Medical Device Daily Israel Correspondent

ZICHRON YA’AKOV, Israel — The 2Q07 MoneyTree quarterly survey by PricewaterhouseCooper Israel-Kesselman and Kesselman (Tel Aviv) carried no surprises. Venture capital is still backing Israeli technology companies at top levels.

Some 80 companies, mostly start-ups, raised an average of $4 million each, or an aggregate $319 million — 4% greater than the $307 million raised by 81 companies during the preceding quarter and 6% more than the $300 million raised during 2Q06.

A dozen companies in the Life Sciences sector, taking 16% of the total invested, raised about $50 million, as compared to 10 companies that raised an equal amount in the previous quarter. The average investment per company was $4.1 million the quarter, as compared to $5 million in the previous quarter.

Medical device firms also took 17% of the total additional support by the Israeli Office of the Chief Scientist, $147 million of the total invested, with the biotechnology sector taking just 7%.

According to Israel Venture Capital Research Center (Tel Aviv) estimates, $1.5 billion in capital is currently available for investment by Israeli VCs, of which $900 million was earmarked for seed or first investments in high-tech companies.

An additional $700 million is expected to be raised in 2007 by Israeli VCs for investment in Israeli high technology.

Zeev Holtzman, chairman of IVC Research Center and Giza Venture Capital, said it is expected that the next capital raising cycle of the leading Israeli VC funds – the fifth cycle since 1992 — will start later this year and will reach its peak in 2008.

Medical device companies appear to be favored over biotech endeavors because currently, “capital available for investment by Israeli funds equals two years’ investment, a markedly shorter period than in the U.S., indicating that there is no over-supply of capital in the Israeli market.”

Zetiq to market diagnostic kits in U.S.

Israeli start-up Zetiq Technologies , a subsidiary ofBio-Light Israeli Life Sciences Investments (both Ramat Gan), has completed development of its first diagnostic kit for cancerous cells, for research and drug development.

The company is implementing marketing plans to U.S. research institutes, since no FDA approval is needed.

Zetiq is currently seeking additional distributors.“Zetiq’s unique platform technology makes differential marking of the earliest malignant states of cell populations immediately detectable, quickly and precisely by probing the living sample with an external stimulus before histological fixation,” said Ami Eyal, company medical director and one of the founders of Bio-Light. The probe detects CAMA (cancer-associated metabolic atypia), described as a set of metabolic traits that occur at a very early stage in the process of all cancer cells tested to date. Zetiq developed the Histology-In-A-Well system, using histology of tissue and cell specimens — the industry gold standard for cancer diagnosis — but providing a first-ever comprehensive platform for rapid-throughput integrated target validation and drug discovery.

That allows the rapid screening of small molecules,antibodies, proteins, peptides, si-RNA and other prototherapeutic compounds, that could bring proteomics and genomics companies directly into the field of drug discovery. Zetiq said its first clinical target market is early detection of uterine cancer, but added that it is preferring to wait before giving further details.

Brainsway gets approval for Parkinson’s trial

Brainsway (Jerusalelm) has obtained approval from the Israeli Ministry of Health to conduct Phase I human clinical trials of its transcranial magnetic stimulation device for treating Parkinson’s disease.

Currently, Brainsway is conducting an open study of its device to treat depression, and, if results continue as shown, the company has planned a multi-center study in several places around the world in consultation with the FDA, a company representative told Medical Device Daily.

The current depression trial is examining patients in whom pharmacological drugs have been shown to be ineffective. The company reported encouraging interim results of this trial a few months ago. The platform is applicable to a wide range of neurological and neuropsychological disorders and addictions.

Israeli companies in MarketReach conference

Fifteen Israeli biomedical companies will attend the MarketReach America conference at Johns Hopkins University (Baltimore) this Wednesday and Thursday. The conference is organized by the Maryland/Israel Development Center (Baltimore) and Trendlines International (Shoreshim), to help Israeli biomedical companies find American strategic partners and to penetrate U.S. markets.

Participating companies include Rad BioMed Incubator (Tel Aviv), NanoVibronix (Nesher), Lavi Cardiatec and Pro-IV (Misgav), which is based in the Misgav Technology Center , owned by Trendlines. U.S. companies participating include Medtronic (Minneapolis), Becton Dickinson (Franklin Lakes, New Jersey), Novation (Irving, Texas) and Hanger Orthopedic Group (Bethesda, Maryland).

Maryland Gov. Martin O’Malley and Israel’s Ambassador to the U.S., Sallai Meridor, also will attend the gathering.

Hauptman named BioControl medical director

Paul Hauptman has joined Biocontrol Medical (Yehud) as its new medical director. Hauptman is director of heart failure in the Division of Cardiology of St. Louis University School of Medicine . Formerly at Brigham and Women’s Hospital/Harvard Medical School (Boston), Hauptman serves on multiple editorial boards and has an extensive background in international clinical trials and research.

BioControl develops and markets advanced implantable devices producing controlled electrical stimulation for the treatment of autonomic disorders. In April 2006, American Medical Systems exclusively licensed BioControl’s technology for its miniaturo system, to develop it as a treatment device for urge incontinence and interstitial cystitis. Funds secured from that transaction are being used to support the clinical development of the CardioFit system for the treatment of congestive heart failure.