Clal Biotechnology Industries said its subsidiary Andromeda Biotech is in talks to be sold to an American pharmaceutical company for a price that could reach hundreds of millions of dollars.
Andromeda signed a nonbinding memorandum of understanding to be sold to the unnamed firm, Clal Biotechnology, which owns 96% of Andromeda, said in a statement to the Tel Aviv Stock Exchange on Wednesday. Clal Biotechnology, a subsidiary of Clal Industries, said the talks are at an early stage.
The price will include an up-front payment and future milestone payments related to the development and sales of DiaPep277, the Type I diabetes treatment Andromeda is developing. The payment will also include double-digit royalties from future sales.
Two days ago Teva Pharmaceutical Industries, the world’s biggest generic drugmaker, transferred its rights in DiaPep277 and all of its shares in Andromeda to Andromeda for $72 million. Teva’s rights in the drug may have been an obstacle to Andromeda’s anticipated sale. The deal values Andromeda at $450 million.
DiaPep277 is in advanced Phase III trials in more than 100 medical centers in North America, Europe, Israel and Argentina. The main goal of the study is to preserve the ability of the pancreas to secrete insulin in patients who receive treatment with DiaPep277.
Andromeda announced positive preliminary results in its Phase III study in June.
“Patients who were treated with the drug for four years from the time of diagnosis demonstrated a better ability to secrete insulin as compared to patients who started treatment after a period of more than two years from diagnosis showing a relative treatment effect of 30,” the company announced.
“In addition, these patients maintained better glycemic control compared to the patients treated for two years. In the patients who were treated for four years, the average HbA1c level was 7.0% compared to 7.6% in the patients who were treated for two years. The rate of hypoglycemic events and the mean amplitude glucose excursion were lower in the patients who were treated for four years.”
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