Sources inform ''Globes'' that life sciences boutique investment house Ferghana Partners Group has picked Magnolia Capital Partners to represent it in Israel.
Magnolia Capital managing director Irit Hillel said, “As a result of deals we made with Thomas Weisel Partners for mature life sciences companies, we realized that there was no solution for newer companies in this sector. The agreement we’ve signed with Ferghana can be a financing and strategic solution for these young companies.”
Financing for early-stage life sciences companies which have graduated from technology incubators but have not yet obtained investment from venture capital funds, or have reached the interim stage between venture capital investment and an IPO or acquisition, is a major problem for the sector in Israel. Hillel and Feghana Partners managing director William J. Kidel believe that Ferghana can increase the financing available for Israeli life sciences companies thanks to its ties with international market sources.
Ferghana specializes in “long tail” ties with financing and strategic groups suitable for biomedical start-ups. The company has ties with ten leading international funds that specialize in the life sciences, as well as with hundreds of small specialist funds that Israeli entrepreneurs do not necessary know. Ferghana also collaborates with both big pharma and hundreds of mid-sized pharmaceutical companies that are seeking to buy technologies or collaborate with start-ups.
“Globes”: At what stage ought companies contact you?
Hillel: “Most of the companies we’ll work with will probably be at the effectiveness clinical trial stage. However, we also have solutions for younger companies. We invite companies to contact us even at the preclinical stage. We can also help new start-ups build applications that will better suit what the big companies are looking for.”
Hillel added that Magnolia Capital and Ferghana would compete against the Tel Aviv Stock Exchange (TASE) to some extent. “Many companies go to the TASE as a last resort, after financing from venture capital funds runs out, or because there aren’t enough venture capital funds for all the worthwhile companies. We’re offering them an alternative.”
Kridel says, “I’d advise Israeli companies not to go to the TASE unless they can obtain a company value of at least $80-100 million. Companies that raise capital at a lower valuation simply set a low value for themselves. We can obtain additional private financing for these companies so that they can go to the stock market with a higher value.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 28, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007