Diabetes treatment co LabStyle raises $4.2m

The funds were raised through a private offering to US institutional investors.

LabStyle Innovations Corporation (Bulletin Board: DRIO), which develops diabetes management software and a medical device for diabetes testing using a mobile phone, has raised $4.2 million through a private offering to US institutional investors. The company has a market cap of $39.1 million. The offering was at $1.88 per unit of one common share and three quarters of one option, a discount on yesterday's share price of $1.95. The options may be exercised for five years, at a price of $2.25 per share, and include an anti-dilution mechanism.

LabStyle has raised $17 million to date to develop a mobile app that processes a wide variety of parameters, such as nutrition, exercise, weight, and even outdoor temperature, to give diabetes patients recommendations that are as accurate as possible on amounts of insulin they need to inject. The product’s app was recently submitted for US Food and Drug Administration (FDA) approval. The product was launched in December 2013, thus revenue has not yet been recorded. In the first nine months of 2013, LabStyle had a net loss of $14 million.

Two weeks ago investment bank Aegis gave Labstyle a "Buy" recommendation with a target price of $6 a share. Aegis, which also underwrote Labstyle's IPO, sees sales beginning this year and reaching $400 million by 2019.

Published by Globes [online], Israel business news - www.globes-online.com - on February 19, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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