HSCI and Biofund RVC Signed an Investment Agreement

Human Stem Cell Institute – HSCI, OJSC, a Russian biotech company developing and implementing products and services in the field of cellular, genetic, and post-genomic technologies – announced signing an Investment Agreement with RVC Biofund.

The Agreement was signed in Moscow on February 17, 2014 with the aim to implement a project to create the network of healthcare centres Genetico in Russia to develop personalized health care based on the principle of individual approach to the prevention, diagnosis, and treatment of genetic diseases. The project also provides for the development of services of the bank of reproductive cells and tissues (personal storage and donation).

The project is implemented on the basis of the HSCI subsidiary – the Centre for Genetics and Regenerative Medicine at the Human Stem Cell Institute (CGRM HSCI, LLC) – a member of which Biofund RVC will be. Under the Agreement, the parties will jointly invest in the economic activities of the company in order to achieve the key financial indicators of the project.

The total funding of the project during the first two years will be 179.2 million rubles. The amount of funding from the HSCI will be 76.2 million rubles. These data do not include the non-monetary contribution to the design company from the HSCI. Non-monetary assets will be transferred by the HSCI to the design company under the report of an independent valuator. Information on the contribution amount will be disclosed as prescribed by the applicable law.

Artur Isaev, CEO of HSCI, OJSC, noted: "The mission of the Genetico project is to make the latest scientific achievements in the field of medical and reproductive genetics available to Russians, and thus increase the length and quality of their life. To implement this task, we use a unique comprehensive strategy. The strategy involves the creation and use of high-tech laboratory facilities, as well as development of a new generation network of health and genetic advice. The Genetico project is very important to us, and it is important that it will be implemented in partnership with the investment fund that has a good competence in biotechnology and high reputation in the investment environment."

According to Egor Beketov, Director of Biofund RVC: "Investment in CGRM will give a new impetus to the development of advanced healthcare and genetic technologies in Russia. According to their business model, CGRM will focus on active scientific cooperation and business partnership with biopharmaceutical companies developing products based on the knowledge of individual characteristics of a human body. Within such a service model, the developers can gain access to a wide range of competencies of CGRM – from ultra-high-tech infrastructure of the laboratory complex to a regional network of health and genetic advice centres."

The Investment Agreement signed between HSCI and Biofund RVC will enter into force after receiving a corporate approval in accordance with the applicable law.

For the purpose of approval of the transaction, by Resolution of the HSCI Board of Directors dated February 5, 2014, an Extraordinary General Meeting of Shareholders (EGM) was convened in the form of an absentee voting with ballots acceptance deadline on March 27, 2014.

Details of the transaction, as well as these of transactions related to the implementation of the Investment Agreement, will be contained in the ballot, as well as in the materials provided to the individuals entitled to attend the EGM within the statutory period.