JERUSALEM Aug 19 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
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
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
Other Gamida shareholders include Clal Biotechnology
Industries, Teva Pharmaceutical Industries,
Amgen, Denali Ventures, Auriga Ventures and Israel Healthcare
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)