Clal Biotechnology Industries Ltd. (TASE: CBI) portfolio company MediWound Ltd., which is developing treatments for burns and chronic wounds, today closed a $20 million financing round at a valuation of $200 million, after money. The capital was raised from current shareholders, including Clal Biotech, and several Israeli investment institutions.
Clal Biotech invested $12.5 million in MediWound as part of the round, after which it owns 53.5% of the company. Clal Biotech's management company, Arte, also participated independently in the round. The investment will support the production and marketing of MediWound's burn treatment, NexoBrid,which has been approved in Europe. The company is seeking a partner to market the product, but prefers not to sell its rights to it. It intends to assume part of NexoBrid's manufacturing and marketing.
Gamida Cell is no longer material
In its recently published financial report for the second quarter of 2013, Clal Biotech posted a loss of NIS 57.8 million. Most of the loss was due to a NIS 18.2 million write-off on stem cell company Gamida Cell Ltd., and a revaluation in its books of diabetes treatment developer Andromeda Biotech Ltd.
Clal Biotech officially announced that Gamida Cell (in which it owns a 22% stake) has ceased to be a material company for it. This is because the US Food and Drug Administration (FDA) is demanding that Gamida Cell should conduct another trial of its leading product, StemEx. Clal Biotech stated, "There is little chance that this study will be carried out," since the cost does not justify the investment. Gamida Cell will now have to find a strategic partner or focus on another product.
Andromeda, which is conducting a Phase III clinical trial on its treatment for type 1 diabetes, has a going concern warning. Clal Biotech lent the company $2.1 million, and is waiting for financial compensation from Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) for the change in the agreement between the companies. Clal Biotech has enough cash to continue financing Andromeda if no other sources are found.
Clal Biotech also reported that portfolio company Curetech Ltd. (54%) will announce the results of its Phase IIb clinical trial of its colorectal cancer treatment during the third quarter.
10% pay cut
In addition to the financial report, Clal Biotech announced a 10% pay cut. The reduction is due to the far-reaching changes in the company's ownership in the past two years. It is still controlled by Clal Industries and Investments Ltd. (TASE: CII) and Teva, but Clal Industries has changed hands from IDB Holding Corp. Ltd. (TASE:IDBH) to Len Blavatnik's Access Industries Inc., while Teva, which invested both in Clal Biotech and in most of its late-stage portfolio companies, is gradually reducing its relations with the company as part of Teva's own restructuring, and has stopped financing most of the portfolio companies.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2013
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