lab at the Department of Mechanical Engineering of Columbia University in New York. Prof. Shoham is also the founder of Caesarea, Israel-based Mazor Robotics (NASDAQ/TASE: MZOR), a growing medical device company in the field of surgical robotics. “We are pleased that this transaction will give us a presence in the US 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,” said Harel Gadot, chairman and CEO of Microbot and MEDX Ventures, which led the funding and launch of Microbot. MEDX Ventures Group, founded in 2010, with offices in Israel, US and Europe, is a med-tech investment firm focused on medical ventures in Israel. In March, Avi Hasson, the Chief Scientist of the Israeli Ministry of Economy and Industry, said that, “MedX was selected to establish and run a technological incubator in Or Yehuda. The incubator, owned by Boston Scientific, Intellectual Ventures, Med-Accelerator and Tel Hashomer Hospital’s commercialization company, will invest in the fields of medical devices, combined medicine and digital health for operations, diagnostics and treatment.” “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,” said StemCells CEO Ian Massey. “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.” Ropes & Gray LLP acted as legal advisor to StemCells and Ruskin Moscou Faltischek PC and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC acted as legal advisor to Microbot. Photo: (L-R) Prof. Moshe Shoham demonstrates his medical robot to PM Benjamin Netanyahu, Technion President Prof. Peretz Lavie, and (then) Minister of Science and Technology Prof. Daniel Hershkowitz, at a Technion’s American Society of Mechanical Engineering – 2013 Thomas A. Edison Patent Award ceremony honoring Prof. Shoham.]]>