Celularity and GX Acquisition announce merger agreement to create publicly listed leader in allogeneic cellular therapy

Celularity, a clinical-stage biotechnology company, leading the next evolution in cellular medicine with the development of off-the-shelf allogeneic therapies derived from the postpartum human placenta, and GX Acquisition Corp., a special purpose acquisition company, announced they have entered into a definitive merger agreement pursuant to which GX Acquisition Corp. will combine with Celularity.

Upon the closing of the transaction, which is expected to occur in the second quarter of 2021, GX Acquisition Corp. will be renamed Celularity Inc., and its common stock and warrants are expected to remain listed on Nasdaq under the new ticker symbols “CELU” and “CELUW.”

In addition to the approximately $292 million held in GX Acquisition Corp.’s trust account (assuming no stockholder redemptions are effected), a group of existing and other institutional investors have committed to participate in a concurrent equity financing through the sale of approximately $80 million of GX Acquisition Corp. Class A common stock at $10.00 per share. Investors in the PIPE include existing Celularity stockholders or their affiliates including Starr Insurance Companies, Dragasac Limited, Sorrento Therapeutics, as well as unaffiliated institutional investors.

Approximately $372 million of total expected proceeds from the PIPE and cash held in GX Acquisition Corp.’s trust account will be added to the combined company’s balance sheet (assuming no stockholder redemptions are effected). The company will operate under the Celularity management team, led by Founder, Chairperson and Chief Executive Officer, Robert J. Hariri, M.D., Ph.D. The boards of directors of both GX Acquisition Corp. and Celularity have unanimously approved the proposed transaction. Completion of the transaction is subject to approval of both GX Acquisition Corp.’s and Celularity’s stockholders and the satisfaction or waiver of certain other customary closing conditions.

“I would like to thank the team at Celularity, existing Celularity and GX Acquisition Corp. stockholders, the PIPE investors, and all our advisors for their dedication in preparing for this transaction. We anticipate that the proceeds will provide us added runway and enable us to accelerate the development of innovative, off the shelf allogeneic cell therapies, including genetically modified natural killer (NK) cell therapies and CAR T cell therapies derived from the postpartum placenta. We expect to leverage this transaction and our new state-of-the-art manufacturing facility to advance the delivery of best-in-class cell therapies to patients with unmet medical needs,” said Dr. Hariri.

“At Celularity we believe the next evolution in allogeneic cell therapy entails the delivery of rapidly scalable, high quality and economical solutions. It is in the continued spirit of evolution that today we announce our plans for becoming a public company,” Dr. Hariri added.

John Sculley, Vice Chairman of the Board of Celularity, former CEO of Apple Inc., and former President of Pepsi Cola, further speaks to the Company’s dynamic footprint: “Bob is creating systemic change with Celularity – he started with his insight of the incredible power of the placenta, something that is being discarded, as the source material to come up with immuno-oncology therapies that would touch many types of cancer, and be scalable to reach millions of people.”

Dean C. Kehler, Co-Chairman and CEO at GX Acquisition Corp., added, “We are excited to partner with the management of Celularity to create a new publicly-traded cell therapy company. Most importantly, this transaction will help to continue the decades of innovation by Dr. Hariri and his seasoned team, with the goal of developing new immunotherapies to treat cancer and other diseases.”

Celularity is a clinical-stage biotechnology company leading the next evolution in cellular medicine with the development of allogeneic placental-derived cell therapy products, including genetically engineered placental-derived natural killer (“NK”) cells and unmodified NK cells; placental-derived T cells engineered with a chimeric antigen receptor (“CAR -T cells”); and mesenchymal-like adherent stromal cells (“ASCs”). The cell therapy products are being developed to target indications across cancer, infectious and degenerative diseases.

Celularity believes that by harnessing the placenta’s unique biology and ready availability, it will be able to develop therapeutic solutions that address a significant unmet global need for effective, accessible, and affordable therapeutics.

Proceeds of the business combination and PIPE are expected to be used, among other things, to support Celularity’s research and clinical development programs, including:

CYNK-101 is Celularity’s lead therapeutic candidate based on its placental-derived genetically modified NK cells. CYNK-101 is an allogeneic, cryopreserved, off-the-shelf investigational cell therapy product with potential applications in hematological cancers and solid tumors as well as infectious disease. Celularity plans to submit its initial CYNK-101 investigational new drug (“IND”) application in the first half of 2021 to investigate CYNK-101 in combination with a monoclonal antibody (“mAb”) to target HER2+ cancers, such as gastric cancer. The Phase 1/2a clinical trial will commence in 2021.

CyCART-19 is a placental-derived T cell therapy engineered with a chimeric antigen receptor (“CAR”) that is cryopreserved, allogeneic and available off-the shelf to clinicians.  CyCART-19 is in development initially for the treatment of B-cell malignancies, targeting the CD19 receptor. Unlike adult peripheral blood mononuclear cell derived T cells, placental-derived T cells are mostly naïve (CD45RA+), expand readily ex vivo, express markers of stem cell memory and have lower expression of effector or exhaustion markers, allowing for greater proliferative potential in vivo. Celularity plans to file its initial CyCART-19 IND application and to commence a Phase 1/2a clinical trial in the first half of 2021.

CYNK-001 is a non-genetically modified NK cell therapy product being developed from placental hematopoietic stem cells as a potential treatment option for various hematologic cancers, solid tumors, and infectious disease. CYNK-001 is in development for the treatment of acute myeloid leukemia (“AML”), a blood cancer, and for glioblastoma multiforme (“GBM”), a solid tumor cancer, as well as COVID-19. CYNK-001 is currently in a Phase 1 trial (for AML and other blood cancers) and Phase 1/2a (for both GBM and COVID-19) clinical trials. Celularity plans to commence pivotal Phase 2 trials of CYNK-001 for the treatment of both AML and GBM in 2021.

APPL-001 is a placental-derived mesenchymal-like ASC being developed for the treatment of degenerative diseases, including Crohn’s disease. Celularity plans to submit an IND in the second half of 2021 and to commence a Phase 1/2a study of APPL-001 for the treatment of Crohn’s disease in 2022.

Celularity also plans to use the funding from the transaction to bolster the continued build-out of internal discovery capabilities, enhance business development activities and support general corporate activities.

Celularity’s current science is the product of over two decades of discovery, research, and development. Celularity has its roots in Anthrogenesis Corporation (“Anthrogenesis”), a company founded in 1998 by Dr. Hariri and acquired in 2002 by Celgene Corporation (“Celgene”). The team continued to hone its discoveries and expertise in the field of placental-derived cells at Celgene through August 2017, when Celularity, led by Dr. Hariri, acquired Anthrogenesis from Celgene.

Celularity benefits from Celgene’s twenty-plus years’ investment in developing technologies and capabilities to enable the manufacture cellular products at scale, with consistent and reliable quality.

Celularity has a robust global intellectual property portfolio comprised of over 1,500 patents and patent applications around the Celularity IMPACT platform, covering its processes, technologies, and key cell therapy programs. In 2020, Celularity completed construction of its 150,000 square foot purpose-built manufacturing and research facility located in Florham Park, New Jersey. This facility incorporates a world-class cGMP-ready manufacturing center, research and product development laboratories and biorepository, along with dedicated office space and space for shared services. Celularity’s facility includes nine Grade C/ISO-7 and six Grade D/ISO-8 manufacturing suites designed for the parallel commercial production of multiple cellular therapy products and advanced biomaterials.

The transaction will be effected pursuant to a merger of Celularity with a wholly owned subsidiary of GX Acquisition Corp. In the merger, outstanding shares of Celularity capital stock, options and warrants will be converted into shares of common stock, options and warrants, respectively, of the combined company at an implied Celularity equity value of $1.25 billion.

Ardea Partners LP is serving as lead financial advisor to Celularity. Morgan Stanley & Co. is also serving as a financial advisor. Truist Securities and Oppenheimer & Co. Inc. are acting as capital markets advisors to Celularity. Cooley LLP is serving as legal counsel to Celularity.

Credit Suisse is serving as lead capital markets advisor and lead private placement agent on the PIPE to GX Acquisition Corp.  Cantor Fitzgerald is also serving as capital markets advisor to GX Acquisition Corp. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to GX Acquisition Corp.