Microcap BioLineRx in-licenses a second NASH candidate under Novartis deal

Novartis HQ cropped

Israeli biotech BioLineRx ($BLRX) was up about 25% in early trading on news that it has done a second in-licensing deal for a nonalcoholic steatohepatitis (NASH) candidate under a strategic collaboration with Novartis ($NVS). That put the tiny microcap up to a valuation of around $70 million.

Novartis and BioLineRx partnered under a December 2014 deal in which the biotech was slated to screen and develop Israeli-sourced candidates. As part of the partnership, Novartis made an initial $10 million investment to hold 12.8% of BioLineRx shares.

The pharma can option a project under the deal for a $5 million fee; it will subsequently pay for half of the development costs through proof-of-concept data in the form of further undisclosed equity investment in the biotech. Up to three development programs were planned as part of the deal.

In the latest agreement under the Novartis deal, BioLineRx has signed an exclusive worldwide agreement to in-license liver candidate BL-1220 to treat end-stage liver disease and conditions leading to liver failure such as NASH.

“In August this year, we in-licensed the first compound under our multi-year strategic partnership with Novartis, a novel drug candidate for controlling liver fibrosis through modulation of the immune system,” said BioLineRx CFO and COO Philip Serlin in a statement.

“Both of these projects fit our strategic focus on the immunology space. We continue to work closely with Novartis to identify cutting-edge, novel therapies and we expect to bring additional promising projects to the collaboration by the end of the year," he added.

BL-1220 is in-licensed from the technology transfer groups of Ben-Gurion University and Hadassah Medical Organization. The August deal for the first Novartis candidate was to bring in liver fibrosis candidate BL-1210, which is also being developed to treat NASH.