StemCells Inc. said Wednesday it received authorization to start a clinical trial of its purified stem cell therapy as a treatment for chronic spinal cord injury.
The company said the Food and Drug Administration approved its investigational new drug application, meaning StemCells can start testing the treatment on humans in the U.S. The trial started about a year ago and it currently includes a total of seven patients. Treatment is being administered in Switzerland and Canada.
The Newark, Calif., company is studying therapies based on purified adult neural stem cells. It calls the therapy HuCNS-SC, for human neural stem cells.
StemCells also said it plans raise $16.2 million by selling additional shares of stock and warrants. It will use the funds for general corporate purposes including working capital and product development. The company said it will issue 11.2 million units made up of one share and an option that will allow the buyers to acquire half a share at an exercise price of $1.80 per share. The units will cost $1.45 each. Underwriters have an option to buy an addition 1.7 million units.
Shares of StemCells fell 21 cents, or 12.5 percent, to $1.47 on Wednesday.
Stem cell therapies are still an experimental field, and StemCells is a small company without any approved products.