BioLineRx Ltd. is banking on approval for a cardiac treatment to generate its first revenue as the Israeli biopharmaceutical company plans to issue more stock in the U.S. to fund other less developed research.
The Jerusalem-based company has “a lot of aspirations” for the treatment, which is a “cast for a broken heart, basically,” Chief Financial Officer Philip Serlin, 51, said yesterday in an interview at Bloomberg’s headquarters in New York. BioLineRx will need to borrow more money in about 15 months as it currently holds $30 million in cash, he said, adding “we’ll try to do it in a U.S. stock offering, either private or public.”
The company’s American depositary receipts traded on the Nasdaq Stock Exchange fell 8.9 percent to $3.57 yesterday, as the Bloomberg Israel-US 25 index of the largest Israeli companies traded in New York climbed 1.8 percent. Teva Pharmaceutical Industries Ltd. jumped 3.4 percent to $45.04 after reporting that fourth quarter net income rose 23 percent. The TA-25 Index fell 0.8 percent at the close in Tel Aviv today.
Ten-percent owned by Petach-Tikva, Israel-based Teva, the world’s largest maker of generic drugs, BioLineRx partnered with Ikaria Holdings Inc. in Clinton, New Jersey, to complete final development and sale of an injectable treatment that creates a protective shield around the heart while it recovers in the weeks after an attack. The product is currently being reviewed by authorities in Europe and the U.S., according to Serlin.
The cardiac treatment and a drug for schizophrenia are BioLineRx’s most developed products, with the eventual sale of the drugs likely to spur the company, which reported a net loss of $7.94 million for the third quarter of 2011, to generate its first sales by 2015, Serlin said.
BioLineRx listed ADRs on the Nasdaq on July 25. The company’s Tel Aviv shares dropped 9.6 percent to 1.255 shekels, or the equivalent of 33 cents. One ADR represents 10 shares.
Stock in the U.S. surged 69 percent on Jan. 24 after BioLineRx announced a licensing agreement for a hepatitis C treatment with Marseille, France-based Genoscience. The deal boosts the odds that the company may be bought, Raghuram Selvaraju, a New York-based equity analyst at Morgan Joseph TriArtisan Group said at the time.
Bristol-Myers Squibb Co. and Gilead Sciences Inc. have announced $13.3 billion of acquisitions in the past three months to buy developers of hepatitis treatments.
The company’s business model is based on partnering with bigger pharmaceutical companies to complete development and then sales of products, and it isn’t focused on one particular area of medical research, BioLineRx’s Serlin said yesterday. This means that it probably isn’t a traditional buyout target, he said.
BioLineRx’s cardiac treatment is in a clinical trial, which is expected to end in 2013, Serlin said.
“It’s out sexiest product,” he said. “How do you mend a broken heart? We have a drug for it.”
The company also develops a treatment for schizophrenia, which affects about 1 percent of Americans, according to the National Institute of Mental Health. BioLineRx’s drug is different from the medications currently sold on the market as it treats the cognitive as well as the psychotic impairments caused by the disease, Serlin said.
Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq, the most of any country outside the U.S. after China. The nation is also home to more startup companies than in the U.S. Teva’s Tel Aviv-traded shares gained 1.4 percent to 170.2 shekels, or the equivalent of $45.15.
The pharmaceutical company said fourth-quarter profit rose 23 percent as last year’s acquisition of biopharmaceutical company Cephalon Inc. shifted the company further away from its original identity as a generic drugmaker.
Teva bought Frazer, Pennsylvania-based Cephalon for $6.5 billion last year in a bid to broaden a portfolio of brand-name drugs that has been dominated by the multiple sclerosis treatment Copaxone.
“Teva’s earnings report is encouraging,” David Levinson, an analyst at Bank Hapoalim Ltd. in Tel Aviv, wrote in an e-mailed report yesterday. “The merger of Cephalon and growth of other brand names are reducing the dependency on Copaxone.”
Given Imaging Ltd., an Israeli maker of pill-sized cameras for digestive diagnosis, reported fourth-quarter sales and net income that surpassed analysts’ estimates yesterday. Shares of the Yokneam, Israel-based company gained 4.7 percent yesterday to $18.62 in New York. The Tel Aviv stock lost 3 percent to 70.78 shekels, or $18.78, after surging 9.6 percent yesterday.
Nice Systems Ltd., a Ra’anana, Israel-based maker of analytical telecommunications software, said net income in the last three months of 2011 fell to $15.2 million, from $17.4 million a year earlier. The ADRs dropped 1.9 percent to $36.04. The Israeli shares declined 2.1 percent to 134.90 shekels, or the equivalent of $35.79.
Syneron Medical Ltd., which develops aesthetic medical devices, climbed to the highest level in three months in U.S. trading yesterday, rising 5.7 percent to $11.54.
Shares of the Yokneam Illit, Israel-based company were rated “buy” in initial coverage at Cantor Fitzgerald LP, according to an e-mailed report after the market closed yesterday.