Nazareth-based deep brain stimulation (DBS) device company Alpha Omega, founded and run by husband and wife team Imad and Reem Younis, received its first external investment this week. GIBF (Guangzhou Sino-Israel Biotech Investment Fund) is investing $7 million in setting up a joint venture of the company and of the fund in China. The fund's Israel operation is managed by former chief scientist Dr. Yehoshua (Shuki) Gleitman and Avner Lushi. Imad and Reem Younis own the company, and the current investment will not change the ownership structure.
Talking to "Globes", Imad Younis said that Alpha Omega's annual revenue now amounted to over $10 million. "From time to time we receive investment proposals, but at the moment we are not in need of investment in our main activity. Had we received external investment when we set out, perhaps we might have been able to speed up our activity more, but we're content - we have always been on an upward trend, even if it has been moderate."
Alpha Omega is already active in China, and sells its products there, alongside activity in Europe, the US, and Israel. The investment and the founding of the joint venture are intended to expand its business. GIBF was set up by senior figures from Israel's healthcare industry together with the local government in Guangzhou. The fund's model is investment in joint ventures in China owned by the fund and by Israeli companies seeking to do business in China. Through GIBF and its Chinese partners' connections, entrepreneurs obtain easier access to the Chinese market, without foregoing an actual presence in China and direct contact with the market.
100% Israeli market share
Alpha Omega's story is interesting because it is a medical device company set up without external investment that has nevertheless overcome many obstacles that similar Israeli companies have encountered. It was founded in 1993 as a sub-contractor in the design and production of medical devices on the basis of Imad Younis's training in electrical engineering. The company gradually specialized in the design and production of products for brain treatment and surgery.
In the late 1990s, Alpha Omega teamed up with two inventors: Prof. Hagai Bergman of the Department of Medical Neurobiology at The Hebrew University-Hadassah Medical School, who was one of the first to identify areas of the brain stimulation of which can contribute to the treatment of Parkinson's Disease; and Prof. Alim Benabid of the Joseph Fourier University in Grenoble, who was among the first researchers to apply Bergman's approach to actual treatment of patients through electrical stimulation of the brain using external electrodes. Bergman and Benabid are considered leaders in DBS treatment.
Today, DBS is an accepted treatment for diseases such as Parkinson's, epilepsy, and tremors from causes other than Parkinson's. The treatment involves the implant of electrodes in the patient's brain in a complicated surgical procedure. The electrodes and the entire treatment are sold by companies like Medtronic, Abbott, and Boston Scientific.
Alpha Omega is in the no less critical area of guiding the electrodes to the correct location, both through planning software and through physical tools. Alpha Omega's products are sold to hospitals independently rather than as part of a package from the major companies. "When the skull is opened, the brain changes its shape and volume slightly, and so the electrodes cannot be guided with precision only on the basis of pre-recorded imaging," Imad Younis explains.
In Israel, all the medical centers that carry out DBS surgery use the company's product. "We have a 100% market share in Israel," says Reem Younis. In the past, Medtronic marketed its electrodes system together with a guidance product, and was in effect a competitor of Alpha Omega in this area, but it is no longer active in it. "We are the leading company in the world in this area," Reem Younis says.
In the US, Alpha Omega set up a subsidiary company that markets its products there through a directly employed sales team. In China, where the company began to be active five years ago, it operates in a similar fashion. "At first, we signed a distribution agreement with a local distributor who said he would take upon himself the submission of the product to the Chinese regulator, but after he did so he kept us on a short rein. We realized that it was better to develop connections and work independently, or with an entity that is both Chinese and Israeli, such as GIBF." In Europe, the company sells through distributors.
Alpha Omega is the leading and oldest Arab-owned medical device company in Israel. Imad and Reem Younis are proud of the fact that managers who grew up in the company have gone on to found four other companies with Arab management and ownership. Of the company's 85 employees (a number expected to grow shortly to 100 around the world), 60 are employed in Nazareth. "The workforce is very varied. Arabs and Jews, women and men, in various professions," says Reem Younis. "Our workers are very committed. We arrange meetings of our entire team with patients who have undergone our treatment, and the patients tell the team and us how much the treatment has changed their lives - both their own and those of their families, who no longer need to care for them. As far as we are concerned, this is holy work."
Published by Globes, Israel business news - en.globes.co.il - on December 11, 2018
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