Clal Biotech to hold NIS 200m rights issue

Clal Biotech reported no capital gains from sales of companies in 2012, resulting in a net loss of NIS 93.6 million.

Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that it will hold a NIS 200 million rights issue. It provided no details, except to say that the issue would be held on the basis of a shelf prospectus filed in February

Last year, the company, a subsidiary of Clal Industries and Investments Ltd. (TASE: CII), passed from the control of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) to Len Blavatnik's Access Industries Inc., while Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), which owns 14.1%, has changed its investment strategy under new president and CEO Dr. Jeremy Levin. The strategy includes abandoning some investments in Clal Biotech portfolio companies. Clal Biotech also announced that it plans to become a holding company of pharmaceutical company, a step that includes the acquisition of three life sciences holdings of Access Industries.

In its financial report for 2012, Clal Biotech posted a net loss of NIS 93.6 million, compared with a net profit of NIS 87 million in 2011. The company reported no capital gains from sales of portfolio companies in 2012. R&D expenditure totaled NIS 148.9 million in 2012, 4% less than in 2011, and it narrowed its cash flow outflow by 20.7% to NIS 81.2 million.

Clal Biotech classifies five portfolio companies as material holdings: Andromeda Biotech Ltd., CureTech Ltd., Gamida Cell Ltd., MediWound Ltd., and Polyheal Ltd. Of the five, chronic wound treatment companies Mediwound and Polyheal are profitable, posting an aggregate net profit of NIS 54.2 million in 2012. Diabetes treatment developer Andromeda posted a net loss of NIS 43.6 million in 2012, and was the only one of the five companies with a shareholders' equity deficit, which totaled NIS 64.2 million at the end of the year.

Teva has terminated its collaborations with MediWound, oncology company CureTech, and stem cell therapy developer Gamida Cell, and Clal Biotech stated that it cannot assess whether Teva will continue to finance their operations.

Clal Biotech CEO Ruben Krupik said, "The 2013 plan will launch the 'new Clal Biotech', with a broader business and geographical deployment and with more good assets."

Clal Biotech portfolio companies will initiate several important studies this year, including a Phase III clinical trial by Andromeda for its treatment for type 1 diabetes, and a Phase III clinical trial by Gamida Cell for its treatment for blood cancers.

Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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