Novartis had signed an MOU for acquisition of the stem cell treatment company, Gamida Cell, for up to $600 million.
Elbit Medical Technologies and Clal Biotechnology Industries announced this morning that talks to sell stem cell cancer treatment developer Gamida Cell have broken down. Novartis had been in talks to acquire Gamida Cell for $200-300 million cash with the potential for a further three hundred million dollars in milestone payments and royalties. Sources inform “Globes” that Novartis decided not to approve the deal.
It is not clear what is Novartis’s reason for pulling out of the deal. Novartis had never publicly acknowledged that there were talks in the first place, although they had signed a memorandum of understanding including the exact financial conditions of the deal. It is unusual for a deal to reach such an advanced stage and not be realized, even though this was a very advanced deal and it was related to future strategic directions. The main casualties of the decision were Gamida Cell’s shareholders – Elbit Medical (30%) and Clal Biotechnology (22%).
Gamida Cell has proprietary technology for growing the number and density of stem cells within a specific blood sample. This capability could be a basis for all stem cell activity. The company seeks to enhance umbilical cord blood donations for implants to cure blood cancer in adults. Currently, umbilical cord blood can only be used for implant in people weighing less than 45 kilograms.
Gamida-Cell’s first product was jointly developed with Teva Pharmaceutical Industries but the US Food and Drug Administration (FDA) retroactively tightened clinical trial requirements rendering the product’s development uneconomical. The company is developing what it says is an improved product in the same field. The product is undergoing clinical trials, and because of its expected improved efficacy, justifies the high development cost.
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