Israel-Medical-Healthcare

[genisi]

Someone at Teva believes in this molecule. In any case, this is small change for Teva but Clal is up 25% on this.

Teva invests $10.5 mln in diabetes drug developer

http://www.reuters.com/article/marketsNews/idINLI48804120090218?rpc=44

Wed Feb 18, 2009 6:32am EST

TEL AVIV, Feb 18 (Reuters) - Teva Pharmaceutical Industries (TEVA.O: Quote, Profile, Research, Stock Buzz), the world's biggest generic drug maker, has decided to exercise an option to invest $10.5 million in Andromeda Biotech, which is developing a treatment for juvenile diabetes.

The deal, which will see Teva's stake rise to 10 percent from 3 percent, values Andromeda at $100 million, Israel's Clal Biotechnology Industries (CBI.TA: Quote, Profile, Research, Stock Buzz), which owns 97 percent of the biopharmaceutical company, said on Wednesday.

Clal said it will post a capital gain of 65 million shekels ($15.7 million) from the sale of the stake to Teva (TEVA.TA: Quote, Profile, Research, Stock Buzz). Upon completion of the deal, Clal will hold 90 percent of Andromeda.

Under an agreement signed in February Teva received various options to invest in Andromeda.

Once the drug is approved for marketing in Europe, Teva has an option to invest $44 million at a company valuation of $480 million and when it is approved in the United States Teva can invest $52 million at a company valuation of $555 million.

At the end of this process, Clal will own 65 percent of Andromeda and Teva 35 percent.

Andromeda, founded in 2007, is developing Type I diabetes treatment DiaPep277, which is in advanced phase III clinical trials.

Clal said more than $180 million have been invested in developing the drug, whose market is estimated at hundreds of millions of dollars a year.

DiaPep277 is a unique peptide that prevents the destruction of insulin producing cells in the pancreas.