Israeli firms get funding, buyout offers despite war

Neither Hamas rockets nor bad press about Israel prevent several business deals for local companies

Laser beam production (Courtesy USAF)
Laser beam production (Courtesy USAF)

Israeli companies are still making their mark abroad, despite the conflict with Hamas terrorists. Two international concerns are dedicating funds to a local enterprise and snapping another in a buyout — undeterred by the rockets from Gaza, Israel’s military campaign there, and the often hostile media coverage.

In the latest deals, Ness Ziona-based Atox Bio announced that it has received $23 million in funding for its “flesh-eating bacteria” treatment, and California’s Newport Corporation announced that it was acquiring V-Gen, a Tel Aviv company that makes a range of laser products, including advanced fiber lasers, which use fiber optics to generate a higher quality and more accurate laser beam.

Atox has for the past several years been working on a cure for necrotizing soft tissue infections (NSTI), commonly known as “flesh eating” bacteria. NTSI develops when the streptococcus pyogenes bacteria enter the body, releasing toxins that kill tissue and affect blood flow. Atox developed a treatment for NTSI called AB103, based on technology licensed from Yissum, the technology transfer company of the Hebrew University of Jerusalem.

The investment round is being led by SR One, the venture capital arm of the British drug company GlaxoSmithKline, with the participation of the venture capital funds of Danish pharmaceutical company Lundbeck’s, and Israeli firm OrbiMed. The money will be used for a late stage clinical study of AB103, after successfully completing a Phase 2 study of the drug. Patients treated with AB103 in the study, the company said, saw speedier resolution of organ dysfunction, spent fewer days in the intensive care unit, required fewer days of assisted ventilation and needed fewer surgical procedures to remove infected tissue.

AB103 was recently granted Orphan Drug status by the FDA, a designation given to drugs that treat rare diseases for which most commercial drug firms do not develop treatments.

Dan Teleman, CEO of Atox Bio, said that the company “is very pleased with this financing round, led by reputable life science investors. This investment reflects our investors’ confidence in the company and validates our novel approach to treating severe infections. With this investment, we plan to advance AB103’s clinical development and further expand into new therapeutic categories.”

In Irvine, meanwhile, Newport Corporation, a top maker of laser and photonic technology for a wide variety of industries, said it was acquiring V-Gen for between $15 million to $20 million. V-Gen specializes in precision laser instruments for work in micro-machining, silicon scribing, fine processing, thin film cutting, glass processing, and other applications that require very precise and strong lasers.

V-Gen, said Newport Senior Vice President David Allen, “has a strong track record of growth and profitability, and we expect the acquisition to be accretive to our earnings immediately following the closing,” adding that it is “a recognized innovator with a significant intellectual property portfolio.” V-Gen’s 50 employees are expected to remain on the job, with Newport retaining its new Tel Aviv office as a research and development facility.

“We are excited to become part of Newport’s Spectra-Physics Lasers Group, which is a recognized leader in the laser industry,” said V-Gen CEO Dr. Eran Inbar. “Their worldwide sales and service network and complementary technologies will enable us to expand our business beyond what we could have achieved as a stand-alone company. Together we will provide innovative laser solutions for both existing and emerging applications.”

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