Medical cannabis company BreedIT, which made headlines in 2014 after its share soared in over-the-counter trading in the US, is no longer in the cannabis business. The company has quietly switched sectors to treatment of lice. The new company, now under a different name, but still controlled by financier Itschak Shrem and a group of investors associated with him, is now managed by CEO Zvi Yemini, cofounder and owner of ZAG Industries and other plastic industry companies. Investors in the company include Check Point Software Technologies Ltd. (Nasdaq: CHKP) cofounder Marius Nacht, who recently founded a life sciences investment fund. BreedIT's current market cap is only $6.69 million.
Three years ago, BreedIT made a big splash. Under the ownership of Shrem, Kfir Zilberman, ex-Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) Ben-Zion Weiner, and other Israelis, the company, which merged with a US stock exchange shell tried to develop a big data system for smart planning of grafts in order to develop various characteristics. The possibility of applying this to cannabis was considered very promising, and the company share price soared 318% in a few weeks, giving the company a $25 million market cap at its peak. The share has since lost 99% of its value.
BreedIT rode the wave of medical cannabis companies on US stock exchanges at the time. This wave yielded several strong companies and a real market for medical marijuana and related products. This stock exchange trend, however, was stopped in its tracks in May 2014, shortly after BreedIT hit its peak, when the US Securities and Exchange Commission (SEC) warned investors in companies involved in medical cannabis. The SEC cited five companies in this sector for publishing inaccurate information, stating that two of them had had also illegally manipulated their share prices. BreedIT was not one of the five, but it lost investors as a result of the warning, and failed in the development of its product. The company eventually sold its business for less than $2 million.
The company has now traded in its medical cannabis dream for a slightly more modest, but no less elusive, one: a lice-less world. In late October 2016, BreedIT merged Novomic, a private company, into itself, subsequently changing its name to TechCare and changing its management to the team that arrived from Novomic.
Zvi Yemini founded Novomic on the basis of technology from the Weizmann Institute. The company's product is like a cap worn on the head that releases into the hair a natural material in the form of a gas that kills lice and their eggs. The hat is designed for multiple use, as is the capsule containing the material. The company's executives also include Yossi De Levie, who founded Hyro Industries jointly with Yemini. A decade ago, De Levie founded Microdel, a company that commercializes patents and develops them into products, from where Novomic originated (that is where the "mic" part of its name comes from). TechCare's product has been approved for marketing in Israel and in Europe. TechCare had $686,000 in cash as of the end of the third quarter, and says it plans to raise an additional $10 million. The company has had no revenue in the past two years, and lost $1.1 million in the first nine months of 2016, of which $211,000 was spent on its research and $946,000 on management and general expenses.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 5, 2017
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