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.

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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.

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