Clal Biotechnology Industries Ltd. (TASE: CBI) will invest NIS 15.5 million in the secondary offering by oncology drug development company Biocancell Therapeutics Ltd. (TASE:BICL), which is due soon on the basis of a shelf prospectus. Clal Biotech owns 49% of the company.
Last month, Biocancell announced that it plans to raise NIS 41 million at a minimum price of NIS 0.35 per share. Following the announcement, the share price rose over 5%, to today's price of NIS 0.52, giving a market cap of NIS 30.5 million. Clal Biotech's share price fell 1.5% today to NIS 11.56, giving a market cap of NIS 1.17 billion.
Biocancell had just NIS 1.4 million in cash at the end of June, and its auditors attached a going concern warning to its financial report for the second quarter. Clal Biotech took control of the company in August for $2.4 million (NIS 9.4 million) plus assuming its loans to Tikcro Technologies Ltd. (Bulletin Board: TKCRF) and royalties fund of the Hebrew University of Jerusalem. Clal Biotech also gave Biocancell a NIS 3 million bridge loan.
Clal Biotech had NIS 176 million in cash at the end of June. As subsidiary of Clal Industries and Investments Ltd. (TASE: CII), it is now controlled by Len Blavatnik's Access Industries Inc., which acquired 50% of Clal Industries from Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) in July.
Biocancell has announced that it is considering merging with Proteologics Ltd. (TASE: PRTL). An argument against a merger is that Proteologics has NIS 39 million in cash, while Biocancell has a going concern warning, and cash-hungry drug development program. If Biocancell's secondary offering goes ahead, it will come to the merger talks in a stronger position.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012