BBI Contributing Writer

TEL AVIV, Israel – The evolution of new medical device companies in Israel continues its unabated growth, spurred by the influx of highly trained immigrants in the physical, biological and engineering sciences and expanding sources of capital from venture firms in Israel and the U.S., as well as from corporate strategic partners. Innomed and Peregrine are two of the newest venture funds on the Israeli scene that are dedicated to early stage investments in the biomedical arena. Innomed is an outgrowth of Jerusalem Global, a leading Israeli venture capital firm. The venture capital arm of Johnson & Johnson (J&J; New Brunswick, New Jersey) maintains an office in Israel to search for start-up companies in which to invest. J&J also has a subsidiary in Israel, Biosense Webster (Tirat-Hacaramel, Israel), the result of an earlier acquisition.

Israel ranks among the top three countries in the world in the formation of medical device and diagnostic product companies. Here are profiles of several:

Applied Spectral Imaging (ASI; Migdal Ha'Emek, Israel), a pioneering company in spectral imaging technology, has developed the SpectraCube, which reveals details that are normally invisible in conventional imaging systems. This platform technology is being used in the Oasis retinal cube to provide an oxygen saturation map that may aid in the assessment of common retinal conditions such as glaucoma, diabetic retinopathy and acute macular degeneration. It is commercially available to research ophthalmologists. ASI's first commercial product was for spectral karyotyping (SKY) to identify abnormal chromosomes. It uses spectral imaging to analyze and color-code chromosomes, each pair being stained with a different combination of fluorescent dyes. A prototype of its spectral pathology software (SPY) has been made, enabling the visual dissection of multiple stains in tissue samples for diagnosing cancer. ASI is seeking a strategic partner to market the SPY product. ASI is developing jointly with Welch Allyn (Skaneateles Falls, New York) portable retinal imaging diagnostic products that use spectral imaging technology for identifying and tracking the progression of retinal eye diseases that may lead to blindness. ASI has a manufacturing facility in Carlsbad, California, and an office in Martinsville, New Jersey.

Biocontrol (Yehud, Israel) is developing the UroSys minimally invasive electronic urinary incontinence device that uses proprietary Electromyogram Software Processing technology for strengthening the patient's muscles. It can be implanted in the abdomen in an outpatient procedure. When an increase in abdominal pressure is sensed, the UroSys device applies a mild electrical pulse to the pelvic muscles causing contracture and preventing urine flow. External computerized prototypes of the UroSys device have been successfully implanted in humans, with human trials of the final product to begin by year-end.

VisonCare (Yehud, Israel) has patented and developed an implantable telescopic lens (IMT) to replace the natural lens in one eye for the treatment of the dry type of macular degeneration. The IMT restores the patient's central vision and provides a cosmetically appealing alternative to wearing bulky telescopic glasses for reading and performing close-vision tasks. The IMT also enables patients to scan the field of view by natural eye movements without making head movements. The IMT has received CE mark approval and VisionCare launched the product in Europe recently. The company plans to get FDA approval and has opened an office in Saratoga, California.

OrSense (Rehovot, Israel) is developing a noninvasive point-of-care monitor of blood analytes using proprietary electro-optical sensor technology. This entails using near-infrared spectroscopy and extracting strong optical signals by performing brief episodes of occlusion and release of blood flow on a patient's finger. OrSense's initial product will be for monitoring hemoglobin and is currently in multicenter clinical trials in the U.S., Europe and Israel. It is expected to be on the market in 18 months. A noninvasive blood glucose monitor is undergoing in vivo feasibility trials and is targeted for market launch by the end of 2002. Other applications of this technology are for measuring cholesterol and blood viscosity.

Novamed (Jerusalem, Israel) develops and markets proprietary clinical diagnostic tests. These include standard formats such as ELISA immunoassays for rotavirus and autoimmune diseases, latex agglutination tests (rotavirus and E. coli), immunoturbidimetry kits for cardiovascular risk factors (apolipoproteins) and the newly developed one-step immunochromatographic technique (rotavirus and adenovirus). Novamed's DipStreak and NovaStreak tests used with agar media are state-of-the art devices for isolating and culturing bacteria. It also produces Uni-Sep, a patented line of centrifuge tubes for lymphocyte isolation, and Uni-Sorb, a nylon wool column for separation of T- and B-cells. Novamed's products are marketed through local representatives in Europe. The company has only limited sales in the U.S. and is seeking to expand its distribution channels there.

Given Imaging (Yokneam, Israel) is developing a pill-size capsule for transmitting pictures as it passes through the small intestine. The device is swallowed and consists of a camera, light source, radio transmitter and battery sealed within a capsule just 11 mm x 30 mm in size. It is intended for use as an alternative to colonoscopy, which is uncomfortable, provides only a limited viewing range and is difficult for accessing the lower two-thirds of the small intestine by the insertion of tubing. Also, there is no need to interrupt a patient's daily routine while the "camera-in-a-pill" passes through the digestive tract, which takes one to two days. The device employs a CMOS sensor developed by the National Aeronautics and Space Administration in the U.S. and adapted for this application by Given Imaging in collaboration with Photobit (Pasadena, California). The location of the device is determined by the strength and phase of the signal it transmits. It has been tested in animals and in 10 healthy humans. Given Imaging plans to apply for FDA approval before the end of this year.

Transdermics (Rehovot, Israel) is using patented drug delivery technology from its Pharmaderm subsidiary for developing passive, high-capacity and non-adhesive transdermal patches for penetrating the physical and biochemical barriers of the skin. Its CombiPatch system uses normal skin physiology and the channels of hair roots. It is being developed for delivering peptides and proteins, including insulin, and was shown in a Phase I clinical trial to be safe and to lower blood sugar in healthy people. Additional applications of this platform technology to be investigated are for pain management, hormone replacement therapy and treatment for autoimmune diseases. Transdermics is collaborating with Ben-Gurion University of the Negev to develop technology for protecting proteins from degradation during transdermal delivery.

Galil Medical (Yokneam, Israel) markets the Cryo-HIT and SeedNet cryosurgery systems used with image-guided surgery for tumor ablation. Cryo-HIT is a gas-based cryosurgery system that is the first to be integrated with interventional MRI, as well as with CT and ultrasound, for ablation of kidney and liver tumors. The SeedNet system uses ultra-thin needles guided via transrectal ultrasound for the minimally invasive treatment of prostate cancer. Its IceSeeds technology combines cryotherapy and brachytherapy. Galil owns patents on the use of argon and helium in cryosurgery applications. The company maintains an office in Boston, Massachusetts. It is an outgrowth of Rafael Development Corporation Ltd. (Tel Aviv, Israel), a high-technology business development company that is the largest R&D organization in Israel and seeks commercial applications of defense technologies.

Odin Technologies (Yokneam, Israel) produces PoleStar N-10, a compact system that provides intraoperative MRI images and is designed for installation in the operating room. It incorporates both optical and magnetic navigation capabilities. It eliminates problems resulting from brain shift and enables the surgeon to locate clinically relevant structures with visually ambiguous anatomical appearance and can be used to verify complete removal of lesions. The system has FDA clearance for diagnostic imaging and an application has been filed for intraoperative use. PoleStar N-10 units are being used in neurosurgery at three beta sites: Sheba Medical Center in Israel; University Hospital in Zurich, Switzerland; and at the University and Medical School of New Jersey. The company expects to install three more systems in the U.S. by the end of this year. The price for the system, including operating room modifications and a set of surgical equipment, is about $1 million. Odin also has a Boston sales office.

Imarad Imaging Systems (Rehovot, Israel) uses cadmium zinc telluride to produce high-resolution and low-cost, solid-state gamma irradiation detectors for use in nuclear medicine and for computed tomography. These detectors are being used to develop a new generation of mini gamma cameras. GE Medical Systems (Waukesha, Wisconsin) and Siemens Medical Systems (Iselin, New Jersey), which own a combined 6% of Imarad, will incorporate Imarad's detectors into their nuclear imaging systems.

Labor Control Systems (Nesher, Israel) is developing the Labor Progress Monitoring System (LPMS) a proprietary system consisting of a computerized monitor and disposable probe for real-time electronic monitoring of the progress of birth. The LPMS may eliminate the need for frequent manual vaginal examinations for determining cervical dilation, effacement and location of the fetus in the birth canal. Combined with existing fetal-maternal monitors, the LPMS provides a full electronic labor-monitoring solution. The initial system is intended for use in hospital delivery rooms; later versions will be targeted for home use in high-risk pregnancies and for detection of the onset of labor.

Advanced Monitoring Systems (Migdal Ha'Emek, Israel) has used ion-selective electrode technology for developing rapid, noninvasive, home-use tests on saliva for monitoring medication levels. The portable LithoSafe analyzer is the first application of this technology. It is used for measuring levels of lithium carbonate, used in the treatment of manic-depressive bipolar disorders, which requires close supervision because the therapeutic level is close to the toxic level. The LithoSafe saliva monitor replaces currently used blood tests. Advanced Monitoring Systems is seeking a strategic partner for financing the development and future marketing of its products.

Polyheal (Haifa, Israel) is developing several unique products for accelerating the healing of chronic open and ulcerated wounds. These products are formulated from aqueous suspensions of non-biodegradable, synthetic charged microspheres and showed excellent results in two pilot clinical studies on ulcerated wounds that failed previous conventional wound-healing treatments. These microsphere-based preparations are expected to be classified as devices, not drugs.

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