Cellmid to buy Advangen Japan in $4m deal

Cellmid (ASX:CDY) has arranged to buy Advangen Japan - the company that owns the hair growth technology behind its evolis hair product range - in a deal worth around $4 million.

Cellmid has agreed to buy 100% of Advangen Japan for ¥120 million ($1.2 million) in cash, plus the issue of 55.7 million shares at 5 c per share. The shares will be held in voluntary escrow for up to 12 months.

With the purchase, Cellmid will acquire full control of the FGF-5 inhibitor technology platform it has been using under license for its TGA-approved evolis line of hair care products.

Announcing the deal, Cellmid said acquiring the technology means it will no longer have to pay royalties on evolis sales and will be able to produce the products more cost-effectively due to lower material costs.

The acquisition of Advangen Japan also gives the company immediate access to the Japanese hair growth market, export permits to import some Advangen products into China and a jumping-off point for expansion into other markets.

Advangen’s hair product development experience should help Cellmid with its own efforts to develop a hair growth product based on midkines, the human growth factor proteins.

Cellmid is developing treatments for inflammatory disorders and cancer using its anti-midkine antibodies. The company has also licensed midkines as a biomarker for lung cancer to Quest Diagnostics subsidiary Celera and for bladder cancer to Pacific Edge.

Cellmid shares were trading 3.23% higher at $0.032 as of around 1 pm on Friday.