With a laconic notice to the Tel Aviv Stock Exchange (TASE) yesterday, Bio-Light Israeli Life Sciences Investments Ltd. (TASE:BOLT) has closed subsidiary OBEcure Ltd., which tried to develop a drug for the treatment of obesity. Bio-Light's share price fell 0.2% today to NIS 0.358, giving a market cap of NIS 33 million, after falling 1.9% yesterday.
OBEcure was Bio-Light's flagship project when the company held its IPO in late 2005. Things changed, however, after the Phase II clinical trial (preliminary efficacy study) of the drug failed, followed by the failure of a study to test the efficacy of the drug to prevent obesity among menopausal women. Although the drug was found effective in preventing obesity among patients taking anti-psychotic drugs, the company announced a few weeks ago that it could not replicate the success.
OBEcure received funding from Eli Lilly Co. (NYSE: LLY), which provided thousands of dollars to finance the trial on psychiatric patients in exchange for first rights to the drug.
Bio-Light CEO Dr. Ami Eyal said, "The results were so inconclusive that there was no point in showing them to Eli Lilly."
OBEcure CEO Dr. Yaffa Beck said, "When one trial succeeds but several fail, it is hard to go on. It's possible that the molecule was not good enough." She is resigning from Bio-Light as well, following the closing of OBEcure.
Eyal said, "I think that the molecule was good, but we're not a $100 million company that can conduct more trials." He added that Bio-Light had considered selling the product to another company, but the announcement said that rights to the product were returned to Mor Research Applications Ltd.
OBEcure is the second portfolio company that Bio-Light has closed since it went public. Allergica, which was developing an antihistamine, was closed in 2008, in order to transfer its capital to other companies with greater potential.
Two down, two to go
Bio-Light's business model is to locate companies at the end of their financial rope, but with rights to interesting products. RedHill Biopharma Ltd., now preparing for an IPO on the TASE, has a similar business model.
The company raised NIS 74 million in a secondary offering shortly after its IPO. After closing two subsidiaries, Bio-Light has two left: IOptima Ltd., which is developing laser-based treatment for glaucoma, and Zetiq Technologies Ltd., which is developing techniques for rapid diagnosis of cancer cells.
Published by Globes [online], Israel business news - www.globes-online.com - on January 13, 2011
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