Israeli Biotechs Rally on M&A, State Aid; Bio Light Surges 332%

By Tal Barak Harif and Alisa Odenheimer


March 30 (Bloomberg) -- Israeli biotechnology shares avoided this quarter's slump in global stocks after Johnson & Johnson's buyout of a medical-equipment maker ignited takeover speculation and the government pledged money for research.


Clal Biotechnology Industries Ltd., Israel's second-largest biotech company, doubled and Bio Light Israeli Life Sciences Investments Ltd. surged 332 percent after J&J's buyout of Omrix Biopharmaceuticals Inc. Medical Compression Systems (DBN) Ltd. jumped 80 percent this month as it sold a stake to investment firm Accelmed.


"Investors are speculating which companies will be bought next," said Noa Weisberg, an analyst at Israel Brokerage & Investments Ltd. in Tel Aviv. The credit crunch makes it more likely the firms will agree to be bought as they struggle to borrow, she said.


The 92 percent average gain by Israeli biotech stocks this year outstripped the 15 percent rally in emerging-market information technology shares and trounced the 11 percent slump in the MSCI World Index. Most of the stocks still trade below their initial public offering prices and are valued at less than half of their global competitors relative to cash, according to data compiled by Bloomberg.


Herzliya-based Accelmed wants to invest $2 million to $4 million for stakes of at least 33 percent in companies, Chairman Uri Geiger said in a telephone interview. The investment firm, formed this year to target medical-device makers, will invest 8 million shekels ($1.9 million) for a 26.1 percent stake in Medical Compression Systems, which developed a device to help blood circulation, the Or-Akiva-based company said March 26.


Johnson & Johnson


"These are companies in which you can identify opportunities," said Geiger.


Israel's biotechnology industry gained investors' attention in 2007 when the Tel Aviv Stock Exchange made it easier for research and development firms to sell shares by lowering requirements for capital, minimum investments and the number of shareholders. Fourteen biotechnology companies raised almost 1 billion shekels in share sales that year.


Speculation about acquisitions was fueled after New Brunswick, New Jersey-based Johnson & Johnson, the world's largest maker of healthcare products, agreed on Nov. 24 to pay $438 million, or $25 a share, for Omrix, a New York-based developer of equipment to stem bleeding that has most of its research and manufacturing in Israel. The stock traded at $16.52 on Nov. 20, two trading days before the deal was announced, and at $10 at the IPO in 2006.


Copaxone Treatment


Biotech shares are also rising because the government pledged last month to add about 350 million shekels to the budget of the Office of the Chief Scientist, which funds research programs by technology firms. Israel set up a separate 250 million-shekel biotechnology fund in February to support start-ups through clinical trials and to encourage private investment.


The plan is part of government efforts to tackle what Israel predicts will be the worst recession since its creation in 1948. The central bank forecasts the economy will shrink by 1.5 percent this year.


Israel has patented more medical devices than any other nation per capita, according to the Israel Life Science Industry organization and the U.S. Patent and Trademark Office. Achievements include the Weizmann Institute's Copaxone treatment for multiple sclerosis, bought by Petah Tikva-based Teva Pharmaceutical Industries Ltd. in the 1990s, and Given Imaging Ltd.'s capsule-sized camera for diagnosing digestive ailments in 2001.


Rebound


Gains for biotechnology stocks are surpassed in Israel only by Petah Tikva-based Isramco Negev 2, which surged 787 percent this year after its joint discovery of what may be enough natural gas to supply half the country's energy needs for the next 20 years. Four of the 37 biotechnology stocks listed on the Tel Aviv Stock Exchange fell this year.


The rally may not last, said Steven Tepper, an analyst at Ramat Gan, Israel-based brokerage Prisma Capital Markets Ltd. "Some of what we've seen this year is a rebound as these companies dropped a lot last year," he said.


Even after doubling in the first quarter, Clal Biotechnology is down more than 60 percent from its first day of trading in June 2007, according to Bloomberg data. Israel's 10 biggest biotechnology shares trade at an average 6.8 times their cash, compared with a price-to-cash ratio of 14 for 38 biotechnology stocks worldwide monitored by Bloomberg.


'Legitimacy'


Clal Biotechnology, controlled by Nochi Dankner, who also owns Israel's largest supermarket chain, biggest mobile phone provider and largest insurer, rallied 105 percent this year after receiving approval from the European Medicines Agency for the third phase of its trial to treat skin transplants.


Shares of the Tel Aviv-based company peaked Feb. 18 when Teva, the world's largest generic drugmaker, said it will exercise options to buy $10 million of shares in the Clal's diabetes treatment unit. The shares have declined by 14 percent since then.


"The fact that a company like Teva invests in some of these biomedical companies gives them a certain legitimacy," said Idan Azulay, managing director of Epsilon Mutual Funds in Tel Aviv, which manages $386 million and owns shares of Clal Biotechnology and Jerusalem-based BioCancell Therapeutic Inc. Biocancell has climbed 222 percent this year after receiving U.S. approval to conduct tests to treat ovarian cancer.


Bio Light, which helps treat obesity, glaucoma and cancer, jumped 212 percent on Jan. 7 when the Ramat Gan-based company announced a breakthrough in identifying cervical cancer and pre- cancerous cells. Bio Light shares were last at 0.52 shekel, less than a third of the price when the stock began trading in 2005.


Merger Offers


Brainsway Ltd., Israel's third-largest publicly traded biotechnology company, jumped 213 percent from a low in November. The Jerusalem-based maker of medical devices to treat brain disorders reached an agreement with New Jersey-based Yorkville Advisors LLC in December to provide $15 million over three years. The stock last traded at 6.63 shekels, more than twice its 2007 IPO price.


XTL Biopharmaceuticals Ltd., a developer of neuropathic pain treatments, said in January that it's evaluating "several" merger offers. The stock jumped 41 percent on March 19 after announcing it will buy the rights to use a patent that will prolong life for patients with blood cancer. The shares were last at 0.06 shekel, a fraction of the price of 3.61 on its first day of trading in 2005.


"We can groom these companies until we get out of the global crisis," said Geiger. "If they don't have much debt, they can be seen as good investment opportunities."


To contact the reporter on this story: Tal Barak Harif in Tel Aviv at tbarak@bloomberg.net To contact the reporter on this story: Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net.

Stem cells concern biotech leader

Arizona's scientists and citizens are missing out on a potential lucrative source of research funds and medical benefits because of the state's strict limits on embryonic stem-cell research, a top biotechnology official said.


James Greenwood, president of the Washington, D.C.-based Biotechnology Industry Organization, said that Arizona and other states that limit such research methods may not realize the benefits from President Barack Obama's move earlier this month to reverse a ban on federal funding of the controversial research.


"That seems to be a no-brainer," Greenwood said Friday of allowing research of stem cells that are harvested from embryos discarded by fertility clinics. "They are going to be destroyed one way or another."


Arizona's restrictions on embryonic stem-cell research come from two laws passed by the state Legislature. One prevents scientists from conducting research on cells collected from an aborted fetus. Another state law prohibits any public or government research institute from using federal, state or private money on "human cloning," which is defined in a way that blocks the scientific process involved with embryonic stem-cell research, according to the Arizona Attorney General's Office.


Arizona's ban does not apply to other types of stem-cell research, including projects involving adult stem cells or stem cells harvested from a newborn's cord blood. In fact, several Arizona scientists have pursued stem-cell research projects not involving embryonic stem cells.


Arizona's biotech interests largely have not pushed for a change in law to allow embryonic stem-cell research. Some believe the technology may make the ethical issue surrounding such research moot as new methods are developed.


"My hope and expectation is the science will allow research beyond the use of embryonic stem cells, and it will get the same results," said Bob Eaton, president and chief executive officer of the Arizona Bioindustry Association.


Overall, the biotech industry faces more pressing challenges, said Greenwood, who was in Phoenix last week to meet with biotechnology interests. Many companies are fighting for survival because of the recession and investors' aversion to the high-risk, high-reward industry.


A BIO survey released in January showed 30 percent of publicly traded biotech companies reported less than six months of cash on hand, and nearly half all public bio companies had less than a year's worth of cash.


Biotech companies that found a friendly market as recently as two years ago also are noticing the change. Just one of 20 companies that planned an initial public offering last year followed through with the stock offering. Phoenix-based Insys Therapeutics was among the companies that delayed an IPO because of the unfavorable market conditions.


Greenwood, a former U.S. representative from Pennsylvania for 12 years before being named BIO's top executive in January 2005, said his organization is pushing several congressional initiatives to aid the ailing industry.


BIO favors patent legislation that would protect a company's intellectual property for a period of up to 14 years. It can take a biotech firm a decade or longer to develop and market a new drug. Legislation now in Congress would cut down patents to as few as three years, giving biotechnology companies and their investors little incentive to pursue costly research and development, Greenwood said.


The industry group also favors health-care reform that provides universal access, incorporates market-based approaches and promotes innovation, including new drugs and tests.


If lawmakers adopt a plan that hastens the approval and use of generic drugs, it would result in substantial savings for consumers. But Greenwood said it would effectively eliminate the biotechnology industry's incentive to invest in research and development of new drugs, diagnostics and medical devices. Such a move would ultimately gut economic development, resulting in fewer high-paying jobs and less innovation. "We lead the world in this industry," Greenwood said.


But he said significant challenges, including health care and patent reform, threaten to undermine bio firms.


"Investors need to feel comfortable with making large investments," Greenwood said.

BIO-key(R) Granted Patent for Trusted Biometric Device Security Solution

WALL, N.J., March 26, 2009 /PRNewswire-FirstCall via COMTEX/ ----BIO-key International, Inc. (OTC Bulletin Board: BKYI), a leader in finger-based biometric identification and wireless public safety, announced today that the U.S. Patent and Trademark Office has approved the issuance of a patent titled "Trusted Biometric Device," which covers a simple, yet secure method of protecting a user's biometric information.


(Logo: http://www.newscom.com/cgi-bin/prnh/20050509/BIOKEYLOGO)


This patent, (US Patent Number 7,502,938 issued March 10th, 2009) protects the privacy of the user and provides enhanced security for the organization performing the user identity authentication. It covers the transmission of information from the point the information is collected at the biometric reader until the data reaches the computer or device that is authenticating the user's identity. Previous BIO-key patents (including 7,454,624, 7,415,605, and 7,117,356) protect BIO-key's security solutions for transmission of private sensitive authentication data from the client device to a central server authentication point, defending enterprise or centralized authentication applications from security breaches. BIO-key's patents also support the use of standards including the Trusted Computing Platforms, which are embraced by security professionals worldwide.


For the majority of systems today, the biometric data is transmitted "in the clear" with no encryption or protection. As the result, the information is susceptible to malicious attacks from hackers for theft or redirection. Securing the information from the point where it is initially captured (the fingerprint reader) to the computer that is using this information to determine the identity of the user, is a major concern that must be addressed in all applications. This BIO-key solution patent further addresses this need which improves the resulting security of the system, while also offering greater privacy to the user.


"We recognize the need to address not only the privacy of the individual but the security of the total identity transaction. This is the latest in a series of patents granted to BIO-key that secure the biometric template, the communications of the template and the processes handling the identity transaction. It provides another layer of security for our highly accurate, scalable biometric identity solution," stated Mira LaCous VP Technology and Development at BIO-key International.


"With this patent, BIO-key continues to expand our biometric identity solution portfolio. We have the technology to protect the biometric identity transaction from end-to-end. This can be quickly and cost effectively adopted by fingerprint hardware manufacturers as well as commercial application providers that utilize 'remote' authentication. Applications for internet banking, retail and healthcare can easily implement this solution to provide a secure, accurate and convenient method to identify both customers & staff. By deploying this added feature, organizations can instill consumer confidence in the security and accuracy of their solution to attract new and existing customers to their applications that are accessed over the internet," added Mike DePasquale, BIO-key's Chief Executive Officer.


About BIO-key


BIO-key International, Inc., headquartered in Wall, New Jersey, develops and delivers advanced identification solutions and information services to law enforcement departments, public safety agencies, government and private sector customers. BIO-key's mobile wireless technology provides first responders with critical, reliable, real-time data and images from local, state and national databases. BIO-key's high performance, scalable, cost-effective and easy-to-deploy biometric finger identification technology accurately identifies and authenticates users of wireless and enterprise data to improve security, convenience and privacy and to reduce identity theft. Over 1,000 police departments in North America use BIO-key solutions, making BIO-key the leading supplier of mobile and wireless solutions for law enforcement. (http://www.bio-key.com)


Company Contact: BIO-key International, Inc.
Bud Yanak
732-359-1100

SOURCE BIO-key International, Inc.


http://www.bio-key.com

Copyright (C: 2.64, 0, 0%) 2009 PR Newswire. All rights reserved

Books - Thames: The Biography

In this perfect companion to London: The Biography, Peter Ackroyd once again delves into the hidden byways of history, describing the river’s endless allure in a journey overflowing with characters, incidents, and wry observations.


Thames: The Biography meanders gloriously, rather like the river itself. In short, lively chapters Ackroyd writes about connections between the Thames and such historical figures as Julius Caesar and Henry the VIII, and offers memorable portraits of the ordinary men and women who depend upon the river for their livelihoods. He visits all the towns and villages along the river from Oxfordshire to London and describes the magnificent royal residences, as well as the bridges and docks, locks and weirs, found along its 215-mile run. The Thames as a source of artistic inspiration comes brilliantly to life as Ackroyd invokes Chaucer, Shakespeare, Turner, Shelley, and other writers, poets, and painters who have been enchanted by its many moods and colors.


In his signature entertaining and informative manner, Ackroyd allows the reader to dip into chapters in his own spirit, or to follow the Thames from source to sea.
Illustrated with maps and photographs, THAMES is a vivid, highly original mosaic of life by and on the water.

Karo Bio drug cuts cholesterol on top of statins

By Lewis Krauskopf


ORLANDO, Fla., March 29 (Reuters) - Patients taking statin cholesterol-lowering drugs cut their bad LDL cholesterol levels as much 32 percent more when they added an experimental medicine from Karo Bio AB (KARO.ST), according to mid-stage study results released on Sunday.


The drug, eprotirome, also cut triglycerides 15 percent to 33 percent, according to results presented at the American College of Cardiology (ACC) scientific meeting in Orlando. The company had previously said the trial was successful, but did not release specifics.


The results suggest eprotirome has the potential to open a new avenue for treating heart disease, according to a press statement released by the ACC. Eprotirome is designed to target thyroid hormones receptors in the liver that regulate cholesterol.


"This study provides hope for a new add-on treatment of dyslipidemia for patients who are inadequately controlled with, or intolerant to, current lipid-lowering therapy," said Jens Kristensen, Karo's vice president of clinical development.


The 12-week study followed 189 patients who had high cholesterol despite already taking low to moderate doses of two other statins, Merck's (MRK.N) Zocor and Pfizer's (PFE.N) Lipitor. Patients were randomly assigned to one of three doses of eprotirome or a placebo.


Patients on eprotirome cut their LDL cholesterol by 21 percent to 32 percent. Subjects on the placebo cut their LDL 6 percent, as they were likely more compliant with their statin drugs while in the clinical study, according to the company.


There were no observed changes in heart rate or cardiac rhythm and the drug was well-tolerated, the ACC statement said.


Sweden's Karo said the next step will be to confirm the results in a pivotal Phase III study.


Karo said last August the Phase IIb study was successful in lowering LDL and triglycerides, but did not release detailed results at the time. Nonetheless, Karo shares soared on the news.


The company has said it plans to find a partner to help advance eprotirome to the market. (Editing by Maureen Bavdek)