Two venture capital funds, one from China and one from Taiwan, are investing $6 million in IOPtima at a company valuation of $20.7 million. Their investment is part of a $7.2 million financing round by the company, in which IOPtima's parent company Bio-Light Israeli Life Sciences Investments Ltd. (TASE:BOLT; Bulletin Board: BLGTY) is also participating with a $1.2 million investment. IOPtima's value for the investment is substantially higher than its NIS 3 million value value in Biolight's books. Furthermore, Biolight's $24 million current market cap is only slightly higher than the value of its subsidiary.
Bio-Light is a life sciences investment company with business in ophthalmology (including through IOPtima), and is the controlling shareholder in Micromedic Technologies Ltd. (TASE:MCTC), a diagnostics company with an NIS 11.7 million market cap. In the past, there were predictions that Bio-Light would enhance the value of its ophthalmology business by floating it as a separate company, and it is possible that the new investment is a step on the way to an exit or value enhancement of this type. Bio-Light will also spend $325,000 on buying minority holdings in IOPtima. After the current round of funding, its stake in the company will be 70%, compared with 87% at present. The venture capital funds from China and Taiwan will jointly own 29%, and private minority shareholders will own 1%.
IOPtima has developed and begun to market in a number of countries a system for glaucoma operations without penetrating the internal part of the eye. The proceeds from the financing round will be used mainly for the company's marketing efforts, and $1 million will be used to repay a past loan from Bio-Light.
Another investment from China
The investment agreement includes a clause stating that if IOPtima does not generate $13.7 million revenue within three years and/or does not submit a request for marketing approval of one of its products within two years, the investors will be allocated more shares in the company at no additional cost. If the company does not obtain marketing approval in the US within five years, or does not accumulate $13.7 million in revenue within three years, the investors can make a forced sale and offer their holdings to a third party at a value of at least $37 million, subject to first refusal rights for Bio-Light.
"The agreement constitutes confirmation from an external independent source of the quality of IOPtima's technology and business potential," said Bio-Light CEO Suzana Nahum-Zilberberg, "The investment agreement is strategically important for IOPtima and Bio-Light, and is expected to contribute to IOPtima's penetration and sales in global markets, and to the approval process for the product and approval for marketing it in the US and commercializing it in this significant market."
A few months ago, Chinese investor Patrick Lau invested NIS 26 million in Bio-Light for 18.9% of the company. Other shareholders include Israel Makov, the current chairman, and Dilip Shanghvi, founder of Sun Pharmaceuticals, India’s largest pharmaceutical company, who own 12.7% and 14% of the company, respectively.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015