Novartis is investing a further $15 million in Israeli stem cell specialist Gamida after turning down a buyout option earlier this year.

This increases Novartis’ stake in the company by 2.5 percent. The investment will be used to advance Gamina’s clinical programmes, particularly for its flagship candidate NiCord, currently in early- to mid-stage trials for haematological malignancies such as leukaemia and lymphoma.

Novartis could also invest up to another $10 million, subject to the close of an equity financing by the end of 2017, to fund late-stage development of NiCord. Phase III trials are expected to begin in mid-2016.

The Swiss firm initially bought a 15% stake for $35 million last year. This came with the option to acquire Gamida for an extra $165 million, as well as up to $435 million in milestone payments, which expires in the first half of 2016.

However, in June Novartis said it had decided not to buy the company despite the fact that all predetermined milestones had been met. Instead, the company indicated that it would “explore suitable alternatives” to stay close to Gamida.