IDB Holding Corp. Ltd. (TASE:IDBH) unit Clal Biotechnology Industries Ltd. (TASE: CBI) today published its financial report for the fourth quarter and full year of 2008. As is its wont, the report was characterized by poetic language by chairman Avi Fisher and CEO Reuben Krupik.
The chairman and CEO statement appended to the financial report states, "We are indeed on an ongoing climb up the mountain. Behind us is a steep slope, and many efforts are still ahead of us, but steadfastness and performance by the managements of the companies instills hope in us and encourages us to persist."
Clal Biotech posted a loss of NIS 76 million in 2008, 40% more than the loss in 2007. Most of the loss was due to investments in portfolio companies Andromeda Biotech Ltd., D Pharm Ltd., and MediWound Ltd., all of which are undergoing advanced trials of their products.
Clal Biotech had NIS 186 million in cash at the end of 2008, after spending NIS 52 million last year on current operations, NIS 20 million on investment, and NIS 5 million on sales of investments. Partners in Clal Biotech's portfolio companies have invested NIS 48 million altogether in them.
As a holding company that invests in projects with long time scales, Clal Biotech's loss is not the whole story. 2008 was a banner year in terms of progress by its main portfolio companies.
Andromeda, in which Clal Biotech owns a 95% stake, has made the most progress among the portfolio companies. In 2008, the company reported good interim results in the Phase III clinical trial of type 1 diabetes drug, after which Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) made a milestone investment in the company.
MediWound, in which Clal Biotech owns a 55.5% stake, moved forward in the Phase III clinical trial in Europe of its burn treatment product.
Cure Tech Ltd., in which Clal Biotech owns a 45% stake, reported progress in its Phase IIb clinical trial of a cancer treatment, in addition to the trial initiated the year before. Polyheal Ltd., in which Clal Biotech owns a 35% stake, achieved good results in the effectiveness trial for its treatment for chronic wounds, which will become part of a Phase II trial of the product.
None of Clal Biotech's advanced-stage portfolio companies reported failures in any clinical trial.
However, Clal Biotech could not find a partner for the clinical trial by D Pharm, in which Clal Biotech owns a 41% stake, for the company's stroke treatment. D Pharm has also not been able to sell the product, and it will therefore have to finance the Phase III clinical trial on its own. Stroke treatments are considered especially hazardous, which apparently explains the failure to find a patron. Nonetheless, the potential is vast; the stroke treatment market totals more than $1 billion a year. The clinical trial at more than 100 medical centers in the US, Europe, and Israel will cost tens of millions of dollars. The company has said that it will seek external financing for the trial, despite the state of the market, and the fact that it has plenty of capital.
To sum up, Clal Biotech has five portfolio companies in advanced clinical trials, two of which are already anchored with financing from Teva, provided that licensing procedure continues on schedule.
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2009
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