Novartis to invest on Gamida Cell for stem cell therapy

Swiss pharmaceutical company Novartis will be putting in an additional $15 million into the Israeli company Gamida Cell. This major financial move gives the multinational company an additional 2.5 percent stake in the stem cell company.

According to Jewish Business News, Gamida Cell develops immune therapies and cellular treatments for a number of orphan genetic diseases and cancer, among others.

Reuters states that this latest investment in Gamida Cells will be used to support the development of NiCord and several other clinical programs. NiCord is designed to help treat several types of blood cancers including sickle cell disease, lymphoma and leukemia.

The Daily Times Gazette states that Phase III of NiCord's clinical trials will commence in the middle of next year.

According to the Jewish business publication, NiCord uses Gamida Cell's own NAM technology in augmenting the immune modulatory cells and stem cells taken from a single cord blood unit.

Novartis has the option of buying Gamida Cell for a deal amounting to almost $600 million. The buyout option is set to expire in 2016, according to Reuters.

Under the current agreement, Novartis is expected to directly invest $5 million for an additional 2.5 percent stake in the company. The Daily Times Gazette reports that the last $10 million will be used to fund Gamida Cell's clinical trials, which includes the late stage development of NiCord.

This amount is still subject to the terms and conditions of equity financing in 2017, according to the publication.

Jewish Business News reveals that Novartis has already invested a total of $35 million in August 2014 in exchange for a 15-percent equity interest in the stem cell company. However, as part of the agreement, Novartis will not be given any rights or options to any of Gamida Cell's technology or products.

As quoted in Globes, CEO Yael Margolin of Gamida Cell said, "We are very pleased to receive continued support from Novartis. This support is testament to the potential of Gamida Cell's immune therapy platform and its potential to improve outcomes for patients with diseases like leukemia and lymphoma who need a bone marrow transplant but who do not have a matched related donor."

As a result of this recent investment by Novartis, Elbit Medical Technologies will be left with a 22.5 percent stake while Clal Biotechnology Industries Ltd. will have 18 percent stake in the company, Globe stated in their report that other major shareholders in this Jerusalem-based company include Denali Ventures, Auriga Ventures, Teva Pharmaceutical Industries Ltd. and Israel Healthcare Ventures.