Athersys (ATHX) Announces Cooperation Agreement With HEALIOS K.K.

February 16, 2021 7:51 AM EST

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Athersys, Inc. (NASDAQ: ATHX), a regenerative medicine company developing MultiStem® 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.

About Kenneth H. Traub

Mr. Traub has a successful track record in building value as a leader and investor in numerous companies. He currently serves as Managing Partner of Delta Value Advisors, a consulting firm and Managing Partner of Delta Value Group, an investment management firm. Mr. Traub also currently serves as Chairman of the board of DSP Group, Inc. (NASDAQ: DSPG) and on the board of Tidewater, Inc. (NYSE: TDW). Mr. Traub was previously Managing Partner of Raging Capital Management, CEO of Ethos Management and CEO of American Bank Note Holographics, Inc. (NASDAQ: ABHH). Mr. Traub previously served on the board of directors of Athersys from 2012 – 2016 and from June 2020 – October 2020. Mr. Traub also previously served on the boards of directors of Voxware, Inc., Phoenix Technologies, Inc., iPass, Inc., MIPS Technologies, Inc., Xyratex Limited, Vitesse Semiconductor Corporation, AM Castle & Co., MRV Communications, Inc., IDW Media Holdings, Immersion Corporation, Gulfmark, Inc. and Intermolecular, Inc. Mr. Traub received a BA from Emory College and an MBA from Harvard Business School.

About MultiStem®

MultiStem® cell therapy is a patented regenerative medicine product candidate in clinical development that has shown the ability to promote tissue repair and healing in a variety of ways, such as through the production of therapeutic factors in response to signals of inflammation and tissue damage. MultiStem therapy’s potential for multidimensional therapeutic impact may distinguish it from traditional biopharmaceutical therapies focused on a single mechanism of benefit. MultiStem represents a unique "off-the-shelf" stem cell product candidate that can be manufactured in a scalable manner, may be stored for years in frozen form, and is administered without tissue matching or the need for immune suppression. Based upon favorable outcome data, its novel mechanisms of action, and favorable and consistent tolerability data in clinical studies, we believe that MultiStem therapy may provide a meaningful benefit to patients, including those suffering from serious diseases and conditions with unmet medical need.

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