REUTERS - Swiss drugmaker Novartis AG bought a 12.8 percent stake in Israeli biopharmaceutical company BioLineRX Ltd as part of a multi-year collaboration deal, BioLineRX said on Tuesday.
Under the agreement, Novartis, which invested an initial $10 million, will evaluate projects presented by BioLineRX for development and future licensing, the Israeli firm said in a statement. They hope to develop up to three clinical projects.
Novartis acquired an initial 5 million American depositary shares of BioLineRx in a private transaction at $2.00 a share.
The partnership will be transformative for BioLineRX, said Chief Executive Kinneret Savitsky, and will give Novartis, one of the world's largest pharmaceutical companies, access to Israeli research institutions, hospitals and biotech start-ups.
Once a project is selected, Novartis will pay BioLineRx an option fee of $5 million and fund half the remaining development costs in the form of an additional equity investment in BioLineRx.
The companies agreed to limit how big a share Novartis can buy of BioLineRX, but the amount was not disclosed, a BioLineRX spokeswoman said.
Novartis will have an exclusive right of first negotiation to license from BioLineRx each project.
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