Gamida Cell (NASDAQ: GMDA) stock plummeted by 83% on Wednesday following the announcement of a strategic restructuring initiative.
Gamida Cell, known for its pioneering advancements in cell therapy, has announced a Restructuring Support Agreement (RSA) with funds managed by Highbridge Capital Management.
This agreement aims to furnish the company with a significant financial uplift while streamlining the ongoing commercialization of its stem cell transplant product, Omisirge® (omidubicel-only).
Under the terms of the restructuring, Highbridge will undertake a conversion of $75 million of its existing unsecured convertible senior notes into equity. In addition, Gamida Cell will receive an infusion of $30 million in new capital on the effective date of the restructuring, with prospects for further investments post-restructuring.
As part of the transaction, Gamida Cell will transition into a private entity wholly owned by Highbridge, with the imminent cancellation of the company’s outstanding ordinary shares. However, Gamida Cell will issue contingent value rights to its ordinary shareholders, potentially amounting to $27.5 million, contingent upon attaining specific revenue and regulatory milestones.
Despite previous challenges in securing a partner for Omisirge, the restructuring initiative represents a pivotal juncture aimed at safeguarding Gamida Cell’s viability and broadening the accessibility of Omisirge to an expanded network of transplant centers and patients. Jonathan Segal, Co-Chief Investment Officer at Highbridge, conveyed confidence in Omisirge’s capacity to address a critical unmet need within the stem cell transplant landscape.
The proposed transaction is subject to approval from an Israeli court, expected to close in the second quarter. Leading the financial and legal advisory for the restructuring process are Moelis & Company LLC (NYSE: MC), Cooley LLP, and Meitar | Law Offices, representing Gamida Cell, while King & Spalding LLP and Herzog Fox & Neeman are advising Highbridge Capital Management.
Gamida Cell (NASDAQ: GMDA) Stock Reaction
GMDA stock plummeted 82.74% to close at $0.06 on Wednesday. The traders had exchanged hands with 122,958,035 (122.95 million) shares compared to the average daily trading volume of 3.08 million.
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