Biotech company Kadimastem Ltd. (TASE: KDST) reported today that it had signed a memorandum of understanding (MoU) with Korean company Corestem for extensive strategic cooperation. As part of the agreement, Corestem will invest about $7 million in the Israeli company. Trade in Kadimastem shares was suspended since the opening, and it is now soaring on the Tel Aviv Stock Exchange.
As part of the cooperation agreement, the two companies will conduct joint clinical trials of Kadimastem's product AstroRX in Korea and the Asia-Pacific region. Corestem will also be responsible for regulation and receiving the necessary permits for patient treatment and marketing the company's products in the area. In addition, Corestem will gain exclusive rights to commercialize Kadimastem's ALS and diabetes products, for royalty payments, in the Asia-Pacific area (which includes Korea, Japan, China, Australia, Singapore, India and more). The companies intend to found a joint venture (JV) to pursue the development of new products.
It has also been decided that the market cap according to which investment is made will be determined before the final agreement is signed, as long as the share price reflects a market cap, before investment, of no less than $30 million and no more than $37 million. Moreover, the share price to be set in the agreement will be the average price in the period between the signing of the MoU and the signing of the final agreement. In addition, upon a $1 million investment in Corestem, Kadimastem will become a company shareholder.
Kadimastem develops an ALS and diabetes treatment and drug scanning and discovery services for multiple sclerosis. It is traded at a NIS 110 million market cap. The company announced that it is expected to launch its phase I/IIA clinical trial (product safety and efficacy in humans) in mid-2017, under the supervision of the Ministry of Health and with an outline coordinated with the FDA. The trial will include about 21 patients, and be conducted at the Hadassah Ein Kerem Hospital neurological department, one of the world's leading ALS treatment facilities.
Corestem was founded in 2003 and deals with research, development and marketing of stem cell-based technologies in the field of cell therapy. It currently markets the ALS drug Neuronata-R. The company's portfolio has further products for treatment of lupus, degenerative arthritis and more. In 2015, it listed for trade on the Korea Stock Exchange.
Kadimastem believes that synergy between the companies will help accelerate its entry into the international market and make the Kadimastem - Corestem joint venture a world leader in innovative treatment of chronic illnesses, specifically ALS and diabetes.
Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2016
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