JERUSALEM Aug 19 (Reuters) - Swiss drugmaker Novartis has agreed to take a 15 percent stake in Gamida Cell, an Israeli developer of stem cell therapies, in a deal that could reach more than $600 million, Gamida's parent said on Tuesday.
Under the agreement, Novartis would immediately invest $35 million in Gamida for the stake and receive an option to fully acquire the company, parent Elbit Imaging said.
Gamida Cell is 30.8 percent owned by Elbit Medical Technologies, while Elbit Medical is 86 percent owned by Elbit Imaging.
Novartis' buyout option is linked to Gamida Cell achieving certain milestones relating to the development of NiCord, which Gamida cell estimates will be met in 2015. The option expires in the first half of 2016.
Gamida Cell is currently conducting two Phase I/II trials of NiCord to treat patients suffering from haematologic malignancies such as leukaemia and lymphoma and sickle cell disease.
Should the option be exercised, Novartis would pay shareholders $165 million in cash while potential future payments could reach another $435 million depending on certain development an regulatory milestones and on sales of Gamida Cell's products.
Other Gamida shareholders include Clal Biotechnology Industries, Teva Pharmaceutical Industries, Amgen, Denali Ventures, Auriga Ventures and Israel Healthcare Venture.
Following completion of the deal and prior to the exercise of the option, Elbit Medical's stake in Gamida Cell would drop to 24.7 percent.
In March, Elbit Medical said it had received a buyout offer from an unnamed global pharmaceutical firm, which Israeli media identified as Novartis. But in May, it said the talks had been terminated. (Reporting by Steven Scheer; Editing by Alison Williams)