Teva Pharmaceutical Industries Ltd. ended an alliance with an Israeli biotechnology company for the development of an experimental cancer drug as Chief Executive Officer Jeremy Levin narrows the company’s research focus.
Teva will book a non-cash charge of $109 million to write down the value of its investment in CureTech Ltd., the closely held company that’s developing the CT-011 medicine, Petach Tikva, Israel-based Teva said in a statement today. The company dropped the project after analyzing clinical and biochemical data, said Michael Hayden, Teva’s head of research.
The decision sparked a decline in shares of Clal Biotechnology Industries Ltd., the Ramat Gan, Israel-based investment company that owns a stake in CureTech. Teva, the world’s largest maker of generic drugs, said in presenting its strategy to analysts in December that it would end several collaborations.
“Teva had been keeping expectations low for this product since the strategy day and now it’s official,” Sabina Podval, an analyst at Leader & Co. Investment House Ltd. said today by phone. “The company has said in the past that it thinks the market is overcrowded.”
Levin, who joined as CEO last year, has pledged to invest Teva’s resources in areas such as multiple sclerosis treatments, where the company is already strong. Other alliances Teva ended include development of StemEx, a technology from Gamida Cell Ltd. that expands umbilical stem cells. Clal also owns a stake in Gamida.
CT-011 is a so-called monoclonal antibody that’s designed to unleash the body’s immune-system defenses against cancer by interacting with a protein called PD-1.
It will be “very hard to be successful in this area” as competitors like Bristol-Myers Squibb Co. have strong candidates, Levin said in a Bloomberg interview in January.
Results for mid-stage studies for colorectal cancer are expected this quarter and melanoma cancer results may be announced in the three months through June, according to Teva. The partners in CureTech are weighing the implications of Teva’s decision, Clal said in a statement today.
Clal Biotech fell 3.3 percent to 10 shekels at 1:40 p.m. in Tel Aviv.