MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL) today announced that it was considering two alternatives: selling the company's assets, and shutting down its business. If it occurs, a sale is expected to produce a few million dollars. MCS's current market cap is NIS 9 million. MCS is controlled by Accelmed, a company owned by Dr. Uri Geiger and Mori Arkin that invests in medical device companies (34%); Yelin Lapidot (15.8%); Pontifax (9%); Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) (7%); and Nissan Medical Industries Ltd. (TASE: NISA) (5.27%).
MCS, which held its IPO in 2006, developed a device to replace drugs for preventing blood clots in orthopedic surgery. The drugs are liable to cause internal bleeding, while the company's device is free of side effects. There are similar devices on the market, but the company hoped to distinguish itself from them with its clinical trial, which showed that its product was as effective as a drug. The trial was successful, but the company nevertheless failed to obtain reimbursement for its product from insurance companies, and therefore had trouble marketing it. After a period of stagnation, a struggle for control of MCS ensued in 2015 between Accelmed and the older shareholder in the company, Nissan Medical, ending in a takeover by Accelmed and a reduction in Nissan Medical's stake, in retrospect shortly before MCS's collapse.
In 2010, the company was on the verge of being sold to a US medical devices company for $70 million, but the sale did not go through. According to the company's reports for 2016, its revenue totaled $7.5 million in that year, an amount that many medical device companies on the TASE can only dream of, but less than MCS's $8.5 million in 2015 and $9.8 million in 2014. MCS lost $4 million in 2016. The company has $1.9 million in cash, which it said would last it until June 2017.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 30, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017