Clal Biotech to form $100m SPAC

Ofer Gonen

CEO Ofer Gonen: The aim is to invest in an Israeli company. Clal Biotech is also selling its Anatomy fund portfolio to Almeda Ventures.

Clal Biotechnology Industries (TASE: CBI) is once again making a new investment after several years in which it focused on its existing portfolio. This time, the company is turning to the current hot item on the stock market and is forming a SPAC (special purpose acquisition company). Clal Biotech also announced today that it would spin-off Anatomy, its medical technology funds.

In addition, the company declared a NIS 36 million dividend following the exits in 2020 from portfolio companies Cadent Therapeutics and Neon. In December, Cadent Therapeutics was sold to Novartis for an immediate payment of $210 million, with the possibility of further success-based payments of up to $770 million. US company Neon Therapeutics, in which Clal Biotechnology held a 4% stake, was merged into German company BioNTech, which became Pfizer's partner in developing a vaccine against Covid-19. Clal BNiotech sold its shares for $15 million, after investing a few million dollars only.

On top of all this, Clal Biotech announced a NIS 9.3 million share buyback program.

This morning, Clal Biotech was traded at a market cap of NIS 297 million, after a 178% rise in its share price over the past year.

The plan for the SPAC is to raise $100 million to be invested in a company valued at between $500 million and $1 billion. The company will probably be in pharmaceuticals, or, less likely, a digital health company connected to pharmaceuticals.

Clal Biotech CEO Ofer Gonen said, "We are setting up a special purpose acquisition company together with major partners in life sciences whose names cannot yet be disclosed. The target company will be in Israel. We estimate that there are about ten Israeli companies that could be suitable for a move like this and represent a unique opportunity for us, in contrast with players who set up an SPAC overseas and don't know these companies well, or aren't looking for an investment here."

The second step announced by Clal Biotech is the sale of the Anatomy funds to the Almeda Ventures partnership in exchange for shares. Almeda Ventures is a partnership for investment in digital health and medical devices that was floated on the Tel Aviv Stock Exchange in October last year and has a market cap of NIS 41 million. The partnership is managed by Tzahi Sultan, Dr. Irit Yaniv, and Dr. Amir Blatt.

Anatomy's portfolio will be transferred to Almeda Ventures, with the exception of Sight Diagnostics, a developer of rapid medical tests that raised $71 million last August. The partners in the Anatomy funds will receive participation units in Almeda Ventures worth NIS 17-20 million. Clal Biotech owns 50% of Anatomy, Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) owns 30% and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) owns 20%.

Almeda Ventures CEO Dr. Irit Yaniv said today that she had monitored Clal Biotech's portfolio companies for a year before the move was decided on. The deal brings Almeda new companies without initial financial investment, and also adds Clal Biotech and two important financial institutions as investors in the partnership, alongside The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), More Investment House and Excellence Investments Ltd. (TASE: EXCE), which are already invested in it.

Published by Globes, Israel business news - en.globes.co.il - on March 18, 2021

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