Clal Bio Unit Plans $75m IPO in the U.S.

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MediWound, a Clal Biotechnology subsidiary that develops products for the treatment of severe burns and wound management, is in the process of trying to raise $75 million through an offering of 5 million shares of the company.

The shares represent 24.5% of the ownership in the company in which Clal Biotechnology currently has a 64% stake. MediWound gave its underwriters, led by Credit Suisse, an option for another 750,000 shares at the offering price, which at $14 to $16 per share, reflects a market cap for the company of $231 million before the offering and $317 million after, on the assumption that the underwriters exercise their over-allotment option for the additional shares.

MediWound’s flagship burn treatment product, NexoBrid, is based on enzymes derived from pineapple stems combined with a sterile gel. The product is placed directly on the burn and is used to remove burned tissue after four hours, in contrast to standard procedure which requires a wait of six days. MediWound received approval to market the product from European authorities and gave distribution rights to Teva Pharmaceutical Industries. Teva decided ultimately to abandon the venture and MediWound began selling it on its own in Germany in December.

MediWound’s prospectus reveals that the split with Teva was not a smooth one and that a dispute remains over MediWound’s claim that Teva had an obligation to provide funding of its own in connection with MediWound’s Polyheel product for the treatment of wounds. The dispute is expected to hold up the payment of royalties it owes Teva on sales of NexoBrid.

MediWound lost $15.4 million last year after it took over sales responsibilities from Teva and in the process increased its marketing costs to $2.2 million. The shift also created an accumulated loss of $47 million, and substantial losses on the company’s part are expected to continue.

In other developments in the biotechnology sector, Jerusalem-based BioLine RX, has wrapped up the pricing stage on the issuance of 8.4 million in American Depository Shares (each of which represents 10 ordinary shares) at $2.50 each for a total of $21 million. BioLine has also given its underwriters, Roth Capital and Maxim Group, a 30-day option to buy an additional 1.26 million American Depository Shares at an identical price. The price for the American Depository Shrares, a form of dollar-denominated equity share of a non-American company, is 14% lower than their market price.

BioLine has a number of products under development including a device known at BL-1040, which is designed to prevent major changes in the heart following a severe heart attack.

Enzymotec produces lipid-based compounds for nutrition and pharma.Credit: Reuters

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