D Medical Industries Ltd. (TASE: DMDC) (formerly Aryt Systems) has filed a prospectus for an offering with the Israel Securities Authority. The company will reportedly raise $3-4 million, with the precise figure depending on market conditions.
Gal Erez, Zeev Bronfeld, Meni Mor, and Eyal Sharatzky acquired D Medical in 2004 for just $100,000. The company’s current market cap is NIS 45 million. Bronfeld and his partners also control Biocell Ltd. (TASE: BCEL) and Biomedix Incubator Ltd. (TASE:BMDX). They acquired 72% of Nilimedix Ltd. based in Technion Entrepreneurial Incubator Co. Ltd. (TEIC) through D Medical. Nilimedix develops non-motorized insulin pumps for automatic delivery of accurate doses for diabetics. Nilimedix, a spin-off from G-Sense, is in the first stages of developing a device for the continuous measurement of blood sugar levels. An initial $300,000 has been invested in the company, which is wholly owned by D Medical.
In January 2005, D Medical raised NIS 11 million in a private placement, and raised an additional NIS 6.8 million in May in an IPO led by Poalim IBI Underwriting and Investments Ltd. (TASE:PIU). D Medical said at the time that it would open negotiations with the US Food and Drug Administration (FDA) and European Medicines Agency (EMEA) for CE Mark certification for marketing approval. The company also said that would sign contracts with strategic distributors in early 2006.
So far as is known, D Medical has not yet filed an application with the FDA. Although the company has a contract with an Israeli distributor, the phrase “strategic distributors” usually means contract with international companies for sales in foreign markets.
D Medical apparently filed a prospectus for an offering at this time in order for Nilimedix to complete development of a prototype inhaler and in view of the contract with the Israeli distributor. The Israeli distributor is partly owned by Nilimedix’s former CEO, who resigned a few days ago when the contract was signed because of conflicts of interest. Despite this progress, it is not known when and if Nilimedix will obtain FDA and EMEA marketing approval for its inhaler, or how they will be marketed in the US and Europe.
Nilimedix’s inhaler is an insulin pump for the delivery of regular measured doses of insulin. There are already various kinds of insulin pumps on the market, but Nilimedix’s device is the first non-motorized inhaler, which makes it smaller and requires less frequent replacement of batteries.
Published by Globes [online], Israel business news - www.globes.co.il - on July 10, 2006
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