Letter to shareholders
As I am certain our Celularity shareholders are aware, the sharp devaluation in share prices, industry-wide, has created tremendous anxiety as well as considerable headwinds in capital raising activities in biotechnology. Moreover, cell therapy as a sector, one of the highest valued segments of the industry just 18 months ago, has been very sharply affected and continues to be slow to recover. Celularity has not been immune to these pressures. In response, we have devoted considerable effort to tune our efforts on the component of our business which is revenue generating and to refine our cell therapy development to areas where our technology, clinical data, and manufacturing infrastructure can be leveraged to their highest value. Our “play-to-our-strength” approach, we believe. is gaining momentum.
In my May 8th letter, I highlighted a commitment we received for our biomaterial products in the Middle East. I also indicated that we continue to pursue our cell therapy programs with focus, speed, and efficiency. I’m pleased to report we are making progress on both fronts.
On May 23rd, we announced a $45 million purchase order under a Middle East private label agreement with Jamjoom Medical Store and expect to begin shipping product shortly. This purchase order marks another important step in Celularity’s global commercial strategy which in addition to the Middle East includes a previously announced collaboration in Asia with the Genting Group, a long-time stakeholder in Celularity.
We continue to work with AD Ports Group and Tamer Group, with which we executed previously announced exclusive product distribution agreements for Celularity-branded Halal Certified products in the Gulf Cooperation Council regions and Egypt (AD Ports) and the Kingdom of Saudi Arabia (Tamer).
Our research and clinical development teams continue to make progress with our investigational cell therapy programs. In May, we presented Phase 1 data at the 26th Annual Meeting of the American Society for Gene and Cell Therapy showing that therapy with mesenchymal-like adherent stem cells (MLASCs) results in alterations in gene and protein signatures associated with inflammation and fistula formation in patients with Crohn’s disease. While these are early data, they give us confidence in the potential opportunity for our novel genetically modified allogeneic placental-derived MLASC, APPL-01, in Crohn’s disease, where we believe a cell therapy candidate has the potential to make a significant difference.
Our scientists also published data in the journal Cytotherapy demonstrating that CRISPR-mediated tissue factor gene knockout in allogeneic stromal cells (ASCs) leads to significantly lower tissue factor expression, activity and thrombotic effects, potentially providing a feasible strategy to improve the safety of ASC-based cell therapy. Later this month, our scientists will present on “Placental Derived- Mesenchymal Like Stromal Adherent Cells and their Therapeutic Potential” at the 3rd Edition of International Conference on Tissue Engineering and Regenerative Medicine (TERMC 2023) in London.
Last week, we announced an exclusive U.S. commercialization agreement with Verséa Ophthalmics to distribute Celularity’s Biovance® and Biovance® 3L Ocular products for ophthalmic applications, including the treatment of ocular surface disease and ocular surgical applications. We believe Biovance® and Biovance® 3L Ocular will address an important unmet need in these applications. As we stated in the announcement, the global persistent corneal epithelial defect management market alone is valued at $8.5 billion and expected to grow at an 18 percent compound annual growth rate (CAGR) through 2033 to reach a valuation of $44.49 billion, according to Future Market Insights.
We presented biomaterial data at the 7th International Conference on Orthopedics from an in vitro study of decellularized-flowable placental connective tissue matrix supporting cellular functions of human tenocytes. Our scientists also presented data at the International Conference on Biomaterials Science and Tissue Engineering in Osaka, Japan, that support our belief that Celularity’s unique proprietary processes result in human placental-derived biomaterial products that demonstrate superior biocompatibility and better support differentiated cell functions, as compared with other human placental-derived biomaterials which may contain cellular residuals.
Staying with biomaterials, our pipeline includes two investigational-stage products that we are developing as devices regulated by the FDA’s Center for Devices and Radiological Health (CDRH). Our FUSE Bone Void Filler (“FUSE”) is being developed for use as a passive osteoconductive bone filler in the pelvis, extremities, and posterior-lateral spinal fusion settings as well as other skeletal defects. We intend to submit a 510(k) notification for FUSE in early 2024. In addition, we are developing our Celularity Tendon Wrap (CTW) for use as a surgical mesh for the management and protection of tendon injuries and intend to submit a 510(k) application by the end of 2023.
Last week, we raised approximately $3.0 million of additional working capital intended to help bridge the company through some of the events discussed above, including shipping product for distribution in the Middle East. While navigating capital markets is challenging, we remain confident in our ability to do so in a manner that is prudent and consistent with long-term value.
This is an exciting time during which Celularity continues to gather critical momentum. As we work through the challenges we face in today’s environment, we remain focused on both the long-term potential of our programs and products to bring forward innovative solutions to patients in need, and our commitment to creating meaningful sustainable shareholder value.
I thank you for your continued support. I will continue to keep you informed of our progress.
Robert J. Hariri, M.D., Ph.D.
Chairman, CEO and Founder
Carlos Ramirez, Sr. Vice President