Quark Pharmaceuticals Inc. (formerly QBI), which attempted an IPO on the Tel Aviv Stock Exchange (TASE) and on Nasdaq in 2010, at a company value of $250 million, has operated beneath the radar in recent years. The company was considered extremely promising, in part due to its former top investor, Larry Ellison (Oracle founder), as well as joint development agreements that were signed with Pfizer and Novartis, that were potentially worth hundreds of millions of dollars.
Since the company decided not to hold an IPO, after not receiving the valuation it had hoped for, the Israeli company focused its energies inward, and rumors circulated about problems in its product pipeline. Now, it seems that the company was not stagnating, but that it in fact was implementing some rather interesting developments.
According to reports from the Japanese investment firm SBI Holdings, Quark became a unit of its fully-owned subsidiary about a year ago. The deal was carried out through a share swap between Quark and SBI Biotech, the biotech arm of SBI. When Quark’s 2010 prospectus was announced, SBI held 41% of the company. At the time, Larry Ellison held 25.6%, and, today, he probably no longer holds shares in Quark, but rather has holdings in the parent company, and it seems that Quark is no longer an Israeli company, despite the fact that it has an R&D center in the Nes Ziona Science Park, as well as in Colorado.
Sources inform ''Globes'' that following the merger with SBI, which is traded at 24.7 billion Yuan ($ 4 billion), the company channeled tens of millions of dollars to Quark for the development of their product pipeline. At the time of the merger, SBI stated that SBI Biotech, which includes Quark, as well as additional biotech operations, is considering an IPO in 2014.
Three leading products
The anticipated IPO might what has pushed Quark back into the spotlight. In recent weeks, Quark reported the establishment of two joint ventures - one in China and the other in India. The Chinese venture is a company that will be jointly held by Quark and by Chinese Souzhou Ribo Life Science CO.,LTD., and will receive $7.5 million, primarily from Chinese funds, led by BioVeda China. The venture will focus on developing Quark’s glaucoma treatment product, QPI-1007, for the Chinese market.
The Indian venture was established in collaboration with the Indian biotech company Biocon. The financial details of the venture have not been disclosed, however, it has been announced that the two companies will work to develop QPI-1007 for the Indian market.
Quark CEO Daniel Zurr declined to comment on the financial figures, but agreed to speak about the company’s product pipeline. Quark has three top products: QPI-1007, for the treatment of glaucoma, which is independently developed; another is being jointly developed with Pfizer (Pfizer made an up-front payment of $50 million for its development at the beginning of the last decade); and the third is being developed by Quark, and Novartis has an option of first refusal, for which it paid a few million dollars. Under the terms of both agreements, Quark is entitled to hundreds of millions of dollars should the products succeed.
The agreement with Pfizer is for a molecule to treat macular degeneration. The main trial is for macular degeneration caused by diabetes, and is in Phase IIB. “In this trial there were good results, but we decided to stop it in order to plan it a little differently, and, therefore, we expect results later than we had thought, in the first half of 2014,” says Zurr. The fact that the trial was stopped does raise concerns about the product, however, the company has decided to continue with another trial that is expected to cost many millions of dollars.
QPI-1007 recently completed Phases I/IIa clinical trials. The trial was a multi-site trial, held at multiple locations, including in the US. The company reported that the safety results were good, and the effectiveness results warranted further development. “The upcoming period will be interesting for us,” says Zurr.
Published by Globes [online], Israel business news - www.globes-online.com - on January 13, 2014
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