Gamida Cell, a stem cell medical technology startup, has received a buyout offer from an unidentified “global” pharmaceutical company that could reach into the hundreds of millions of dollars, Gamida Cell’s parent companies, Elbit Medical Technology and Clal Biotechnology, said on Tuesday.
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- Novartis Backs Out of $600 Million Purchase of Gamida Cell
“The Gamida Cell acquisition will include a substantial and immediate upfront payment and additional future payments in the area of hundreds of millions of dollars, contingent on milestones being met connected with development/licensing/sales of the drugs Gamida Cell develops,” Elbit Technologies and Clal Biotechnology said in a statement to the Tel Aviv Stock Exchange.
They stressed that no agreement had yet been signed and that it still required approvals from regulators as well as shareholders of the two companies.
While Clal Biotechnology did not provide further details about the offer, sources said the potential buyer was the Swiss pharmaceutical company Novartis and that it would include an up-front payment of more than $150 million, to be followed by additional payments the sources estimated would bring the total amount to as much as $550 million.
Shares of Clal Biotechnology, which owns 22% of Gamida Cell,rose 7% to close at 13.70 shekels ($3.96). Elbit Technology which has a 31% stake in the company, jumped 38.5% to close at 27 agorot.
Gamida Cell has two main products, both of which use enriched umbilical stem cell blood. One, StemEx, is for patients with blood malignancies such as leukemia and lymphomas. The other, Nicord, is for the treatment of non-malignant blood diseases such as sickle-cell anemia as well as autoimmune conditions.
Gamida Cell’s acquisition by Novartis would be a blow to Teva Pharmaceuticals, which had been a 50% partner in the development of StemEx. At the end of 2012, however, Teva dropped out of the venture after investing many tens of millions in dollars in it.
Teva, however, remains a shareholder. Other investors are the U.S. biotechnology company Amgen and the venture capital funds Denali Ventures, Auriga Ventures and Israel Healthcare Venture.