REHOVOT, Israel - XTL Biopharmaceuticals Ltd. completed a private placement, raising US$10.1 million for 22.4 percent of its shares. The money will be used to advance the company's agent to fight hepatitis B, said Martin Becker, CEO of the Kiryat Weizmann-based firm.

“The biotech field in Israel suffers from difficulties in raising money locally,“ he said. “Only one new investment fund, Medica [Investments], specializes in Israeli biotechnology, which has been frustrating and disappointing.“ Medica is Israel's premium biotechnology venture capital fund, with offices in Tel Aviv and Boston.

This private placement is XTL's third capital-raising exercise. The company first raised US$1.5 million in April 1996, when it was three years old.

With 30 employees, XTL has developed human immune systems in animal models for preclinical validation of new therapeutic approaches. Its focus is on development of human monoclonal antibodies to treat viral, autoimmune and oncological diseases. Established in 1993, the company has developed models of the hepatitis B and hepatitis C viruses, plus models for developing immunotherapy against tumors and autoimmune diseases including multiple sclerosis, as well as allograft rejection.

XTL transplants human lymphoid systems into its TrimeraXTL mouse system to create the human monoclonal antibody development vehicle. Its main competitor is Abgenix Inc., of Fremont, Calif. In February 1996, XTL signed a deal with Neoprobe Corp., of Dublin, Ohio. In July 1995, XTL entered a license agreement with BioChem Pharma Inc., of Laval, Quebec, using the TrimeraXTL model for screening antiviral agents against hepatitis B and hepatitis C.

The investment in XTL was made at a company value of $40 million, and mediated by underwriters Nomura International plc, of London, and Hambrecht & Quist LLC, of San Francisco. Medica and the Rothschild family's Biotechnology Investments, of London, increased their stakes in the company. *