Artificial pancreas start-up Beta-O2 Technologies Ltd. is in advanced negotiations with Boston Scientific Inc. (NYSE: BSX) to give the latter the option of acquiring Beta-O2 in stages. Under the proposed agreement, Boston Scientific will initially acquire 10% of Beta-O2 for $4 million, and will later buy additional stakes subject to progress in product development and regulatory approval.
At the end of the process, Boston Scientific can acquire full control of Beta-O2. The final amount, including royalties, could exceed $1 billion.
Beta-O2 is developing a proprietary implantable artificial pancreas, called the B02 TM. The device is designed for the treatment of Type 1 diabetes, and a subgroup of Type 2 diabetes. Type 1 diabetes patients are insulin dependent. The artificial pancreas uses the active ingredient, a group of beta cells that are found in the pancreas, which monitor blood glucose levels and secrete insulin accordingly.
The B02 TM is a small device, implanted subcutaneously in a 15-minute minimally invasive outpatient procedure performed under local anesthesia. It contains islets of Langerhans (insulin-producing cells), which are continuously oxygenated and nourished through Beta-02 proprietary technology. Beta-O2 believes that it can bring its artificial pancreas to market by 2011, assuming all goes well.
Diabetes results when these beta cells fail to function properly. Until now, the only way of obtaining beta cells is from deceased donors and implanting them into the patient. The biggest problem with this procedure is that the cells die from lack of oxygen.
Beta-O2’s artificial pancreas creates living beta cells, seaweed (similar to seaweed used to wrap sushi), and a light source. The seaweed uses the light source to make oxygen, which the beta cells use to produce insulin for the body. The seaweed consumes the carbon dioxide byproduct of this production. The seaweed is kept alive in water droplets. The entire device is the size of a pacemaker.
The B02 Tm is already undergoing small animal testing at laboratories, and will soon begin trials on large animals. Since the artificial pancreas is a completely new device, clinical trials at every stage will be particularly scrupulous, and will probably take a long time and cost a lot of money. However, if successful, it could be a boon to diabetics, replacing all current diabetes devices and even insulin shots.
Beta-O2 was founded by endocrinologists Pnina Vardi and Constantine Bloch, and by serial entrepreneur Dr. Yossi Gross. The company’s CEO is Chanan Schneider. The company has raised $7 million to date. IVC Online states that the first investor was Vitalife Life Sciences Venture, followed by Pitango Venture Capital and the government’s Heznek start-up fund. Sources inform ''Globes'' that Boston Scientific invested a few million dollars in the company six months. That investment was unrelated to the current negotiations.
Published by Globes [online], Israel business news - www.globes.co.il - on February 6, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007