CNS treatment co BrainsGate raising $26m

Brainsgate

BrainsGate is developing a stroke treatment using a device to reinforce blood flow to the brain through electrical stimulation.

Medical device company BrainsGate, which develops treatments for Central Nervous System (CNS) diseases, is raising $26 million at a company value of $70 million before money. $11 million of the amount has already been invested, and the remainder will, be invested in the future, subject to certain conditions.

Elron Electronic Industries Ltd. (TASE: ELRN), a technology holding company that already owns 30% of Brainsgate, will invest $8 million in two stages of the current investment round. A global health sector company is leading the round, but Elron is not reporting the company's name. The company involved may be either Boston Scientific or Johnson & Johnson, both of which have already invested in BrainsGate, together with Israel Makov, a private investor.

BrainsGate has raised $70 million to date, including Elron's $21 million investment. $11 million was invested in the first stage of the current round, including $3.5 million by Elron. In the second stage, depending on an analysis of interim data from the clinical trial being conducted by BrainsGate and, subject to the consent of a majority of the company's investors, the remaining $15 million in the round will be invested, including $4.5 million by Elron, whose holding will remain at 30%.

BrainsGate is developing a stroke treatment, using an electrical device that makes is possible to reinforce the flow of blood to the brain through the use of electrical stimulation.

According to the company's financial reports, it had $4.4 million in cash as of the end of the third quarter of 2014.

The controlling shareholder in Elron, whose market cap is NIS 490 million, is IDB Development Corporation Ltd. (TASE:IDBD) subsidiary Discount Investment Corporation (TASE: DISI), with a 50.3% stake. The controlling shareholders in IDB Development are Eduardo Elsztain and Moti Ben-Moshe.

Published by Globes [online], Israel business news - www.globes-online.com - on January 25, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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