The share price of Exalenz Bioscience Ltd. (TASE:EXEN) rose 16.2% by mid-afternoon, after the company announced the global launch of the BreathID Hp, a next-generation device in the company’s non-invasive BreathID diagnostic test for the detection of H. pylori, a leading cause of peptic ulcers and which increases the risk of gastric cancer.
Exalenz also announced that it has formed a new direct sales and clinical support organization in the US to better address customer needs. The new strategy will provide improved support for the company’s innovative diagnostic system, intended for in-office and urgent care facility use. The company already has three distributors in the US.
Exalenz is following the path taken by other Israeli medical devices companies, such as Itamar Medical Ltd. (TASE:ITMR) and MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL), which decided to pad their US distribution networks with direct sales, after the distributors failed to create the breakthroughs in sales that the companies had hoped for.
Exalenz's management predicts NIS 15 million in sales in 2013 and NIS 42 million in 2014, after NIS 13 million in sales in 2012.
Today's announcement comes as Exalenz plans a secondary offering on the basis of a draft prospectus filed a week ago. A few months ago, CEO Lawrence Cohen said, "We'll need to raise NIS 30 million before the end of this year." This will probably be the amount of the planned offering.
Exalenz's largest shareholders are Mori Arkin, with a 56% stake, and Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), with 13%. Arkin has invested tens of millions of shekels in the company, even during its bad times, and changes in management and strategy. He led a NIS 20 million rights issue by the company in 2011, but when it tried to raise NIS 25 million later that year on the basis of a draft prospectus, his promise to provide half the sum was not enough and the offering was cancelled. Arkin continued his support alone.
Published by Globes [online], Israel business news - www.globes-online.com - on July 15, 2013
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