Elbit Medical Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT) subsidiary InSightec Image Guided Treatment Ltd. closed a $30 million internal financing round. InSightec said that the proceeds of the investment would be applied to expand R&D, marketing and sales, and for general corporate purposes.
Investors were Elbit Medical Imaging subsidiary Elbit Ultrasound (Netherlands) BV, General Electric Company (NYSE: GE) subsidiary GE Capital Equity Holdings Inc., MediTech Advisors LLC, and some InSightec directors and officers. The investment was in the form of Series A preferred convertible shares. Elbit Ultrasound invested $19.8 million, boosting its stake in InSightec to 53%.
Elbit Medical Imaging president Shimon Yitzhaki said, "Following InSightec's receipt of the European CE approval for pain palliation of bone metastases based on clinical results demonstrating that this technology has the potential to become an important treatment alternative for this patient population, and the receipt of the FDA IDE approval for starting a phase III clinical trial in the US for the treatment of bone metastases, InSightec has decided to increase and accelerate its R&D efforts towards the simultaneous development of InSightec's technologies which are necessary for the expansion into new oncology areas such as: bone metastases, prostate cancer, breast cancer, liver tumors and brain tumors, in order to receive FDA approvals for those applications and treatments within a shorter period. Meeting this task shall enable InSightec to speed up the bringing of its products into the market for the benefit of the potential patients and the cancer defeat struggle."
Yitzhaki added, "Treatment of uterine fibroids has already obtained certification and we have $20-25 million in sales a year, even though hospitals don’t yet receive reimbursement for our product from the large insurance companies. We're in negotiations for insurance indemnification and we believe that we'll get it from three large insurers in 2008, which will greatly boost sales."
"Globes": You originally planned to float InSightec in 2005 and sales haven’t risen substantially since then. Are you disappointed?
Yitzhaki: "Not at all. InSightec is an amazing breakthrough company. The board tells us that it will be worth billions, maybe more than all our real estate deals. Just a little patience is needed."
Yitzhaki noted, "We believe that with the products in the pipeline and insurance reimbursement, within two or three years, we'll reach hundreds of millions in sales."
Will you reopen your IPO plans?
"We're waiting on the IPO until we have insurance reimbursement from a number of insurers as well as FDA approval for at least one of our cancer treatments. There are also other options besides an IPO."
Published by Globes [online], Israel business news - www.globes-online.com - on November 29, 2007
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