December 16, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
The world of Israeli biotech is celebrating a major deal Tuesday, after Novartis said it would take a 12.8 percent stake in Jerusalem-based clinical stage biopharma BioLineRx Ltd. for $10 million. The two companies said that under the terms of the deal, they will enter into a multi-year strategic collaboration agreement for pre-clinical and early clinical therapeutic projects through clinical proof-of-concept.
The deal is a significant move toward establishing a larger global footprint in the region for international pharmaceutical companies looking to get a piece of the development and commercialization of Israeli-sourced drug candidates.
BioLineRx’s is perhaps best known for its experimental heart drug, BL-1040, a therapy designed to prevent pathological cardiac remodeling following a myocardial infarction. That drug has already been out-licensed to Bellerophon BCM (f/k/a Ikaria) and is in the midst of a pivotal CE-Mark registration trial. BioLineRx has also seen some success with cancer drug BL-8040, which is in the midst of a Phase 2 study for acute myeloid leukemia (AML) as well as a Phase 1 study for stem cell mobilization; and BL-7010 for celiac disease, which has completed a Phase 1/2 study.
Locally, BioLineRx is a good fit for any global company looking to make inroads to Israel’s vast technological resources and skilled life sciences workforce. The company is well known in the biotech and medical communities in Israel, and has what it described as “close and long-lasting ties” with academic institutions, hospitals and biomedical companies in Israel, as well as rumored collaboration with the massive Israeli military complex.
The new partnership is a good fit for the company, said its Chief Executive Kinneret Savitsky in a statement.
“This is a transformative collaboration for BioLineRx. Recognition by Novartis, the global leader for innovative therapeutics, is a further validation of our drug development capabilities, our business model, and our strong track record of selecting the most promising innovative therapeutic programs stemming from Israel’s leading research institutions and biotech start-ups, and developing them towards commercialization,” she said.
“Working closely with Novartis at relatively early stages of project development will enable us to tailor our development processes to meet their needs and expectations, helping to ensure agreed upon clinical goals are met successfully.”
Under the terms of the agreement, Novartis acquired an initial 5,000,000 American Depositary Shares of BioLineRx in a private transaction at a price of $2 per share. Under the terms of the agreement, Novartis and BioLineRx will cooperate together on clinical and pre-clinical stage projects presented by BioLineRx presented via a Joint Steering Committee.
Projects at or reaching the clinical stage will be eligible for selection by Novartis, at which point Novartis will pay BioLineRx an option fee of $5 million, as well as fund 50 percent of the anticipated remaining development costs associated with establishing clinical proof-of-concept, in the form of an additional equity investment in BioLineRx.
“Novartis will have an exclusive right of first negotiation to license from BioLineRx each selected project upon establishment of clinical proof-of-concept,” said the company in a statement, adding that currently the two firms intend to develop up to three programs pursuant to this collaboration.
