Biotech start-up reportedly on verge of $600m deal

Gamida, a stem-cell technology developer, is just one example of Israel’s biotechnology prowess, say experts

A preservation lab in a hospital used for stem cell research (Photo credit: Margalit Slovin/Flash90)
A preservation lab in a hospital used for stem cell research (Photo credit: Margalit Slovin/Flash90)

 According to two shareholders in the company, Jerusalem biotech start-up Gamida Cell, a developer of stem cell therapies, has received a large buyout offer from a global pharmaceutical giant. The shareholders – Elbit Medical Technologies, which has a 30.8% share in Gamida, and Clal Biotechnology Industries, with a 22% share, informed the Tel Aviv Stock Exchange of the impending deal.

The name of Gamida’s potential buyer and the amount being offered were not disclosed. According to reports in the Israeli media, Gamida’s suitor is Switzerland’s Novartis, one of the largest pharmaceutical companies in the world — and the amount of money being offered is as much as $600 million.

Gamida technology is based on using umbilical cord blood (a “non-controversial” stem cell source, the company said) to develop therapies for blood cancers such as leukemia, lymphoma, as well as for solid tumors, autoimmune diseases, sickle cell disease, and others. The company’s first product, StemEx, an alternative therapy for blood cancer patients who cannot find a compatible bone-marrow donor, has successfully completed an international Phase II/III clinical trial.

A spokesperson for Gamida said that nothing has been confirmed yet. “I haven’t heard anything beyond what Elbit and Clal reported to the TASE,” she said.

Gamida is just another example of Israel’s prowess in the biotech sector — specifically the stem cell sector, an area Israel excels in, said Ruti Alon, managing director of healthcare investments at Pitango Venture Capital. Israel is ahead of just about every country in stem cell research, Alon said. “For years, many countries, especially the United States, proceeded very slowly with stem cell research, while Israel continued with research,” she said. “As a result, Israeli companies are among the world’s most advanced in the field.”

Another Israeli start-up making its mark in stem-cell research is Pluristem, which is setting up a facility to mass-produce stem cells for use in treating injuries. Pluristem’s Placental Expanded (PLX) stem cell products, derived from human placenta, will be produced in a large facility in northern Israel. The cells, said the company, will constitute “a drug delivery platform that releases a cocktail of therapeutic proteins in response to a host of local and systemic inflammatory and ischemic diseases.” Those proteins, injected into the area of the injury, have been shown to greatly enhance cell repair, Pluristem, said, pointing to the recent successful results of a major clinical trial.

With such a track record of biotech success, Israel has attracted great interest among pharmaceutical firms to enter into partnerships with its universities, biotech firms, and bio-industry start-ups. In 2012, for example, Merck Serono opened an incubator for Israeli biotech firms. The company, according to its Israeli representative Inter-Pharm, is working with Israeli start-ups “to develop new products based on their technologies and ability to bring the products to market,” especially in the areas of oncology, neurodegenerative diseases, rheumatology, fertility and endocrinology.

The incubator, said Inter-Pharm CEO Regine Shevach, is “a real opportunity for Israeli companies with breakthrough technologies to move forward to development and discovery of new pharmaceutical products.”

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