YOFOTO (China) Health Industry Co. Ltd to Invest in
Becoming RepliCel's Strategic Partner for Greater China
Terms Include an Up-front Investment of USD
$6.5 Million with Direct Non-Dilutive
Program Funding Commitments and the Potential for Significant
Milestone Payments and Sales Royalties
VANCOUVER and NINGBO, Zhejiang
Province, China,
Jan. 16, 2018 /CNW/ - RepliCel Life
Sciences Inc. (OTCQB: REPCF) (TSXV: RP) (FRA:P6P2) ("RepliCel" or
the "Company"), a company developing next-generation technologies
in aesthetics and orthopedics, is pleased to announce it has signed
a Binding Term Sheet (the "Term Sheet") with YOFOTO (China) Health Industry Co. Ltd. ("YOFOTO") to
form a strategic partnership (the "Transaction") in Greater China (Mainland China, Hong Kong, Macau, and Taiwan) (the "Territory").
The deal reflected in the Term Sheet, involves an up-front
investment of USD $6,500,000 and
potential pre-commercial, non-dilutive milestones payments of
another USD $2,800,000. Additionally,
the Term Sheet commits YOFOTO to another USD $1,000,000 in potential post-commercial
non-dilutive milestone payments, several million in dedicated
program funding in Greater China
over the next five years, and future royalty payments calculated on
gross product sales in the Territory.
The investment is by way of the purchase of common shares (each,
a "Share") at CDN$0.54 per Share,
which is a premium over the 20-day average market price to reflect
the accompanying license to YOFOTO in the Term Sheet. The Company
has also agreed to issue share purchase warrants (each, a
"Warrant") equal to 10% of the number of Shares issued, which
warrants will be exercisable at CDN$0.54 per Share for a period of two
years.
YOFOTO has already paid a deposit of USD $650,000 (the "Deposit") pursuant to the
agreement. As part of the Transaction, YOFOTO will receive an
exclusive license for RepliCel's tendon regeneration cell therapy
(RCT-01) in development, skin rejuvenation cell therapy (RCS-01) in
development, and its injection technology in development for dermal
applications (RCI-02) (excluding hair-related treatments) for the
Territory.
According to sources, the Chinese cosmetic treatment market is
growing up to six times faster than the global average by number of
treated people with the number of procedures increasing as much as
40% year-on-year. Most experts now agree China now represents the third largest
cosmetic treatment market behind only the
United States and Brazil
but closing in fast.1
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1 According to statistics release by the Chinese
Association of Plastics and Aesthetics (see
https://www.pressreader.com/china/china-daily/20160215/282029031282786)
and the Chinese plastic surgery mobile app SoYoung (see
http://www.plasticsurgerypractice.com/2017/08/about-face-chinas-plastic-surgery-market-grows-six-times-faster-than-global-average/).
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In 2013, RepliCel executed a co-development and license
agreement with Shiseido Company, which covered all of Asia for its product (RCH-01) in development
for the treatment of androgenetic alopecia. With the completion of
the YOFOTO deal, RepliCel's current technologies will be fully
licensed in Greater China.
RepliCel's business model is focused on leveraging its expertise
in developing assets that can then be licensed to partners for
co-development and commercialization. The Company maintains
exclusivity over its entire portfolio outside of Asia. The Company is pursuing both its own
continued development and commercialization of its assets as well
as other collaborative partnerships for its programs in different
regions of the world.
"This is precisely the kind of transformational deal and
collaboration we were focused on delivering as we ended 2017,"
stated RepliCel President and CEO, R. Lee
Buckler. "We are very pleased to have secured a
partnership with a company committed to bringing novel health
products to Greater China and the
principle of investing in regenerative medicines," he continued.
"YOFOTO has the vision, financial capacity, and infrastructure to
be a key part of RepliCel's success overall and certainly capable
of exceeding our goals for Greater
China."
"YOFOTO is committed to being a leader in China in the commercialization of regenerative
medicines which fit into our core values related to beauty and
healthy, active lifestyles," stated YOFOTO Chairman Mr.
Huang Jin Bao. "RepliCel Life
Sciences, with its cell therapy and injection technologies focused
on healthy skin and tendon health, fit perfectly with YOFOTO's
vision for providing innovative treatments to consumers. As an
investor, we are committed to contributing to RepliCel's global
success and as a strategic partner in Greater China, we look forward to
collaborating with RepliCel on quality product development leading
to the launch of several successful product lines."
As part of the Transaction, the
Company has agreed to grant YOFOTO certain financing
participation rights and board seat nominations and YOFOTO has
agreed to certain voting and trading restrictions. Closing
of the Transaction is subject
to execution of definitive agreements
for the Transaction, receipt of approval
of the TSX Venture Exchange,
the Company's shareholders and other
applicable regulatory authorities including but not limited
to the reviews and approvals by State Administration of Foreign
Exchange of China and other
Chinese foreign investment regulatory authorities.
About YOFOTO
YOFOTO (China) Health Industry Co., Ltd was
established in 2004 as a company engaged in the health and consumer
products industry. For example, YOFOTO has registered 31 different
nutraceuticals with the State Food and Drug Administration
(China). With a wide range of
successful commercial products in the food, personal health care,
and household categories, YOFOTO is now diversifying into
higher-value health-related products and services such as genetic
and blood testing, regenerative medicine, and destination
health-treatment clinics. As part of its strategy, YOFOTO has made
several investments outside of China. Its current expansion includes a global
R&D production base, organic food base, natural cosmetic
R&D center, a conference center, yacht club and health spa
resort.
YOFOTO employs a winner of Nobel Prize in physiology and
medicine, Professor Richard Roberts,
who heads the YOFOTO Global Products Advisory Committee, and also
leads collaborations with several leading scientific research
institutions. At present, YOFOTO has registered over 700 trademarks
and attained over 60 patents. YOFOTO has 32 provincial branches in
China and, in 2009, began
international expansion into Russia, Vietnam, Thailand and Cameroon. At the same time,
YOFOTO began active participation in the Asia-Pacific Economic
Cooperation (APEC) forum. YOFOTO Chairman of YOFOTO, Mr.
Huang Jin Bao, was elected to be the
member of the first APEC Chinese Industry and Commerce
Council.
About RepliCel Life Sciences
RepliCel is a
regenerative medicine company focused on developing cell therapies
for aesthetic and orthopedic conditions affecting what the Company
believes is approximately one in three people in industrialized
nations, including aging/sun-damaged skin, pattern baldness, and
chronic tendon degeneration. These conditions, often
associated with aging, are caused by a deficit of healthy cells
required for normal tissue healing and function. The Company's
product pipeline is comprised of RCT-01 for tendon repair, RCS-01
for skin rejuvenation, and RCH-01 for hair restoration. RCH-01 is
currently being co-developed with, and under exclusive license by,
Shiseido for certain Asian countries. All product candidates are
based on RepliCel's innovative technology, utilizing cell
populations isolated from a patient's healthy hair follicles.
RepliCel has also developed a proprietary injection device, RCI-02,
optimized for the administration of its products and licensable for
use with other dermatology applications. Please
visit www.replicel.com for additional information.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Disclaimer for Forward-Looking Statements
This press release contains forward-looking statements and
information that involve various risks and uncertainties regarding
future events, including, but not limited to, statements regarding:
(i) the completion of the Transaction with YOFOTO; (ii) the
terms of the Transaction and the milestone, program funding and
royalty payments to be made in connection with the Transaction; and
(iii) the closing of the Transaction.
These statements are only predictions and involve known and
unknown risks which may cause actual results and the Company's
plans and objectives to differ materially from those expressed in
the forward-looking statements, including: risks related to the
Company and YOFOTO being able to negotiate and enter
into the definitive agreements required for the
Transaction, risks related to the Company obtaining the approval of
the TSX-V and its shareholders, risks related to YOFOTO obtaining
consent for the Transaction from the required parties and
applicable regulatory authorities; risks that the
Company's products may not perform as, or have the
benefits, expected; risks that the Company's
products may not be accepted and
adopted by the public; the risk that the Company will not
obtain CE mark clearance for its injector device; the
risk that there will be delays enrolling clinical trial
participants; the risk that the Company will receive negative
results from the Company's clinical trials; the effects of
government regulation on the Company's business; risks associated
with the Company obtaining all necessary regulatory approvals for
its various programs; risks associated with the Company's ability
to obtain and protect rights to its intellectual property; risks
and uncertainties associated with the Company's ability to raise
additional capital; and other factors beyond the Company's control.
Although the Company believes that the expectations reflected in
the forward-looking statements are reasonable, it cannot guarantee
future results, levels of activity or performance. Further, any
forward-looking statement speaks only as of the date on which such
statement is made and, except as required by applicable law, the
Company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of such factors and
to assess in advance the impact of such factors on the Company's
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement. Readers should consult
all of the information set forth herein and should also refer to
the risk factor disclosure outlined in the Company's annual report
on Form 20-F for the fiscal year ended December 31, 2016 and other periodic reports
filed from time-to-time with the Securities and Exchange Commission
on Edgar at www.sec.gov and with the British Columbia Securities
Commission on SEDAR at www.sedar.com.
SOURCE RepliCel Life Sciences Inc.