Clal Biotechnology Industries Ltd. (TASE: CBI) has sold cancer treatment developer CureTech Ltd. to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) at a NIS 540 million value.
Following the changes in the structure of the deal between Clal Biotech and Teva, the latter purchased remaining CureTech shares from other shareholders, boosting Teva's holding to 78%, for an additional investment of $50 million in the development of CureTech products. Upon completion of the deal, Clal Industries and Investments Ltd. (TASE: CII) will own 12% of CureTech shares.
Teva has exercised its option to invest in CureTech. The fair value of rights deriving from CureTech shares owned by CIal Biotech is between NIS 400-540 million. These rights derive from receipts that CIal Biotech will receive from Teva, as well as royalties from CureTech products that have already been purchased.
CIal Biotech announced that it is still examining the deal's accounting implications, including whether CureTech will be listed in its financial report based on the equity method or as a financial asset.
Teva also has the option to acquire the remaining 20% of CureTech on the basis of milestones for an additional $250 million and single digit royalties from sales. The agreement embodies a potential market cap for CureTech of $1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2011
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