Clal Biotechnology Industries Ltd. (TASE: CBI) yesterday published its financial report for the third quarter. The company posted a net loss of NIS 10.1 million compared with a net profit of NIS 39.6 million for the corresponding quarter of 2007.
The company attributed most of the third quarter loss to operating costs for a clinical trial by Andromeda Biotech Ltd. and to a write-down on the value of the company's stake in Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN).
Clal Biotechnology invested NIS 20 million in three portfolio companies: D Pharm Ltd., Biocancell Therapeutics Inc., and Biokine Therapeutics Ltd. It also raised an additional NIS 19 million for these companies. It also founded a company, Campus, to locate technologies for investment at the Weizmann Institute of Science.
Clal Biotechnology struck a cautious in the financial report. "We're witnessing a global crisis in financial markets, which is spreading to many manufacturing and business sectors. These times require, more than ever, aggressive, responsible, and effective management. We believe that the company is ready for the challenge of the times."
The company added, "The liquidity at our disposal is sufficient for the coming years. The company has no debt, most of its portfolio companies are well-financed, and a spirit of creativity and mission pervades all our activity." The company cautions, however, "The company's management recently initiated a voluntary move to cut salary costs at management and at the portfolio companies, in order to better internalize the changing times."
As part of the cutbacks, Clal Biotechnology's management company Arte Venture Group decided to reduce its pension provision for 2009 by NIS 250,000. Prior to the cut, the company received NIS 4 million a year. The company also asked the managers of subsidiaries who earn more than NIS 18,000 a month to accept a pay cut of 7.5% through the end of 2009, and asked Clal Biotechnology to do the same.
Clal Biotechnology had NIS 195 million in cash at the end of September. In October, it transferred the final $5.68 million to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) under an investment agreement from September 2005.
Several Clal Biotechnology portfolio companies have issued going concern warnings, including D-Pharm, Biocancell, Andromeda, and Polyheal Ltd. Clal Biotechnology claims that all these companies have sufficient cash and funding commitments from other source (mainly Teva) to reach significant milestones, or to fail trying.
Clal Biotechnology is a unit of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) held through Clal Industries and Investments Ltd. (TASE: CII).
Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2008
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