Elbit Medical Technologies Ltd. (TASE:EMTC) today announced that its subsidiary InSightec Image Guided Treatment Ltd., in which it holds a 31.6% stake, had signed a non-binding memorandum of understanding with a major international imaging company for joint adaptation of their devices.
InSightec's commercial devices are currently compatible only with imaging devices made by GE, which also holds a 10% stake in Insightec. The announcement did not disclose the international company's name, but the file put on the Tel Aviv Stock Exchange (TASE) Maya website, named Siemens_160416, reduces the level of uncertainty.
Siemens is one of the world's leading manufacturers of imaging devices, together with GD and Royal Philips. Last year, GE, formerly the most prominent investor in InSightec and also its marketer, sold part of its holdings in the company, mainly to the York Capital Management fund, the new controlling shareholder in Insightec.
According to InSightec vice chairman Dr. Kobi Vortman, "GE decided last year to sell part of its investment in the company, following which it agreed to waive its exclusivity and allow us to work with other companies."
"Globes": What caused GE to waive its exclusivity and reduce its investment?
Vortman: "GE is currently focusing on diagnostics, while we make devices for treatment, not diagnosis. In addition, we market our product with a focus on doctors giving treatment, and less on radiologists, on whom GE focuses. In the past, GE invested in the company in order to expand the MRI market, and I believe it also wanted to give preference to our device in this market, but it is now motivated more by its focus on the diagnostics market."
InSightec's ExAblate system makes it possible to burn tissue in the body without damaging other tissue, as a substitute for surgery. It focuses ultrasound energy from several directions on the tissue designated for burning. The MRI device is used to aim the ultrasound. The company's leading commercial application is a device for removing benign uterine tumors, and there is also a commercial product for treating secondary tumors in the bones of cancer patients.
Last year, the company launched in Europe a device for removing brain tissue without opening the skull, initially for treatment of tremors not caused by Parkinson's Disease. The company hopes that the product will be approved for marketing in the US this year. InSightec lost $24.2 million in 2015, compared with a $17 million loss in 2014, and its 2015 revenue totaled $16.1 million, 29% less than in 2014.
Published by Globes [online], Israel business news - www.globes-online.com - on April 17, 2016
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