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HSCI and RVC Biofund Sign Investment Agreement on Implementation of Joint Project in Medical Genetics and Reproductive Medicine

Moscow – 19 February 2014.   The Human Stem Cells Institute (“HSCI”, MOEX: ISKJ), one of Russia’s leading biotech companies specializing in cell-based, gene and post-genome technologies, announces the signing of an investment agreement with RVC Biofund.

The agreement was signed in Moscow on 17 February 2014 with the aim of implementing a project to create in Russia a network of Genetico medical centers for the development of personalized medicine based on the principle of an individualized approach to the prevention, diagnosis and treatment of genetic disorders. This project also entails the development of services based on a reproductive cell and tissue bank (personal storage and donation).

The project is being implemented through a subsidiary of HSCI – the Regenerative and Genetic Medical Center of the Human Stem Cells Institute (RGMC HSCI LLC) – in which RVC Biofund will become a participant. According to the provisions of the agreement, the parties intend to jointly invest in the business of this company in order to achieve the key financial indicators set for the project.

The total volume of project financing over the course of the first two years will be 179.2 million rubles. The share of financing provided by HSCI will be 76.2 million rubles. These figures do not include nonmonetary contributions to the project company by HSCI. The nonmonetary assets are to be transferred by HSCI to the project company on the basis of a report by an independent appraiser, and information about the size of the contribution will be disclosed as stipulated by law.

Artur Isaev, General Director of HSCI, noted: “The mission of the Genetico project is to make the latest scientific achievements in the field of medical and reproductive genetics accessible for Russians, which will increase both the length and the quality of people’s lives. In order to reach this goal we are using a unique and comprehensive strategy. This strategy entails the creation and use of a high-tech laboratory base as well as the development of a network for providing advanced medical genetics consultations. The Genetico project is very important for us, and it is important that it will be implemented in partnership with an investment fund which is highly competent in the field of biotechnology and has a strong reputation in the investment community.”

Egor Beketov, CEO of RVC Biofund, said: “Our investment in RGMC will provide a new impulse to the development of advanced medical genetics technologies in Russia. According to its business model, RGMC will be focused on active scientific cooperation and business partnerships with biopharmaceutical companies that develop products based on a person’s individual characteristics. Within the framework of this service model, the developers will have access to the wide range of RGMC’s competencies – from the high-tech infrastructure and state-of-the-art laboratory complex to the regional network of medical genetics consultation centers.”

The investment agreement signed by HSCI and RVC Biofund will take effect once the relevant corporate approval procedures have been completed in accordance with existing laws.

For the purpose of approving this transaction, on 5 February 2014 the Board of Directors of HSCI called for the convening of an Extraordinary General Shareholders’ Meeting (EGSM) via absentee voting, with 27 March 2014 being the final day for submission of voting bulletins.

More detailed information about the deal’s conditions as well as other deals related to the implementation of the investment agreement will be provided in the voting bulletin as well as in the materials provided to parties authorized to take part in the EGSM within the timeframe stipulated by the law.

Full Version of the Press Release (224 kb)

19 February 2014