NEWS AND EVENTS

Mori Arkin in talks to acquire Sol-Gel Technologies Ltd.

11/11

2014
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Businessman Mori Arkin is in advanced talks to buy Sol-Gel, which is developing skincare products using nanotechnology, sources inform “Globes.” If the deal goes through, Arkin will pay $10 million, or more, if milestones are met. The company has confirmed the report. 

Sol-Gel, managed by Dr. Alon Seri-Levy, has developed a method of wrapping molecules with nanoscale particles in order to help the materials inside penetrate the skin. While the active ingredients in Sol-Gel are mostly generic, the wrapping is unique technology, which is meant to improve the performance of the drug.

The company’s lead products are a treatment of the skin condition rosacea, which has completed Phase II clinical trials, and an acne treatment, which is about to begin Phase II trials.

Sol-Gel is a veteran company, which was established in 1997. Since its founding, $26 million has been invested by leading Israeli and foreign venture capital firms, including Argonaut, Challenge Fund - Etgar, andJerusalem Venture Partners (JVP). In 2008, the company had a “mini-exit,” when it sold some of its sun-protection technology to Merck & Co. for $10 million.

The investors did not cash out of the company, but instead invested in the product portfolio, in an attempt to reach a larger exit. However, the funds that invested in Sol-Gel have reached the end of their investment period, and are currently considering accepting Arkin’s offer.

The rosacea product completed Phase II clinical trials in 2012, but the company did not find a suitable partner with whom to proceed to Phase III, or the funding to enable it to lead the process along. The product is a substance called benzoyl peroxide, which is currently used to treat acne, not rosacea, because the medicine itself causes skin irritation in rosacea sufferers. The version with Sol-Gel’s wrapper, which enables extended release of the drug, is meant to make it suitable for these patients as well.

Similar developments

Sol-Gel conducted negotiations to register its product with a few leading companies in recent years, including a deal that was meant to yield $150 million for the company if the product succeeded. However, the corporation with which the company negotiated decided that the product was still in too early a stage of development. If the product develops and the deal with the corporation is signed, Sol-Gel will receive an additional $7 million from Arkin.

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