BioLineRx ($BLRX) has teamed up with I-Bridge Capital to set up a Chinese drug development player, iPharma. The joint venture will use cash from both its parent companies to develop Israel-originated compounds picked out by BioLineRx, before looking for outside investment once its portfolio reaches a certain size.
Tel Aviv, Israel-based BioLineRx expects iPharma to add the first program to its pipeline in the coming months. Details of which asset it is looking at are yet to emerge, but BioLineRx has said what sort of compounds iPharma will develop. The focus is early-stage candidates, primarily discovered in Israel, that are a good fit for the therapeutic needs of China. BioLineRx is responsible for sourcing the drugs, while VC shop I-Bridge Capital is on board to provide knowledge of the Chinese market and money.
The partners are chipping in $1 million (€900,000) apiece to help iPharma get started. This seed cash is meant to get iPharma through the process of building its pipeline of early-stage assets. Once it has completed this stage of its evolution, iPharma plans to look to outside investors for the cash it needs to grow into a fully-fledged biotech.
While the deal is small, it is part of a much larger trend that contributed to bilateral trade between China and Israel to growing from $50 million in 1992 to $11 billion in 2013. Both countries have a thing the other wants. Israel has a thriving startup scene but a population of 8 million people. China has a population of 1.4 billion people but a relative lack of startups. In the BioLineRx deal, as in many others across multiple industries, Israel is providing the innovation, China is supplying the market.
“The market in China is large and fast-growing, but it lacks innovative therapeutic assets and capabilities which address the increasing demands of our rapidly aging population,” I-Bridge Managing Partner Jimmy Wei said in a statement. “BioLineRx, with its well-established relationships with leading academic institutions and biomedical companies in Israel, as well as its proven project screening process, is an ideal long-term partner for us.”
Such partnerships are emerging as something of a sideline for BioLineRx. While the company’s in-house R&D efforts have yet to live up to the hype that surrounded its $50 million Tel Aviv IPO--by far the largest biomedical offering on the exchange at the time--it has become an entryway into Israel for third parties.
Novartis ($NVS) recognized the potential for BioLineRx to fulfill this role in 2014, at which time the Big Pharma invested $10 million in the biotech and tasked it with sniffing out assets in Israel. The collaboration was slow to get going, but took a step forward earlier this month when BioLineRx secured the rights to a nonalcoholic steatohepatitis drug.
Shares in BioLineRx rose 8% on the back of the joint venture news.
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