SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): November 18,
2009
NEOSTEM,
INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
(State
or Other Jurisdiction of Incorporation)
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0-10909
(Commission
File
Number)
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22-2343568
(IRS
Employer Identification No.)
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420 Lexington Avenue, Suite
450, New York, New York 10170
(Address
of Principal Executive Offices)(Zip Code)
(212)
584-4180
Registrant's
Telephone Number
Check
the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2.
below):
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o
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
7.01.
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Regulation
FD.
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NeoStem,
Inc. (the "Company") is furnishing herewith as Exhibit 99.1 a letter addressed
to its stockholders.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits
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Exhibit Number
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Description
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99.1
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Letter
to Stockholders dated November 18,
2009
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2
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, NeoStem has duly caused this Report to be
signed on its behalf by the undersigned hereunto duly authorized.
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NEOSTEM,
INC.
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By:
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/s/
Catherine M. Vaczy
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Name:
Catherine M. Vaczy
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Title:
Vice President and General Counsel
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Date: November 19, 2009
3
November
18, 2009
Dear
Fellow Shareholders:
The
completion on October 30, 2009 of our merger with China BioPharmaceuticals
Holdings, Inc. is a major milestone and accomplishment for NeoStem. The
net effect of the merger is our acquisition of a controlling 51% interest in
Suzhou Erye Pharmaceuticals (“Erye”), a China-based pharmaceutical company with
revenues on track to exceed $60 million in 2009. This marks our
transition to being a vertically integrated, biopharmaceutical development and
distribution company with an effective platform for significant growth in China,
which is one of the world’s most dynamic consumer markets. I intend to use
this letter to our shareholders to clarify NeoStem's near term and long term
business strategies.
NeoStem
has evolved from its beginnings as a one-dimensional healthcare services company
with nominal revenues to a multi-dimensional biopharmaceutical company with
state-of-the-art capabilities in stem cell collection, processing,
cryopreservation, and therapeutic development and pharmaceutical drug
development and distribution, with significant revenues.
Erye is
expanding its research, development and distribution capabilities, and is on
track to become one of the largest antibiotic producers in Eastern
China.
The
acquisition of Erye provides us a pharmaceutical distribution system in one of
the world's fastest growing consumer markets and we anticipate Erye’s recent
robust sales and earnings growth to continue. Earlier this year, the
Chinese government announced that improving the healthcare for its citizens is a
major priority and, according to Forbes.com, China’s State
Council has approved the spending of $124 billion on its healthcare system
between 2009 and 2011. Owning a controlling interest in one of the
largest antibiotic producers/distributors in China positions us to take
advantage of this growth with products we develop in China and products we
develop or license in the US for manufacturing and distribution in China.
Given our size and distribution capabilities, any significant product
acquisition or development could accelerate our revenue
growth.
While
NeoStem will continue to offer through Erye traditional pharmaceutical products,
we will advance our research and development activities in the US and China
focused on stem cell-based therapies beyond hematologic malignancies which have
been used therapeutically for over 40 years. The Chinese market
for adult stem cell therapies is more advanced than in the US and we look
forward to the expansion of these revenue opportunities.
We
believe that our revenues and profitability will reflect our growth from a
service company to a fully integrated international biopharmaceutical company
and that this will produce a positive response in the investor
market.
NeoStem’s
market capitalization has increased since the closing of the merger by
approximately $40 million to a market capitalization of approximately $59
million as of the writing of this letter. Although the merger
resulted in a dilution of the management team’s equity ownership of NeoStem, the
team retains a significant stake in NeoStem’s continuing success and remains
aligned with your interests as shareholders. We believe the future
for NeoStem is very bright, remain committed to growing the value of your
NeoStem holdings and want you to know that we appreciate your continuing
support. I look forward to updating you further in the near future with progress
on many of the exciting new initiatives that we have launched in the
pharmaceutical and stem cell therapies sectors, both in the US and China.
Robin
Smith, MD, MBA
CEO
Forward-Looking
Statements
This
letter contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements reflect
management's current expectations, as of the date of this letter, and involve
certain risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of various factors. Factors that could cause future results to materially
differ from the recent results or those projected in forward-looking statements
include the "Risk Factors" described in the Company's Registration Statement on
Form S-4/A filed with the Commission on October 6, 2009 as well as periodic
filings made with the Securities and Exchange Commission. The Company's further
development is highly dependent on future medical, research and product
development and market acceptance, which is outside its control.
420
Lexington Avenue │ Suite 450 │ NYC│ 10170 │ Phone: (212) 584-4180 │ Fax: (646)
514-7787
www.neostem.com