Israel-Medical-Healthcare

[genisi]

Teva raises stake in diabetes treatment developer

http://www.reuters.com/article/idCNLDE65D0BI20100614?rpc=44

June 14 (Reuters) - Teva Pharmaceutical Industries (TEVA.O) has exercised an option to raise its stake in Andromeda Biotech, which is developing a treatment for juvenile Type I diabetes, Clal Biotechnology Industries (CBI.TA) said on Monday.

Following the deal with Teva (TEVA.TA), Clal's stake in Andromeda will fall to 84 percent from 89 percent. Teva's share will rise to 16 percent.

According to the agreement, Teva and Clal will invest $17.5 million in Andromeda, of which $5.6 million will come from Clal and the rest from Teva. The money will be used to finance a confirmatory Phase III clinical trial to obtain marketing approval for DiaPep277 in Europe and the United States.

The deal values Andromeda at $170 million, Clal said.

Teva, the world's biggest generic drugmaker, last year received worldwide marketing rights for DiaPep277, 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.

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.