Andromeda buyer charges misconduct
Trade in Clal Biotechnologies was halted yesterday after the company that bought subsidiary Andromeda Biotech, which is developing a treatment for Type 1 diabetes, announced it had discovered serious misconduct at the new acquisition. Hyperion Therapeutics said yesterday it would stop development of a diabetes drug following discovery of unlawful conduct by some Andromeda employees, sending its shares down 25% pre-market. Hyperion recovered during trade, closing down only 6%. The biopharmaceutical company is apparently looking to cancel the acquisition.
Clal Biotechnologies booked profits of 483 million shekels ($134 million) from Andromeda’s sale in June, a sum equal to 23% of its share capital. It may have to delete that profit now. The share fell 3.3% before trading was halted.
Some employees of Andromeda engaged in serious misconduct that involved receiving unblinded data from the trial, DIA-AID 1, and manipulating it to obtain a favorable result, said Hyperion. The company said additional evidence indicates that the employees of Andromeda, which is based in Israel, continued sharing and examining unblinded data from an ongoing DIA-AID 2 trial. “This new information leaves us with no viable regulatory path forward,” Hyperion CEO Donald Santel said in a statement. The drug, DiaPep277, was being tested to treat newly diagnosed Type 1 diabetes patients. (Yoram Gabison and Reuters)
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TASE follows European shares down
The Tel Aviv Stock Exchange closed with losses yesterday, following European shares downward. The blue-chip Tel Aviv-25 Index lost 0.2%, to close at 1,426 points, while the broader Tel Aviv-100 Index lost 0.3%, to close at 1,289 points. The Banks-5 gained a modest 0.1%. Notable shares included pharmaceuticals company Kamada, which lost 5%, and extracts manufacturer Frutarom, which gained 2.%. Total turnover was 1.15 billion shekels. Also yesterday, the TASE inaugurated its new building. (Eran Azran)