MA Industries (Makhteshim Agan) (TASE: MAIN) subsidiary LycoRed Natural Products Industries Ltd. yesterday completed its acquisition of start-up PalsaMed Ltd. The companies did not disclose the amount of the deal, but sources inform “Globes” that it was a few million dollars, mostly in the form of an investment in PalsaMed for further product development, marketing, and a royalties agreement on future sales. $350,000 has been invested in Palsamed to date. The company has four employees.
Palsamed was founded three years ago at Misgav Technology Center. It graduated from the incubator a year ago. PalsaMed develops nutritional additives for reducing cholesterol. Dr. Saif Abu-Mouch, director of the liver clinic at Hillel Yaffe Medical Center and Dr. Jamal Mahajna, who worked for Pfizer (NYSE:PFE; LSE:PFZ) for seven years, founded the company. Both Abu-Mouch and Mahajna will work as advisors for LycoRed.
PalsaMed's product, called PALS, is a pharmaceutical compound derived from edible plants found in Israel. Preliminary tests on laboratory animals found that PALS reduced cholesterol levels by 35%. Dr. Abu-Mouch said there was already preliminary evidence that PALS could also help people. "This is an edible plant known to Israel's Sephardic Jews and Arab population. In a preliminary trial, we fed the plant to the sample group for a month. A subsequent test found a 35% drop in levels of bad cholesterol, known as LDL (low-density lipoprotein)."
LycoRed specializes in producing active pharmaceutical ingredients (APIs) from plants. One of its products is a botanical drug derived from tomatoes. Over the coming years, LycoRed will invest in human clinical trials to test the assertion that PALS lowers cholesterol. Later, it will invest in product development and marketing.
Udi Alroy, of Makhteshim Agan, said yesterday, "The moment it is clear beyond a doubt that the assertion is true, we will begin development, and decide whether the product will be marketed as a nutritional supplement, for example in oils or margarine, or as a botanical drug. This deal will enable LycoRed to expand its basket of products."
Misgav Technology Center CEO Steve Rhodes said today that the acquisition of PalsaMed was a milestone for the incubator. "Misgav supports and invests in competitive, aggressive and successful companies. Today's acquisition is recognition of the success of ventures developed at Misgav Technology Center."
Rafael (Israel Armament Development Authority Ltd.) and the Misgav Regional Council founded Misgav Technology Center in 1992. The incubator invests in and supports life sciences and homeland security start-ups. Two months ago, Misgav Technology Center's board announced that it had signed an agreement with Trendlines International Ltd., under which the latter would invest $2 million in Misgav and its portfolio companies. Based in Shorashim, Trendlines specializes in developing strategic marketing for the international market.
Published by Globes [online], Israel business news - www.globes.co.il - on March 31, 2005