Swiss drug giant Novartis has decided not buy Israel-headquartered stem cell specialist Gamida Cell.

Under an August 2014 pact which saw initial investment of $35 million, Novartis agreed to pay Gamida shareholders a further $165 million if it exercised its option to buy the firm, as well as up to $435 million for certain development, regulatory and sales milestones.

But main Gamida stakeholder Elbit Medical said it had been notified by Novartis that it wouldn’t be exercising the option to snap up the rest of the stock from current shareholders, despite the fact that all pre-determined milestones have been met.

Novartis does, however, seem keen to keep close Gamida, telling Elbit that it is interested in continuing working with the biotech to develop its products and that it will “soon explore suitable alternatives” along these lines.

Gamida’s flagship programme is stem cell therapy NiCord, currently in early- to mid-stage trials for haematological malignancies such as leukaemia and lymphoma.