StemBioSys announces acquisition of majority stake in Cartox

StemBioSys, Inc. (StemBioSys) and CarTox, Inc. (Cartox) are pleased to announce that StemBioSys has acquired a majority stake in Cartox. StemBioSys will acquire all remaining equity of Cartox subject to the achievement of certain milestones.

Cartox has developed an innovative approach to test cardiac safety of new drugs before those drugs are given to human patients in clinical trial programs. The Cartox technology was initially developed at the University of Michigan by Drs. Todd Herron and José Jalife who formed a company (Cartox) to further develop and commercialize this novel technology. StemBioSys believes that this technology holds significant commercial promise for applications in both pre-clinical cardiotoxicity testing as well as the potential to revolutionize the cardiac drug efficacy screening process.

Over the last two years, StemBioSys and Cartox have been working together on an important application of StemBioSys’s unique CELLvo™ extracellular matrix (ECM) technology. Researchers at Cartox have demonstrated that a novel form of StemBioSys’s matrix technology offers a unique environment for cardiomyocytes (heart muscle cells) that are used in drug safety testing. Data developed early on in the joint work was included as part of a Phase 2 SBIR (Small Business Innovation Research) grant application awarded by the National Institute of Environmental Health Sciences. This application was successful and Cartox and StemBioSys jointly received a $1.3 million federal grant in April of 2019 (Grant R44ES027703-03). The companies have been working together to further develop this technology using this non-dilutive grant funding which will continue through early 2021. The companies are currently jointly pursuing additional grant funding to continue to develop the combined technologies.

Cartox will bring its unique imaging technologies and deep expertise in working with cardiomyocytes to StemBioSys. StemBioSys will drive the overall product development and commercialization effort of these innovative technologies.

Bob Hutchens, StemBioSys President and CEO, stated:

We have been working with the Cartox team and the researchers at the University of Michigan for over two years. Through our combined efforts to date, we have demonstrated that the novel form of our matrix addresses an important unmet need in drug safety screening. The US Food and Drug Administration (FDA) has been working to identify new technologies for cardiac safety testing for over five years. We believe that by combining forces with Cartox, we can offer regulators and the market place a unique end to end solution to address this important issue”

StemBioSys Chairman Cathy Burzik added:

The acquisition of Cartox advances StemBioSys’ ability to provide drug screening and drug toxicology testing to pharmaceutical companies globally. The Board is highly supportive of adding these capabilities to StemBioSys’ life sciences business and congratulates management on the acquisition.”

Todd Herron, President & CEO of Cartox stated that:

In collaboration with StemBioSys’ scientific and management teams we have made a great discovery to improve the quality of pre-clinical cardiotoxicity screening assays. The novel ECM generated using StemBioSys’ unique process consistently improves the quality of the human cardiomyocytes that we use at Cartox for cardiotoxicity and proarrhythmia screening. These improvements provide a solution that FDA regulators, pharmaceutical companies and researchers have been searching for to improve the predictive power of pre-clinical safety screening using human cells. This represents a big step towards reducing, refining and replacing the use of animals in the drug discovery and toxicity testing fields.”

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