Clal Biotechnology Industries Ltd. (TASE: CBI) has signed a non-binding letter of intent to sell diabetes treatment developer Andromeda Biotech Ltd. to a US pharmaceutical company for an immediate payment of several million dollars. Future payments could reach hundreds of millions of dollars, if Andromeda meets development, registration, and sales milestones for its treatment of type 1 diabetes, Diapep277, and double-digit royalties on sales.
Clal Biotech, owns 96% of Andromeda, after acquiring Teva Pharmaceutical Industries Ltd.'s (NYSE: TEVA; TASE: TEVA) stake in the company earlier this week. Clal Biotech is controlled by Len Blavatnik's Access Industries Inc.
Clal Biotech acquired Teva's 16% of Andromeda for a future payment of $72 million, giving a company value of $450 million. Andromeda bought back Teva's rights to Diapep277 as part of the deal.
DiaPep277 is a unique peptide to prevent the destruction of insulin producing cells in the pancreas in type 1 diabetics. To date, there is no therapy that can prevent the destruction of insulin secreting beta cells. DiaPep277 is designed to treat type 1 diabetes patients with residual insulin secreting cells in order to preserve their function. It is currently undergoing two Phase III clinical trials. The first trial was successful and the results of the second trial are due by the end of the year. If successful, Andromeda can apply to market the drug.
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2014
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