Israel's Clal Biotech in talks to sell Andromeda unit

28 February 2014

In an announcement to the Stock Exchange, Israeli firm Clal Biotechnology Industries (TASE: CBI) said that, on February 25, Andromeda Biotech, a company owned by CBI (with a 96% fully diluted stake, once the repurchase of Andromeda shares from Teva Pharmaceutical Industries [NYSE: TEVA] is completed) has signed a non-binding term sheet contemplating its sale to an unnamed US based pharmaceutical company.

The consideration, amounting up to several hundred million dollars, would include an immediate payment as well as future milestone-based payments (development/regulatory/sales. In addition, the consideration would include payments derived from the extent of sales of the DiaPep277 (double digits percentage), the drug for the treatment of type I diabetes that is being developed by Andromeda.

The announcement came just a couple of days after Andromeda revealed that it entered into an agreement with Teva for the acquisition of Teva's rights for Andromeda's drug, DiaPep277, for the treatment of type 1 Diabetes.

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