Swiss pharmaceutical firm Novartis has signed a deal to acquire 12.8% of Israeli drug development firm BiolineRX. Under the arrangement, Novartis will invest $10 million in Jerusalem-based company, developing and commercializing drugs developed in Israel.
Under the deal, Novartis and BioLineRx will jointly evaluate both clinical and pre-clinical stage projects presented by BioLineRx, with Novartis deciding which projects to develop further. Upon selection of a project, Novartis will pay BioLineRx an option fee of $5 million, as well as fund 50% 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. The contract calls for up to three projects to be funded in this manner.
Working with university labs and independent developers who don’t have the financial resources to continue through until the product is ready for FDA approval, BiolineRX has licensed dozens of projects, raising tens of millions of dollars to bring promising drugs to market, said company CFO Phil Serlin. “What many projects need is for someone to shepherd them through the middle stage – from initial proof of concept to a point where a pharmaceutical company could conceivably take a product to market after testing, and that’s what BiolineRX does.”
Not all pharma companies can afford to wait the 10 to 14 years it often takes to bring an idea to market, said Serlin. “It’s expensive and risky to wait that long. New technology or discoveries could make a drug or treatment obsolete in the middle of the development process, and government regulations could change the economic viability of a drug.” Thus, a university tech transfer firm might have a great project but be unable to find a pharmaceutical company interested in investing.
“Usually we take a project that has been proven to work in the lab, on animals, and work with the developer, funding it and shopping it around until phase 2 tests show that the product is safe for humans,” said Serlin. “At that point it is ready for phase 3 tests – the ones that will pass FDA and EMEA muster. That’s when we bring a pharmaceutical company into the picture, because at that time they’re more willing to take on the risk.” Among the drugs currently under development are treatments for acute myocardial infarction, celiac disease, hepatitis C, diabetes, and asthma.
Dr. Kinneret Savitsky, CEO of BioLineRx, said that the arrangement with Novartis “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. 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.”