There was more good news for Israel's biotech industry today as Clal Biotechnology Industries Ltd. (TASE: CBI) portfolio company MediWound Ltd. announced that it had obtained positive interim results from the Phase III clinical trial of its Debrase gel dressing for the treatment of burn wounds. The news follows hard on the heels of Protalix Biotherapeutics Inc. (AMEX:PLX) Phase III clinical trial success announced last Thursday on its treatment for Gaucher's disease.
The global market for MediWound's product is estimated at $300 million annually.
MediWound's results were all the more impressive because they were only meant to be intermediary results. They were so good that the European Medicines Agency (EMEA) has allowed MediWound to forego continuation of the trial and already apply to register the treatment. This means a saving in expenditure and a shorter time to market and that MediWound will be in a position to file for EMEA approval in early 2010.
This is great news for all MediWound's shareholders including IDB Holding Corp. Ltd. (TASE:IDBH) unit Clal Biotech which owns 56% of MediWound and Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), which owns 12%, and could be the big long-term winner of MediWound's success. Other major shareholders include Prof. Lior Rosenberg (12%), Migdal Insurance and Financial Holdings Ltd. (TASE:MGDL (6%), Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) (6%) and Polar Communications Ltd. (TASE: PLRC) (4%).
MediWound's product is a cocktail of enzymes produced from a variety of pineapple, which distinguishes between healthy skin tissue and burnt tissue. When MediWound's ointment is spread on the burn wound the burnt tissue disappears within four hours and only the open wound remains.
MediWound, managed by Gal Cohen, has a strategic marketing agreement with Teva, which will increase its holding in the company to 25%, if EMEA does grant approval in 18 months. Teva will buy the additional share at a company value of $200-250 million.
If Teva wants to increase its option it will buy shares at a company value of $250 million. But if it does not want to take up its option, shareholders can still compel Teva to buy at a company value of $200 million.
Moreover, if and when MediWound receives US Food and Drug Administration (FDA) marketing approval for the treatment, Teva will have the option to increase its stake in the company to 51% at a company value of $245-300 million.
And if everything goes according to plan and MediWound begin manufacturing the Debrase gel dressing, and Teva begins marketing the product worldwide, then Teva will have the option to acquire full control of the company for $500 million.
That is a lot of milestones, but today's announcement is a huge step towards achieving global success.
Most of Mediwound's investors are already counting their profits. CBI invested just $14 million for its 55% stake, while Migdal and Harel bought their stakes at a company value of just $100 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2009
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