Novartis makes investment in stem cell company Gamida Cell with option agreement

Swiss drug major Novartis (NOVN: VX) has signed an investment and option agreement with Israeli stem cell specialist Gamida Cell. Under the terms of the accord, Novartis will invest $35 million in Gamida Cell in exchange for 15% equity and an option to fully acquire the company.

The option is dependent on the achievement of certain milestones connected to the development of NiCord, which is anticipated to be met in 2015. Should Novartis exercise the option, it would pay other shareholders in Gamida Cell cash payments of around $165 million, and these other shareholders would be entitled to potential future payments which can reach a total of $435 million, depending on development and regulatory milestones and product sales.

Yael Margolin, Gamida Cell’s president and chief executive, said: "The investment and option agreement announced today demonstrates Novartis' belief in the potential of Gamida Cell's platform technology, product pipeline and team. Novartis is a leading pharmaceutical company with a declared commitment to further expand and develop its pipeline of cell therapy products. This, combined with the breadth of its resources and experience, positions Novartis perfectly for an alliance with Gamida Cell."