UPDATE 2-Quark Pharma inks drug deal with Novartis, eyes IPO

* Quark grants Novartis worldwide rights to kidney drug

* Says deal worth up to $680 million

* Quark CEO sees Tel Aviv listing around November

* Plans to raise $30-$60 mln in IPO

* In talks with Big Pharma on eye drug
(Adds Quark CEO comments, background)

By Krishnakali Sengupta

BANGALORE, Aug 18 (BestGrowthStock) – Privately held Quark
Pharmaceuticals Inc licensed its experimental kidney drug to
Swiss giant Novartis (NOVN.VX: ) for up to $680 million and its
CEO said it was looking to go public later this year, three
years after a previous attempt to list on Nasdaq failed.

In an interview, Quark Chief Executive Daniel Zurr said the
Fremont, California-based company hopes to raise $30-$60
million in an initial public offering on the Tel Aviv Stock
Exchange around November.

“We are looking at Tel Aviv as the preliminary step for (a
Nasdaq listing), as the Tel Aviv Exchange is very robust,
especially for the life-science section,” Zurr told Reuters.

The Nasdaq listing would depend on recovery of the U.S.
market along and the receipt of milestone payments from its
partners, Zurr said, but added he hopes for a listing in 2011.

He said the company, which focuses on developing drugs
based on RNA interference, or RNAi — one of the hottest areas
of biotechnology research — is also in partnership talks with
Big Pharma for its experimental eye drug QPI-1007.

RNA inhibitors, or RNAi, are designed to silence genes
responsible for producing disease-causing proteins.

“We are looking for Big Pharma basically because we believe
this could easily be a billion dollar drug,” CEO Zurr said.

The drug is being developed for two indications; to treat
loss of the fibers of the optic nerve, for which it is early
stage trials, and for treating Glaucoma, for which it is in
early development.

BIG DEALS

Earlier Wednesday, Quark announced that Novartis will get
the exclusive worldwide license to its experimental drug
QPI-1002, for an upfront payment of $10 million, and milestone
payments of up to $670 million based on developmental
achievements.

The drug, currently in its mid-stage trials, is being
developed for the prevention of acute kidney injury in patients
undergoing major cardiovascular surgery or kidney damages
related to transplants.

This was the second such big partnership for Quark,
following a licensing agreement with Pfizer Inc (PFE.N: ) in 2006
for another eye drug being developed as a treatment for
swelling of the macula.

In June of this year, Quark also entered into a
collaboration agreement with Japanese diversified materials
manufacturer Nitto Denko Corp (6988.T: ) to develop a treatment
for fibrotic diseases using Quark’s technology.
(Reporting by Krishnakali Sengupta in Bangalore; Editing by
Prem Udayabahnu, Anthony Kurian)

UPDATE 2-Quark Pharma inks drug deal with Novartis, eyes IPO