Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that Teva will exercise its option to invest an additional $10.5 million in CBI portfolio company Andromeda Biotech Ltd. at a company value of $100 million.
Andromeda is developing Diapep277 for the treatment of type 1 diabetes (juvenile-onset diabetes). The drug is undergoing Phase III clinical trial under the auspices of the European Medicines Agency (EMEA). Diapep277 was developed by German firm DeveloGen AG (XETRA: DE915), which merged with Israel's Peptor. CBI bought DiaPep277 from DeveloGen (Israel) and founded Andromeda to develop it.
Teva subsequently signed an agreement with Andromeda to invest tens of millions of dollars in the company in stages on the basis of milestones. Teva invested $3 million following the interim clinical trial report on Diapep277, and currently owns 3% of Andromeda; this is Teva's second investment in the company.
The current investment was made after Andromeda achieved good results in the Phase III clinical trial. The next milestone will be when Andromeda obtains marketing approval for Diapep277 in the EU. At that point, Teva has the right to invest an additional $44 million in Andromeda at a company value of $480 million.
Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) unit CBI said that it will report a NIS 65 million capital gain and that it would own 90% of Andromeda when the investment was completed. CBI's share jumped 24% by mid-afternoon to NIS 4.96. Teva rose 4% on Nasdaq yesterday to $45.78, and it rose 4% on the TASE to NIS 187.10.
Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2009
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