BioCancell Therapeutics Ltd. (TASE:BICL) and Proteologics Ltd. (TASE: PRTL) have opened initial talks for a merger. Dr. Aharon Schwartz, the chairman of both companies, and a former VP for innovative ventures at Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), is behind the negotiations.
BioCancell is developing oncology treatments, and is conducting Phase IIb clinical trials (multicenter efficacy studies) for BC-819 for three indications - bladder, ovarian, and pancreatic cancer. The company's leading product was developed at the Hebrew University of Jerusalem by Prof. Avraham Hochberg, who discovered a method for targeting toxins into cancer cells.
After a struggle, Clal Biotechnology Industries Ltd. (TASE: CBI) recently acquired 50% of BioCancell. Teva, which owns 14% of Clal Biotech, was once interested in acquiring BioCancell, but no deal was reached.
Teva owns 31.3% of Proteologics, which is engaged in developing targeted drugs on the basis of an understanding of the ubiquitin system, a small regulatory protein which control cell mechanisms. Prof. Aaron Ciechanover and Prof. Avram Hershko won the 2004 Nobel Laureates in Chemistry for their discovery of the ubiquitin system.
The logic of a merger between the two companies is based on their ability to share management, drug development know-how, ties with large companies, and agreements with materials and service providers. BioCancell's product is farther advanced, but it has no large drug pipeline, while the situation at Proteologics is the opposite.
In a notice to the TASE, BioCancell said that any merger would be carried out by share swap, but the valuations for a merger and who would manage the joint company have not yet been decided. It said that a merger would not be carried out before the first quarter of 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2012
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