Medical Device Daily Contributing Writer

ZICHRON YAAKOV, Israel – A feverish race continues for a stand-alone non-invasive monitoring device which does not need to be used along with conventional blood glucose monitoring of blood samples, and three Israel companies are among the participants.

Start-up OrSense (Nes Ziona, Israel) just completed a $6 million private financing for its non-invasive electro-optical technology that provides spot or continuous monitoring of blood constituents such as glucose, hemoglobin (Hb), hematocrit (Hct) and oximetry (SpO₂), using the finger as a testing site.

Israel Healthcare Ventures (IHCV; Tel Aviv) led the investment, along with STAR Ventures and Lewis Trust Group and others.

OrSense Chairman Shimon Eckhouse is enthusiastic. Eckhouse, who recently was voted Ernst & Young's entrepreneur of the year for Israel in life sciences, said, “We believe that this additional investment will help us establish OrSense as the world leader in non-invasive glucose monitoring, able to eliminate multiple needlepricks to monitor blood sugar levels throughout the day. This is a significant improvement in the quality of life for people with diabetes, a trend we see extending into the future.“

So far OrSense is on track to become another Eckhouse blockbuster. Even if it does not take all, there is plenty of space to maneuver in this $8 billion monitoring market.

The company's intellectual property portfolio consists of 18 granted patents, with another 25 in process. OrSense products are based on its occlusion spectroscopy technology.

Other of its products focus on non-invasive monitoring of other critical blood parameters, such as hemoglobin.

Carlo Salvi, a director at Teva Pharmaceutical Industries (Petach Tikva), has been named to the OrSense board. He said, “The prospect of working with OrSense as a director and an advisor is exciting. I have also decided to increase my investment in the company through IHCV, because I believe that their unique non-invasive monitoring systems address major unmet medical needs and represent a potential for rapid market acceptance and profitability.“

OrSense is running in this race of tell-but-don't-touch blood sugar monitors with two other Israeli-born endeavors.

Glucon (Boulder, Colorado), developing a continuous, non-invasive, glucose monitoring technology for home and clinical use, was founded in 2000 by two Israelis, company president Ron Nagar and vice president for R&D, Benny Pesach. Glucon has R&D offices in Petach Tikva, Israel.

The company's technology uses photoacoustics to read glucose levels directly from a blood vessel. Glucon was granted a patent and its flagship product, the Glucose Monitoring Watch, a digital watch/meter that constantly checks the glucose level in the bloodstream, is currently in clinical trials.

Called Aprise, it will display a continuous reading of the patient's real-time blood glucose level, enabling the patient to take the necessary measures to remain within glucose-safe limits. Ultrasound imaging is employed to identify a blood vessel and optical spectroscopy is used to quantify the glucose concentration within the blood vessel.

Pesach said the company has demonstrated excellent prospective clinical results. These include the most recent study of 23 subjects, 309 capillary blood tests yielding precise (20mg/dL) and accurate results.

The start-up raised $14.8 million financing in a Series C round.

NetRegulus, an established provider of enterprise compliance software for regulated industries, said that Glucon has selected the new NetRegulus NetRM Software as a Service (SaaS) Study solution to manage the next phase of its aggressive clinical trial schedule.

“NetRegulus' experience and significant knowledge of regulated life sciences was a key factor in our decision process. The NetRegulus SaaS solution promises to help reduce time to market while simultaneously improving the ability to successfully manage critical data in preparation for successful FDA submissions,“ said Glucon CEO Dan Goldberger.

Another group of Israeli entrepreneurs saw the market potential and founded Integrity Applications in September 2001. Their non-invasive device for measuring blood glucose levels, GlucoTrack, has a triple cross-checking device for measuring blood glucose levels.

Integrity Applications co-founder, CEO Avner Gal, said the three separate measuring technologies are needed because “the human body is a complex target, as well as one that demands extreme accuracy.“ The technology for separate cross-checking and the processing algorithm that supports them has a U.S. patent for the combination of the three technologies.

Gal said that more than 10 companies worldwide are trying to develop a viable solution. “We have a final model with 100 units ready for clinical trials,“ he said, developed at a cost of under $2 million invested from private investors.

Integrity Applications is now holding another financing round of $1.5 million, “which ought to be our last round before we go to market,“ he said. “We prefer strategic investors with strategic capabilities.“

Elbit plans to issue debentures

Elbit Medical Imaging (EMI; Tel Aviv, Israel) said it has an agreement with Israeli investors to issue NIS 350 million aggregate principal amount of unsecured non-convertible debentures, consisting of two series, to investors in Israel.

The first series will consist of NIS 294 million in principal amount of Series A debentures, which will bear interest at a rate of 6% a year and with principal and interest linked to increases to the Israeli consumer price index.

The second series will consist of NIS 56 million in principal amount of Series B debentures, which will bear interest at a rate of LIBOR plus 2.65% a year, and will be linked to changes to the representative rate of exchange between the New Israel Shekel and the U.S. dollar.

The principal amount of the debentures will be repayable in 10 semi-annual equal installments commencing in August 2009 and ending in February 2014. The debentures also provide that the debentures will be prepaid by EMI at the option of the trustee or the holders of the debentures, if the securities of EMI are jointly delisted from trade on the Tel Aviv Stock Exchange and the Nasdaq National Market.

In addition to the NIS 350 million to be issued to third-party Israeli investors, EMI will issue an additional NIS 44 million in principal amount of Series B debentures to a subsidiary company.

EMI's businesses include image-guided focused ultrasound through its InSightec-Image Guided Treatment Ltd. subsidiary.