Novartis takes a 15% stake in stem cell developer and an option to buy
This article was originally published in Scrip
Novartis is to invest $35m in stem cell therapy developer Gamida Cell in exchange for a 15% stake of the Israeli firm and an option to acquire the company.
Reports of Novartis's intentions towards Gamida Cell first surfaced in Israeli media during March, although Novartis declined to confirm its interest (scripintelligence.com, 18 March 2014).
It was left to Gamida Cell's parent company to officially disclose the terms of the deal.
"The option is exercisable, for a limited period of time, following Gamida Cell achieving certain milestones relating to the development of NiCord," said Elbit Imaging. "Gamida Cell estimates that these milestones will be met during 2015. In any event, the option, if not exercised, will expire in first half of 2016."
Gamida Cell is 30.8% owned by a subsidiary of Elbit Imaging, called Elbit Medical Technologies.
If Novartis exercises its option, it will pay a further $165m in cash, in addition to potential future payments which could reach a total of $435m, depending on certain development and regulatory milestones and sales of Gamida Cell's products.
Gamida Cell is currently conducting two Phase I/II trials of NiCord to treat patients suffering from hematologic malignancies such as leukemia and lymphoma and sickle cell disease. The company is developing a number of products based on platform technologies aimed at expanding functional cell populations. Its therapeutic products are allogeneic and contain adult stem cells extracted from umbilical cord blood, bone marrow and peripheral blood.
Gamida Cell's lead product is StemEx, a graft of stem/progenitor cells isolated and expanded from umbilical cord blood. It is in Phase II/III trials as a treatment for patients with high-risk leukemia and lymphoma, who could not find a family related matched bone marrow donor.
The company suffered a setback last year when the US FDA said that the ongoing Phase II/III trial of StemEx would not be sufficient to support a BLA filing, and advised Gamida Cell to conduct another randomized Phase III trial. The ongoing Phase II/III trial incorporates a historical cohort as the study control.
Gamida Cell's shareholders include Clal Biotechnology Industries, Teva Pharmaceutical Industries, Amgen, Denali Ventures, Auriga Ventures and Israel Healthcare Venture.
Novartis and stem cells
Novartis already has a significant interest in stem cell therapy. Last year it signed a licensing and research agreement with US biotech Regenerex for its novel cell therapy platform Facilitating Cell Therapy (FCRx). The technology utilizes hematopoietic stem cells and is being investigated by Regenerex in Phase II studies in living donor kidney transplantation. Financial terms were not disclosed.
Novartis has two other cell therapy compounds in clinical development.
HSC835 is a novel cell therapy approach that enables an expanded single umbilical cord blood derived hematopoietic stem cell transplant in patients with limited treatment options. HSC835 is currently in a Phase II trial in patients with high-risk hematological malignancies. A second cell therapy product, CTL019 is a chimeric antigen receptor T cell therapy currently in Phase II development in acute lymphoblastic leukemia (ALL) and chronic lymphocytic leukemia (CLL).