REHOVOT, Israel — Shiloov Medical Technologies Ltd., developer of the HIV ShiloovTube for early AIDS detection, completed an agreement for up to $10.75 million in equity financing from Biomedical Investments Ltd., Mivtach-Shamir Investments, Evergreen Canada-Israel Investments Ltd. and Genesis Partners L.P.
The company also appointed as chairman of the board of directors Benad Goldwasser, who is managing director of Biomedical Investments.
Of the $10.75 million, $8 million is committed in exchange for a majority share in Shiloov. The investors have the option of purchasing another $2.75 million in equity, boosting their ownership to 60 percent of the company.
The new investment will be used, in part, to acquire most of the interests of the majority of previous American investors in Shiloov, including The Travelers Group, ending the legal action taken by those investors. Those previous investors will retain 11 percent of non-voting shares in Shiloov. (See BioWorld International, Dec. 3, 1997, p. 2.)
Proceeds Will Support Product Approvals
"Shiloov plans to use the funding to complete procedures required for obtaining regulatory agency approval for the company's premier product, the HIV ShiloovTube," said Tamar Jehuda-Cohen, president and CEO of Shiloov.
"We are pleased that Professor Goldwasser has agreed to play an active role in Shiloov," said Jehuda-Cohen. "He brings a wealth of international experience working in the medical technologies field. His proven track record in guiding the growth of biomedical companies and in bringing new medical products to global markets will make an important contribution to Shiloov."
Goldwasser cofounded a number of successful medical technology companies, including Medinol Inc. and Optinol Inc. He was the main force behind the Medinol deal in which the stent producer was acquired for $350 million by Boston Scientific Corp.
Goldwasser is a professor of surgery at Tel-Aviv University Medical School and until recently served as chairman of the department of urology at the Chaim Sheba Medical Center. An active medical researcher, he has authored or co-authored more than 120 original manuscripts, 20 book chapters and two books.
"Israel offers some great investment opportunities in the field of medical devices and biomedical technology. Shiloov was one of the more attractive because it developed a novel technological platform that is being applied to infectious diseases and to cancer," said Goldwasser.
The company's first product is the HIV ShiloovTube, a blood pre-treatment device that improves the detection of HIV. The ShiloovTube enables diagnosis within days, eliminating the several-month lag time for antibodies to develop in the body.
Shiloov's natural market of the HIV ShiloovTube is diagnostic laboratories, insurance companies, hospitals, clinics and blood banks around the world.
The HIV ShiloovTube already has received regulatory approval in Mexico and is under regulatory review in Brazil, Israel, South Africa, Kenya and the U.S.
The company also is developing a new platform for early detection of the virus that causes hepatitis C.
"More common than HIV infection — an estimated 200 million blood tests for hepatitis C are carried out annually worldwide. More than 10 percent of the infections are fatal and about one in three results in chronic liver failure, eventually requiring transplantation," said Goldwasser.
"With the new funding we will also be in a position to accelerate development of our new product for the early detection of hepatitis C infection," said Jehuda-Cohen.
Shiloov, a privately held company, was founded in 1994 by Jehuda-Cohen with six years already invested in its technology.
Biomedical Less Than A Year Old
Goldwasser cofounded Biomedical Investments eight months ago with three partners: Leonard Abramson, a director of Aetna Inc. which merged last year with U.S. Healthcare Inc.; Ted Arison, an international investor and recently acquired major shareholder in Hapoalim Bank, Israel's largest bank; and Teva Pharmaceutical Industries Ltd., Israel's largest pharmaceutical company.
Mivtach-Shamir Investments, in Tel Aviv, is a wholly owned subsidiary of Mivtach-Shamir Holdings, a publicly traded company on the Tel-Aviv Stock Exchange. The company has extensive holdings in technology-based companies and real estate.
Evergreen Canada-Israel Investments Ltd is a venture capital and general investment company. It manages more than $150 million in assets and has invested in more than 50 companies, including a number of biotechnology and medical device companies, such as Smartlight, in Haifa, Oridian, in Jerusalem, and Optinol in Neve Ilan.
"We believe Shiloov's platform technology to be fascinating," said Alan Adler, managing director of Evergreen. "It has a multitude of applications, there are strong market needs, and we are very impressed with Tamar [Jehuda-Cohen] and the Israeli team.
"With the new board of directors in place, Benad Goldwasser in the chair and a solid group of professionals, we are very confident about the future of Shiloov."
Evergreen's partners include, BancAmerica Robertson Stephens and Weiss Peck and Greer, both of San Francisco.
"We are looking at two or three other biomedical investments in the near future," said Adler.