Novartis ($NVS) has come good on its promise to continue collaborating with Gamida Cell despite twice walking away from takeover agreements. The Big Pharma handed over $5 million (€4.4 million) for a 2.5% stake in Gamida Cell this week--and promised to invest a further $10 million if its collaborator wraps up an equity financing by the end of 2017.
Jerusalem, Israel-based Gamida Cell is assessing its financing options as it nears the start of a Phase III trial of its stem cell blood cancer therapy. The plan is to get the study underway by the middle of next year, by which time Gamida Cell will also have data from its Phase I/II study. Gamida Cell expects to release data from the 15-person trial in the fourth quarter. If the data impress, they will put Gamida Cell in a stronger position as looks to--and beyond--the financing of its late-phase trial, the design of which has been agreed with regulators in the U.S. and Europe.
Novartis bought itself a front row seat for these events last year when it paid $35 million for a 15% stake in Gamida Cell, company with which it has an eventful history. Novartis has discussed buying Gamida Cell in a deal worth $600 million on two separate occasions. The most recent negotiations led to Novartis picking up an option to buy Gamida Cell for $165 million upfront and $435 million in milestones by 2016. Novartis turned down the option earlier this year but retains a financial--and therapeutic--interest in Gamida Cell.
This week's deal ups Novartis' stake in Gamida Cell by 2.5%, while also keeping the latter's income ticking over as it awaits data to support a future financing event. Gamida Cell has already persuaded regulators on both sides of the Atlantic to award orphan drug status to its stem cell therapy and attracted the interest of Novartis. But the novelty of its approach and limited pool of clinical data will mean its attract scepticism, too. Gamida Cell's lead candidate is derived from umbilical cord blood, which is processed to create a cell graft suitable for patients who lack a bone marrow donor.
Management is presenting Novartis' investment as a vote of confidence in the approach. "This support is testament to the potential of Gamida Cell's immune therapy platform and its potential to improve outcomes for patients with diseases like leukemia and lymphoma who need a bone marrow transplant but who do not have a matched related donor," Gamida Cell CEO Yael Margolin said in a statement.