Biomed companies raise millions on TASE

Biomed firms find it harder to issue bonds, and have issued mostly shares and warrants.

The capital market may still be uncertain if the recession is behind us or not, but whatever the final decision may be, Israeli biomedical companies are raising capital as they make progress on their treatments.

Two biomed companies just completed offerings on the Tel Aviv Stock Exchange (TASE) and one is in the process of raising capital. Mazor Surgical Technologies Ltd. (TASE:MZOR) yesterday completed the institutional stage of an at least NIS 40 million offering of stocks and warrants; MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL) is on a road show for an offering to raise several million dollars, which will apparently be a wholly public offering; and earlier this week Kamada Ltd. (TASE: KMDA) raised NIS 95 million in an issue of convertible bonds and NIS 35 million in a rights issue. Kamada's current market is NIS 645 million.

This is the second wave of biomed offerings on the TASE. During the first wave in July, Can-Fite BioPharma Ltd. (TASE:CFBI) and Bio-Light Israeli Life Sciences Investments Ltd. (TASE:BOLT) held secondary offerings, and D-Pharm Ltd. (TASE: DPRM) held its IPO. They were not alone.

Fundraising by biomed companies is in line with fundraising by companies in other industries, although most TASE-listed firms prefer to issue bonds. It is harder for biomed companies, some of which do not have sales or regular cash flows, to offer bonds, which is why most of the companies have issued equity - shares or warrants.

In addition, most biomed companies have seen the price of their share soar in recent months. Even if most sources in the industry will assert that these companies, as a group, are underpriced compared with their US peers, some of them still want to take advantage of the rise in the share price to raise capital.

Published by Globes [online], Israel business news - - on October 21, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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