) recently entered into an investment and option agreement with
Israel-based Gamida Cell, a company which focuses on stem cell
expansion technologies and therapeutic products.
As per the terms of the agreement, Novartis will invest $35
million in Gamida Cell. In exchange, Novartis will receive a 15%
stake in Gamida Cell and an option to fully acquire the
The option for full acquisition is exercisable for a limited
period of time following achievement of certain milestones in
connection with the development of pipeline candidate, NiCord.
These milestones are expected to be achieved during 2015. Novartis
will also be required to pay the other shareholders in Gamida Cell
approximately $165 million upon exercising the option along with
potential milestone payments of $435 million.
We note that Gamida Cell is developing stem cell therapy for the
potential treatment of blood cancers, solid tumors, non-malignant
hematological diseases such as sickle cell disease and thalassemia,
neutropenia and acute radiation syndrome, autoimmune diseases and
genetic metabolic diseases as well as conditions that can be helped
by regenerative medicine.
The company is currently evaluating NiCord for the potential
treatment of hematological malignancies such as leukemia and
lymphoma in a phase I/II study using its proprietary NAM
Meanwhile, enrolment is on for the company's phase I/II study on
NiCord for pediatric sickle cell disease.
We remind investors that Novartis has been taking strategic
steps to realign its portfolio in order to focus on its core
portfolio of pharmaceuticals, eye care and generics. Novartis'
recent deal to acquire oncology products from GlaxoSmithKline (
) and the divestiture of the Vaccines business is a step in the
Novartis, a large-cap pharma, currently carries a Zacks Rank #3
(Hold). Right now, Allergan (
) and AbbVie (
) look well positioned among the large-cap pharmas. While Allergan
carries a Zacks Rank #1 (Strong Buy), AbbVie is a Zacks Rank #2
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