Novartis has bought a 15% stake in Gamida Cell, with an option to acquire the Israel-headquartered stem cell specialist.

The Swiss major is investing $35 million initially and if it exercises the option, which expires in the first half of 2016 would pay the other shareholders in Gamida some $165 million. Novartis could also pay up to $435 million, depending on certain development, regulatory and sales milestones.

These would relate to NiCord, a stem cell treatment which is in Phase I/II for haematological malignancies such as leukaemia and lymphoma.

In March, main Gambia stakehiolder Elbit Medical said it had received a buyout bid from an unnamed global pharmaceutical firm, widely reported to be Novartis and thought to be worth $600 million, including an upfront fee of $170 million. However in May, Elbit said talks had been terminated.