Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that the deal to sell its 53% controlling interest in CureTech to Israeli company InSight Innovations will not go through after InSight failed to make the agreed payments to Clal Biotechnology. Clal Biotechnology's market cap is NIS 498 million following a 10% surge in its share price in the past month, mostly a result of the IPO by Neon Therapeutics, in which Clal Biotechnology owns a 5% stake.
CureTech is developing an immunotherapy product for cancer. InSight, an Israeli company under Estonian ownership, was interested in acquiring the drug in order to develop generic biosimilars in the original drugs sector. InSight was to have paid $50 million immediately for CureTech and $550 million more in the event of success.
This is the third time that CureTech has been sold and been returned to Clal Biotechnology. CureTech's leading drug was first sold to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), but its development was delayed and Teva returned the product to Clal Biotechnology in 2012, following a restructuring in Teva. The product was again sold in 2014 to Medivation for an advance of $5 million and milestone payments and royalties that could have reached $245 million. Medivation was acquired by Pfizer in 2016, however, and CureTech paid $20 million, which will be returned from any future deal, to buy back the drug.
While CureTech was being batted around like a football, prominent competitors are working on the same mechanism, including Merck's bestselling drug Keytruda, which has been promoted in the market and achieved better results in leading indicators.
This is not the end for CureTech, because its product achieved especially good results for a rare type of brain cancer named BIPG. It can also be included in a cocktail of drugs together with other products. This is currently the leading approach in development of cancer treatments. Phase III clinical trials of the product for treatment of BIPG will start soon and CureTech will have to find either find funding for them or an alternative deal.
InSight's delay of its payment is not a good sign for the company. InSight, which has been operating since 1991, was sold a year ago to Estonian company PharmaEstica Manufacturing and its Israeli partner, Dr. Dobraslav Melamed, after the company previously went bankrupt. Once Melamed entered the company, its activity was renewed, but it shortly thereafter cut its staff.
Published by Globes [online], Israel business news - www.globes-online.com - on July 4, 2018
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