Teva, Clal Biotech cos sign wound deal

Teva will market the burn and chronic wound treatment companies MediWound and Polyheal.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) today signed a cooperation agreement with two Clal Biotechnology Industries Ltd. (TASE: CBI) portfolio companies, MediWound Ltd. and Polyheal Ltd. to develop treatments for burns and chronic wounds. The companies signed a non-binding agreement in June.

The objective of the collaboration is to include Polyheal wound treatment technologies and MediWound's technology, production, and managerial capabilities with Teva's global marketing platform. The combined basket of products will enable MediWound to become a leading player in the burn and chronic wound treatment market, currently estimated at over $9 billion a year

The deal is multi-tiered. Teva will invest $7 million in MediWound at a company value of $200 million before money, and has a right to invest an additional $65 million, subject to milestones related to progress in the development of Polyheal's products, at a company value of $200-300 million, before money.

MediWound will acquire Polyheal in stages. It will initially buy $7 million of Polyheal shares at a company value of $90 million. Subject to milestones, MediWound will buy $193 million of Polyheal shares at a company value of $90-270 million. MediWound will make additional payments based on the sale of Polyheal products.

Teva will also gradually increase its stake in MediWound to 51%, buying shares for $91 million at a company value that will rise, subject to milestones, from $273 million to $593 million. Teva will make the payments if it decided to expand its license for MediWound's products in the Europe and the US.

Clal Biotech currently owns 55% of MediWound and 41% of Polyheal. When all the stages of the deal are completed, Clal Biotech will own 29% of MediWound, which will wholly own Polyheal.

Clal Biotech CEO Reuven Krupik said, "This agreement marks the beginning of a new stage in Clal Biotech's development: the penetration of drugs it developed into international markets.

Published by Globes [online], Israel business news - - on November 9, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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