US Kalytera buys Israel medical cannabis firm Talent for over $10m

Startup studies cannabidiol treatment for deadly complication of stem cell or bone marrow transplants

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

An Israeli woman works at the Tikkun Olam medical cannabis farm. (photo credit: AP)
An Israeli woman works at the Tikkun Olam medical cannabis farm. (photo credit: AP)

US firm Kalytera Therapeutics, Inc. said it has completed the acquisition of Talent Biotechs Ltd, a privately held Israeli company that develops cannabis-based therapies for medical needs, for over $10 million.

Talent is currently studying the use of cannabidiol (CBD) — an antioxidant extracted from the cannabis plant — to prevent and treat Graft versus Host Disease (GvHD), a life-threatening condition that can occur after stem cell or bone marrow transplantation. Kalytera, whose shares are traded on the TSX Venture Exchange in Canada, is a developer of CBD therapeutics. Dr. Raphael Meshchloum, an Israeli researcher and pioneer in the field of cannabis research, is co-chair of Kalytera’s Scientific Advisory Board.

GvHD is a rare disease that can arise following hematopoietic stem cell transplantation (HCT), a procedure in which the stem cells of the bone marrow or peripheral blood of a donor are transplanted into a new host after chemotherapy or radiation. While HCT is a lifesaving procedure for many diseases of the blood and bone marrow including leukemia and Hodgkin and non-Hodgkin lymphoma, it poses dangerous side effects, including infection and GvHD. GvHD is a major cause of illness and death following HCT.

CBD is a non-psychoactive antioxidant extracted from the cannabis plant that is rapidly gaining importance due to its numerous benefits to humans’ overall well-being. Unlike THC, which is the part of the cannabis leaf that makes you high, CBD is a nontoxic, anti-inflammatory substance that is very well tolerated by the body with few side effects, researchers say. Because of its anti-inflammatory and immunosuppressive properties, CBD has shown benefit in many types of inflammatory diseases including diabetes, rheumatoid arthritis, multiple sclerosis, and inflammatory bowel disease.

An Israeli agricultural engineer inspects marijuana plants at the BOL (Breath Of Life) Pharma greenhouse in the country's second-largest medical cannabis plantation, near Kfar Pines in northern Israel, on March 9, 2016. (Jack Guez/AFP)
An Israeli agricultural engineer inspects marijuana plants at the BOL (Breath Of Life) Pharma greenhouse in the country’s second-largest medical cannabis plantation, near Kfar Pines in northern Israel, on March 9, 2016. (Jack Guez/AFP)

“There are currently few options to prevent or treat persons with GvHD, a large and critically underserved market,” said Andrew Salzman, Kalytera’s Chief Executive Officer in a statement. Kalytera will continue Talent’s “groundbreaking work in GvHD,” he said.

“The results of Talent’s Phase 2 clinical studies are unprecedented, and mark a major milestone in the potential prevention and treatment of this severe and life-threatening disease. We are encouraged by the data and seek to rapidly advance the GvHD program into FDA Phase 2b clinical studies.”

The 2015 results of a Phase 2 research conducted by Talent showed that adults who were treated with CBD before and after stem cell or bone marrow transplant didn’t develop Acute GvHD, and the risk of developing Acute GvHD by day 100 was decreased. Patients also had fewer skin and gastrointestinal issues compared to the control group and the CBD treatment was found to be safe and well tolerated.

Kalytera will provide a combination of cash, securities, and future contingent payments to Talent, the company said in a statement. To date, Kalytera’s cash payments to Talent have totaled $10 million.

“Multiple studies have demonstrated that CBD, a non-psychoactive cannabis constituent, possesses remarkable therapeutic potential across a broad range of diseases and disorders,” said Robert Farrell, President, COO, and CFO of Kalytera. “The acquisition of Talent and its late-stage GvHD program significantly advances Kalytera’s position as an emerging leader in CBD pharmaceuticals. We expect our work in GvHD to be the first of many programs that seek to investigate and commercialize this important compound.”

Talent was founded by Dr. Moshe Yeshurun, the director of the Bone Marrow Transplantation Department at the Rabin Medical Center, Beilinson Hospital in Petah Tikva. The company completed its two clinical trials at the Rabin Medical Center.

Kalytera now plans to initiate placebo-controlled, double blind, randomized studies of CBD for both the prevention and treatment of GvHD, the statement said. These clinical studies may support US Food and Drug Administration breakthrough therapy and fast track designations, which could accelerate the regulatory approval process.

The international medical cannabis market is forecast to be worth approximately $20 billion within a decade, and some 1% of the global population are estimated to become potential medical cannabis users at some point during their lifetime.

Israel is well-known as a pioneer in medical cannabis. Last summer, the government approved a plan initiated by Health Minister Yaakov Litzman to relax some of the medical cannabis requirements. The plan aims to expand the number of doctors who can issue cannabis prescriptions, remove limits on the number of marijuana growers, make cannabis available at approved pharmacies, and possibly eliminate the requirement for a permit from the Health Ministry so that just a doctor’s prescription will be sufficient.

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