Kitov Pharma Ltd. acquired biopharmaceutical company FameWave Ltd. for $10 million in newly issued American depositary shares priced at $1.23 apiece along with a 50% warrant coverage.

The warrants have an exercise price of $1.98 per ADS with a four-year term.

As part of the deal, OrbiMed Advisors LLC, Pontifax Ltd. and Arkin Holdings, which collectively hold about 90% of FameWave, are exchanging their shares in FameWave for Kitov ADSs and warrants and investing $3.5 million in Kitov in exchange for additional newly issued ADSs of Kitov. The three companies will now each hold a stake of about 11% in Kitov.

The Tel Aviv, Israel-based pharmaceutical company will also acquire FameWave's cancer drug CM-24. Kitov in the second half of 2020 plans to evaluate CM-24 in combination with Bristol-Myers Squibb Co.'s Opdivo in an early-stage study for treating non-small cell lung cancer.