Despite the cooling of the primary market in Tel Aviv in the past few months (following a record year in which more than 100 new companies were floated on the Tel Aviv Stock Exchange), there are those who are still welcomed with open arms, and one of them is Dr. Shimon Eckhouse, who at the end of last week floated a second company within just over six months, after the IPO by SofWave in May. Eckhouse founded aesthetic medicine companies Syneron and Lumenis, which were floated on Wall Street and sold for huge sums, and was also a partner in the founding of heart valve company Ventor, which was sold for over $300 million.
The latest public company from the Eckhouse stable is Epitomee, developer of an ingestible pill for treating obesity and for delivering drugs to the stomach. As first reported by "Globes", the company sought to raise NIS 155 million at a pre-money valuation of NIS 620 million. In the end, it raised NIS 162 million at a valuation of NIS 632 million. The offering was led by Leumi Partners Underwriting and Barak Capital.
At the same time as the offering, global food company Nestlé, an investor in the company and its marketing partner, converted a $7 million loan to equity, bringing the total amount raised in the offering to NIS 187 million.
The pill developed by Epitomee expands in the stomach, creating a sensation of fullness. The pill is made of material defined as a food ingredient, and it disintegrates within a few hours, enough time to eat a reasonable meal and swallow another satisfying pill. The company's CEO is Dr. Dan Hashimshony, one of the founders of Dune Medical Devices.
In August 2020, Epitomee received external confirmation of the validity of its technology and the product's commercial potential when it signed an exclusive marketing agreement for its lead product with Nestlé Health Science. Epitomee will be entitled to receive $115 million in advance and milestone payments, as well as royalties on the product. An advance of $10 million has already been paid under the agreement.
In its last fund-raising round as a privately held company, led by Eckhouse in 2019, $8 million were invested in the company at a valuation of just $27 million.
The main shareholders in Epitomee are Eckhouse (28%), Chinese fund Star Concept (9.3%), Oriella, a company indirectly held by Rodney Hodges (7.7%), and companies owned by Idan Ofer and Udi Angel (altogether 16.5%).
According to its prospectus, Epitomee will start commercial production and sales in early 2023. Its product has the CE mark and the company has filed for approval from the US Food and Drug Administration. The product will cost $100-200 for a month's worth of pills for use several times daily. Epitomee has additional products, for treating diabetes, prediabetes, and other indications.
Epitomee was founded as Tulip Medical in 2005 by Eckhouse and Doron Marco. It has accumulated losses of some $30 million.
Published by Globes, Israel business news - en.globes.co.il - on December 13, 2021.
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