Cellular Products Inc., the loss-plagued Buffalo biotechnology firm that has been searching for a partner to help sell its blood-testing kits, has agreed to sell a 25 percent stake in the company to one of its Italian distributors.
Cellular Products, which has never turned a profit in seven years, has signed a letter of intent to sell nearly 4.5 million shares of its stock to Finsystems S.r.l., a Genoa, Italy-based firm that owns the Buffalo company's largest distributor.
The deal calls for Finsystems to pay $1.55 million, or about 36 cents a share, to acquire its stake in Cellular Products.
That price would be a substantial premium over the market value of Cellular Products stock, which was trading recently at 16 cents a share.
Richard A. Montagna, Cellular Products' president, said the deal will give the company the cash infusion it needs to market its products and develop new ones.
"We should not have any major needs (for capital) from here," Montagna said.
"It's like a rebirth of our company," Montagna said. "We felt we needed one more shot in the arm."
Cellular Products has been looking for a merger or marketing partner for nearly a year and a half because it lacks the resources to compete in the national market against powerful and established firms like Abbott Laboratories.
In addition, an unending string of losses pushed Cellular Products into severe financial problems last year, virtually wiping out its cash reserves and forcing the company to fall behind on a series of debt payments.