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CytoBioscience to Merge with Skyline Medical
August 1, 2017

CytoBioscience CEO James Garvin said a merger with Minnesota-based Skyline Medical Inc. won't cause the company to give up its brand identity or its San Antonio home. The two companies expect to expand their reach and their revenues by joining forces.

W. Scott Bailey
Reporter/Project Coordinator
San Antonio Business Journal

CytoBioscience Inc., one of San Antonio's more promising biotech companies, has made a move that could expand its platform of work, its physical reach and its international exposure. The company has signed a binding letter of intent to merge with Skyline Medical Inc., a publicly traded company based in Minnesota's Twin Cities area.

It's another bold move by CytoBioscience CEO James Garvin, who brought the company from Germany to San Antonio in 2015. The convergence of CytoBioscience and Skyline Medical, through their combined relationships in the biotech sector in the U.S. and abroad, is expected to significantly increase the potential client base and revenue opportunities for both entities.

CytoBioscience develops and manufactures devices used in human cell research. It also conducts contract research focused on new therapeutic drug development.

Skyline Medical [NASDAQ: SKLN], meanwhile, produces a fully automated, patented and FDA-cleared waste fluid disposal system that eliminates most staff exposure to blood, irrigation fluid and other potentially infectious fluids found in the medical environment.

"We knew we were looking for a strategic partnership. But it was important to find the right one," Garvin told me. "Through a series of conversations and inquiries, we were able to begin to focus on Skyline. We met the team. We really liked them and liked what they are trying to do, liked the space they were in and felt it was complementary. So we really began to pursue how this could be a win for both companies."

It was an investment banker with Dawson James Securities Inc., David Weinstein, who helped bring the two companies together.

"I had given David Weinstein instructions several months ago that we needed to broaden our footprint. So he was in the hunt," said Skyline Medical CEO Carl Schwartz.

That search ultimately led to San Antonio and to CytoBioscience.

"We could expand our footprint. They could hopefully tap our NASDAQ exposure," Schwartz said. "We could be much stronger as their contacts would help us and our contacts would help them."

Weinstein said it's a unique pairing as both CytoBioscience and Skyline Medical have patent-protected and best-of-class technologies in separate areas, but also a common link as each have a focus on the medical device arena.

"They are both at a unique phase in their commercialization where they are breaking out at the same time," Weinstein said. "What I saw as a banker is that, as both companies achieve milestone sales resonating through a public vehicle, they are going to attract even more sales through companies that were unaware of their technologies."

CytoBioscience, which previously operated as CytoCentrics, was based in Rostock, Germany. Since relocating its headquarters to San Antonio, the company, under Garvin, has changed its name, expanded its product platform, added key partnerships and purchased an Alabama company called Soluble Therapeutics with the intent of moving its operations to San Antonio.
Now, Garvin has taken CytoBioscience to the cusp of a merger that could prove to be one of its biggest moves to date.

"There's years behind what Skyline is attempting to do. There's years behind what we are attempting to do," Garvin said. "Now, we can take those joint years of experience and figure out how to advance this for both of us."

Sklyine Medical Chief Financial Officer Bob Myers, who was also instrumental in getting the two companies to this point in the merger process, said he is intrigued by the opportunity to pursue more business in Texas, where the Minnesota company has a sales manager already in place

"We are really hoping she can work closely with [Garvin] and his connections to expand our presence in Texas and in the San Antonio area, which has become such a big medical device market," Myers said.

The merger is expected to close by September 30. And CytoBioscience has no plans to give up its brand identity or its San Antonio home once the deal is done.

"This is good for us and it's good for San Antonio," Garvin said. "It's good for Skyline."

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