The US Centers for Medicare & Medicaid Services (CMS) (Medicare for people over 65 and Medicaid for people with very low income) has announced its agreement to provide reimbursement to insurees for use of a device made by Israeli company Insightec. The device treats essential tremor (ET, tremor not due to Parkinson's Disease). Insightec's treatment is based on MRI-guided focused ultrasound that heats and ablates undesirable brain tissue with great accuracy without damaging surrounding tissue and bone.
Elbit Medical Technologies, which controls Insightec with a 22% stake, has a NIS 247 million market cap. In addition to this holding, Elbit Medical also holds 18% of Gamida Cell.
Up until now, reimbursement for Insightec's treatment was provided in 10 US states, mainly on the East Coast, and positive approval drafts have been filed in 22 more states, so it appears that the insurance will soon cover the treatment in 38 US states.
Insightec's revenue totaled $32 million in 2017, 28% more than in 2016 and nearly 100% more than in 2015, before the ET product was launched. The company's loss has risen apace: from $24 million in 2015 to $28 million in 2016 and $32 million in 2017. In its report for 2017, Insightec said it had $14 million in binding orders for 2018.
Insightec's current leading product also recently entered a multi-center trial for treatment of movement disorders resulting from Parkinson's Disease. The company recently signed an agreement for marketing of its products in cooperation with Siemens in addition to GE, Insightec's existing partner, and hopes that this change will also expand the market. Insightec plans to extend the device's capabilities to treatment of other neurological diseases, such as neuropathic pain, epilepsy, and others. The company also has a product for ablation of issue outside the brain that it uses to treat benign uterine tumors and malignant secondary bone tumors. Insightec intends to extend this treatment to endometriosis and prostate cancer.
Elbit Medical held a bond issue earlier this year in order to repay a loan from Elbit Imaging, its parent company. The company raised NIS 210 million, and immediately used NIS 30 million of the proceeds, leaving it with NIS 180 million. Elbit Medical said that it would conduct no further business measures other than maintaining its holdings in Insightec and Gamida Cell, which is preparing for a Nasdaq IPO over the coming year. An exit from this holding could enable Elbit Medical to repay some of its bonds.
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2018
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