BrainsGate raises $27.5m

This is the first investment in Israel in over a year by Johnson & Johnson's VC arm.

13 August 08 19:48, Gali Weinreb

Medical device company BrainsGate Ltd., a subsidiary of Elron Electronic Industries (Nasdaq: ELRN; TASE: ELRN), has closed its latest financing round, raising a total of $27.5 million. Johnson & Johnson Development Corporation (JJDC), the Johnson & Johnson venture capital arm, led the round, and was joined by Agate Medical Investments LP, which invested $5 million.

Most of BrainsGate's existing investors also joined the latest round, including Elron, which invested $6.6 million, and former Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) president and CEO Israel Makov. Elron now holds 23.3% of the company. BrainsGate's other shareholders are Pitango Venture Capital, Alice Ventures, Boston Scientific Corp. (NYSE: BSX), and Israel Infinity Venture Capital. The finance was raised at a company value of $50 million before money. BrainsGate is headquartered in Caesarea and employs 50 people.

This is the first investment in Israel in over a year by JJDC. The company has invested in a number of Israeli companies, among them GeneGrafts Ltd., Impulse Dynamics, Neurosurvival Technologies Ltd., Mazor Surgical Technologies Ltd. (TASE:MZOR), Edwards Lifesciences Israel (formerly Percutaneous Valve Technologies), Omrix Biopharmaceuticals Ltd. (Nasdaq:OMRI), NESS-Neuromuscular Electrical Stimulation Systems Ltd., Medigus Ltd. (TASE:MDGS), and Topspin Medical Inc. (TASE:TOPMD).

JJDC recently announced it would be focusing on three fields, drug delivery, metabolics, and electrical neuron-stimulation for stroke therapy. BrainsGate fits into the third category exactly.

The current financing round is actually an extension of a planned $12 million round led by Elron, which BrainsGate announced earlier this year.

Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2008

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