Over the past year, Novartis ($NVS) has struck a pair of deals in Israel, snagging an option to buy Gamida Cell and a stake in BioLineRx ($BLRX). The geographic proximity of the two targets is no coincidence--Novartis is in the middle of a concerted push into the Israeli biotech startup scene.
|Novartis Pharma Chief David Epstein|
In August, the Swiss Big Pharma invested $35 million (€31 million) in Gamida Cell for a 35% stake and an option to acquire the company and its stem cell therapies for a further $165 million plus milestones. Four months later, Novartis returned to Israel with $10 million to take a stake in BioLineRx. The deals mark the start of an attempt to correct a historic imbalance in the geographic focus of Novartis' business development activities.
"When we examined our investment portfolio, it became clear that our exposure to Israel is very limited, despite the fact that there's a great deal of talent and innovation," Novartis Pharma Chief David Epstein told Globes. Hooking up with BioLineRx is Novartis' attempt to catch up. "[BioLineRx] is meant to take the money, identify the Israeli startups and then acquire the rights to develop their technologies. We will be able to buy these technologies from them, if they advance well," he said.
The arrangement gives Novartis a direct line to the Israeli R&D ecosystem, which has spawned a large number of biotechs and the odd controversy. BioLineRx can potentially help Novartis sift through the array of targets to increase the odds of finding the next drug to join Copaxone on the list of Israeli success stories, while avoiding problems akin to those that dogged Hyperion Therapeutics ($HPTX) acquisition of Yavne-based Andromeda Biotech.
- read the Globes interview