SOURCE: Orgenesis

Orgenesis

December 16, 2015 09:00 ET

Orgenesis Secures $10 Million in Financing and Retains Ownership of MaSTherCell SA

GERMANTOWN, MD--(Marketwired - Dec 16, 2015) - Orgenesis Inc. (OTCQB: ORGS) (the "Company"), a cell therapy and regenerative medicine company with a novel therapeutic technology dedicated to converting a patient's own cells into functioning insulin-producing cells as a treatment for diabetes, today announced the company has raised and fulfilled its obligation for a $10 million debt or equity financing and, per a prior agreement, allows Orgenesis to fulfill its obligation and finalize the acquisition of MaSTherCell, an advanced cell therapy and bio-manufacturing company. MaSTherCell will continue to function and be managed as a separate company.

"We are pleased to report that the unwind of MaSTherCell has been permanently waived," said Vered Caplan, CEO of Orgenesis. "We have raised the requisite amount of capital that was required to meet the threshold. We are now in a more secure position to continue our efforts in expanding our business and putting in place the necessary steps towards attaining GMP and other requirements leading up to human clinical trials of our cellular transdifferentiation technology as a potential treatment for Type 1 Diabetes."

With respect to the equity financing, the Company sold units priced at $0.52 in a private placement (the "Private Placement") consisting of 8,227,647 shares of the Company's common stock and 8,227,647 three year warrants to purchase up to an additional share of the Company's Common Stock at a per share exercise price of $0.52. The units were issued pursuant to subscription agreements for aggregate proceeds to the Company of $4,278,376.

With respect to the debt financing, the Company entered into securities purchase agreements with two accredited investors pursuant to which these lenders furnished to the Company access to up to $5.0 million in credit lines (collectively, the "Credit Facility Agreements"). Pursuant to the Credit Facility Agreements, upon request the Company is entitled to receive $500,000 or such lesser amount as may then be available under the credit facility, in consideration of which, it will issue to such persons, promissory notes for the amount advanced (the "Credit Notes"). The Company may draw down on the credit facility as needed until the entire $5.0 million is exhausted. Unless extended by mutual arrangement, the credit facility terminates on the earlier to occur of (i) November 30, 2016 and (ii) such time as the Company shall have raised in excess of $10 million in an equity investment. In consideration of the funding commitment under the Credit Facility Agreements, the Company issued to these lenders warrants to purchase up to an aggregate of 2,358,491 shares of the Company's Common Stock at a per share exercise price of $0.53 per share (the "Commitment Warrants"). Additionally, upon the issuance of Credit Notes, the Lender is entitled to three year warrants ("Drawdown Warrants") to purchase additional shares of the Company's Common Stock at $0.53. If the entire $5,000,000 were drawn down by the Company, it would issue to the Lenders a total of 4,716,980 Drawdown Warrants.

The Company has also raised an aggregate of $950,000 in principal amount of convertible notes issued since June 2015 (the "Convertible Notes") to accredited investors. The Convertible Notes have scheduled maturity dates between December 2015 and October 2016 and are convertible by the holder into shares of the Company's Common Stock at 75% of the then market price of the Company's Common Stock, based on the price of the Company's Common Stock for the five trading days prior to conversion, but in no event at less than $0.40 per share.

The Company will also provide additional investment into MaSTherCell for its expansion and growth as a leading subcontractor. These funds will allow the company to fulfill its vision as a rapidly growing and innovative cell manufacturer for its current and future customers. MaSTherCell will also provide manufacturing services for Orgenesis's clinical trials going forward.

For further details on the financing, please refer to the Company's Form 8-K as filed with the SEC on December 15, 2015.

About Orgenesis Inc.
Orgenesis is a cell therapy and regenerative medicine company that is committed to developing a cure for Type 1 Diabetes. In pursuit of this goal, the company has developed and patented a novel technology called "cellular trans-differentiation" that turns an insulin-dependent patient's own liver cells into functional insulin producing cells. Orgenesis has proven that, when exposed ex-vivo to certain pancreatic transcription factors and in specific sequence, human adult liver cells can be transformed into fully functional, beta cell-like insulin producing cells (IPCs). After ex-vivo expansion, the IPCs are re-infused via the portal vein of the diabetic patient. In pre-clinical models of Type 1 Diabetes (Non-Obese Diabetic mice), the re-introduced IPCs remain in the liver, effectively respond to glucose challenge and successfully maintain glycemic homeostasis. In the same NOD model, the implanted IPCs were not subject to auto-immune attack or cellular ablation. Orgenesis plans to initiate P1/2 trials in the next 12-18 months. Orgenesis believes that converting the diabetic patient's own tissue into insulin-producing cells has the potential to overcome the significant issues of donor shortage, cost and exposure to chronic immunosuppressive therapy associated with islet cell transplantation. For more information, visit www.orgenesis.com.

About MaSTherCell
MaSTherCell SA (Manufacturing Synergies for Therapeutic Cells), a spin-off from ULB (Université Libre de Bruxelles) launched in 2011, is a technology-driven, quality-minded and customer-oriented Contract Development and Manufacturing Organization (CDMO) specialized in cell therapy development for advanced medicinal products. The company is located in Gosselies, Belgium and provides GMP manufacturing for cell therapy companies. Its mission is to combine expertise, quality systems and infrastructure to help its customers bring highly potent cell therapy products faster to the market. www.masthercell.com

Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" which are not purely historical. Such forward-looking statements include, among other things, the expectations of management that our regeneration technology can be developed as therapeutic treatment for diabetes which could, if successful, be a cure for Type 1 Diabetes; that we can develop the technology to turn a small number of cells into a large number of cells; that we are in a secure position to attain the requirements for human clinical trials; and that we will initiate Phase I and Phase II clinical trials in the near-term. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Orgenesis will obtain from them. Actual results could differ from those projected in any forward-looking statements due to numerous factors, including, among others, the potential failure of development candidates to advance through preclinical studies or demonstrate safety and efficacy in clinical testing; the ability to pass clinical trials so as to move on to the next phase; our technology may not as well as expected, our ability to retain key employees; our ability to finance development and operations; our ability to satisfy the rigorous regulatory requirements for new medical procedures; and competitors may develop better or cheaper alternatives to our products. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should refer to the risk factors disclosure outlined in our periodic reports filed from time-to-time with the Securities and Exchange Commission.

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