BioCanCell offer to purchase fails

Ofer Gonen Photo: Eran Lavi

The controlling shareholders can either try again or raise money on the TASE.

A second attempt by Clal Biotechnology Industries Ltd. (TASE: CBI) and other shareholders in cancer drug company BioCanCell Therapeutics Ltd. (TASE:BICL) to acquire all of the public's shares in the company ended in failure last week. Controlling shareholders Clal Biotechnology (44%), Palisade Capital Management fund (19.4%), and the Edgewater Partner Holdings fund (20%) were seeking to buy the public's 16.6% holding at NIS 1.70 per share.

This price is 91% higher than the share price at which BioCanCell's share was traded in late October, when BioCanCell first announced that its major shareholders intended to submit an offer to purchase for delisting the company from trading. It is also 15% higher than the price offered to the company earlier for a private placement. A condition for this private placement was delisting from the Tel Aviv Stock Exchange (TASE). BioCanCell's current market cap is NIS 156 million.

It will be interesting to see now whether the BioCanCell shareholders continue trying to delist the company in order to go ahead with the private placement and have the company listed on Nasdaq, as they planned, or whether they will take advantage of the rise in BioCanCell's share price and the interest in the company to hold a financing round on the TASE and increase the public's holdings in the company, while foregoing the private placement contingent on delisting the company from trading, at least for now.

Wanted: Capital for advanced clinical trials

BioCanCell wants to enter Phase III clinical trials (and another clinical trial for confirmation either simultaneously or following the first Phase III trial) of its drug for treatment of prostate cancer, a market estimated by BioCanCell at $500 million. The company has been managed by CEO Dr. Frank Haluska, former ARIAD Pharmaceutical CMO and SVP clinical R&D, since early 2016.

BioCanCell does not have enough money to fund the trials, and will therefore have to find a source of financing, whether through a private placement or a Nasdaq offering. Clal Biotechnology has included the company on its list of portfolio companies for which it wants to hold an offering for the past year. The Tel Aviv capital market will probably be unable to provide the money needed to carry out these trials.

Published by Globes [online], Israel Business News - www.globes-online.com - on January 1, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Ofer Gonen Photo: Eran Lavi
Ofer Gonen Photo: Eran Lavi
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