Diagnostics & Imaging Week Correspondent
ZICHRON YAAKOV, Israel – When you like something, you don't want to dilute it.
So it is with start-ups: thus, GI View (Ramat Gan) has raised $10 million in its third financing round, led by veteran investors Israel Healthcare Ventures (Tel Aviv), Delta Ventures (Hertzlia Pituach) and other private stakeholders in the company.
GI View is proving its flagship product, the Aer-O-Scope, which it describes as an air-driven, self-propelling, self-navigating, endoscope with a unique vision system that is also disposable, miniaturized, with minimal discomfort and maximal efficiency, intended for early diagnosis of precancerous tumors.
The company was founded in late 2003 by serial entrepreneurs CEO Benad Goldwasser, a professor of surgery at Tel Aviv University School of Medicine, with Vice President of R&D Oz Cabiri and Yossi Gross.
Goldwasser describes the GI View device for early diagnosis of cancer in the large intestine as an instrument that – in contrast to colonoscopes operated by expert physician practitioners, drives itself – requires no special skill, and thus is the perfect instrument to take over colonoscopic screening.
Goldwasser, previously director of surgery at Sheba Medical Center (Tel Hashomer), co-founded Medinol (Jerusalem) with Kobi and Judith Richter but pulled out early on following a legal dispute.
Goldwasser told the press that this financing round for GI View had received offers of more than $30 million from three leading U.S. venture capital funds, but the board rejected that money because it would have required taking the company out of Israel.
Instead, all previous investors opted to put in more money at a significantly higher company value than in the previous financing round in September 2004 that raised $7 million.
Israel Healthcare Ventures manager Hadar Ron said, "The company is making good progress and has exceeded the milestone targets set for it. Given the market, it is worth this present high valuation.
A physician by training, Ron noted that the first phase feasibility clinical study in healthy volunteers, to evaluate the motion mechanism of the Aer-O-Scope's passage through the colon, was completed with impressive results less than a year ago.
An additional clinical trial in February on healthy volunteers demonstrated that the omni camera, used for the first time in humans, provided the 360-degree viewing of the inner surface of the colon, with "excellent resolution," due to the air expansion.
Gross helped found other medical device companies, including Transpharma Medical (Lod, Israel), Visionsense (Orangeburg, New York/Petach Tikva, Israel) and MedImpulse (formerly BioControl Medical), which sold its urology business recently to U.S. medical device manufacturer American Medical Systems (AMS) for $25 million in cash and $25 million in potential milestone payments over the next 10 years or sooner.
BioControl is developing implantable devices that can stimulate or inhibit the contraction of muscles and nerves of the autonomic system, focusing first of all on urinary incontinence.
Micromedic, BioRap in collaboration
Micromedic Technologies (Tel Aviv), a publicly traded holding company specializing in medical devices and cancer therapies, with a market cap of about $4.5 million, has signed an agreement to collaborate with BioRapTechnologies (Haifa), a private company established in 2001 to commercialize the intellectual assets of the Technion-Institute of Technology's Faculty of Medicine.
BioRap is fully owned by the Rappaport Family Institute for Research in the Medical Sciences, and is a soup-to-nuts business development organization providing patenting, legal representation, strategic alliance development, negotiation with investors to startup initiation, device design and testing, management and guiding full commercialization.
Micromedic may also invest in some of the startups that Biorap owns, said Chairman David Solomon, but the focus of the company is on diagnostics and monitoring of cancer. "We have organized an advisory team of experts on the area and are searching for strategic relationships with other serious research institutes, with the aim to position the company as a leader in this area," he said, referring to the April announcement of the Micromedic board of directors.
Micromedic previously made two investments: a 60% controlling interest in Medvision, which is developing SkinScan, a follow-up device to allow simple consistent non-invasive detection of skin growths at the very earliest stages, with highly repeatable follow up measurements, and 20% of MET (Microvascular Eye Technology). Both start-ups are located in the Yozmot-Granot Initiative Center, a privatized incubator (Hefer).