Clal Bio Plunges as Sale of Gamida Unit Halted: Tel Aviv Mover

May 1 (Bloomberg) -- Clal Biotechnology Industries Ltd. dropped the most in almost five years after the holding company with biotechnology investments said talks over the sale of stem cell developer Gamida Cell Ltd. to a foreign buyer were halted.

Shares of Clal Biotech, which holds a 22 percent stake in Gamida, fell 12.5 percent to 8.90 shekels at the close in Tel Aviv, in more than six times the three-month average daily volume. The stock is trading 39 percent below a one-year high of 14.50 shekels reached March 19, when the company said Gamida received an offer from an unnamed pharmaceuticals company.

The talks for Gamida were with Basel, Switzerland-based Novartis AG and were for as much as $300 million in cash, Globes reported today. Novartis has agreed to buy cancer drugs from GlaxoSmithKline PLC for as much as $16 billion, while selling most of its vaccines division to Glaxo and its animal-health unit to Eli Lilly & Co.

“Clal is a holding company and was looking for an exit,” Saar Golan, a trader at Meitav DS Investment House Ltd. in Tel Aviv, said by phone today. ’’I am speculating that Novartis halted the deal because it is busy with its Glaxo and Eli Lilly deals. This is just a postponement of Clal’s exit and not the end of the Gamida story.’’

The ending of the talks, announced in a Tel Aviv Stock Exchange statement, comes after Clal agreed in April to sell its Andromeda Biotech Ltd. unit to Hyperion Therapeutics in a $550 million deal. Its MediWound Ltd. unit held an initial public offering in the U.S. in March. Shares of Elbit Medical Technologies Ltd., which holds a 30.8 percent stake in Gamida, dropped 34 percent to 0.152 shekel, bringing its market value to 126.3 million shekels ($37 million).

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net