BioLight will sell its stake in IOPtima in installments at a company value of $30-56 million.
BioLight Israeli Life Sciences Investments Ltd. (TASE:BOLT; Bulletin Board: BLGTY), chaired by Israel Makov and managed by CEO Suzana Nahum-Zilberberg, has signed a memorandum of understanding for the sale of its leading product, the only one directly generating revenue for the company, to a Chinese company. BioLight's share was up 8% today, pushing the company's market cap up to NIS 280 million.
IOPtima, a company that was part of BioLight's historical portfolio before Makov's involvement with the company, developed laser surgery technology for treatment of glaucoma. BioLight holds 70% of IOPtima. Under the memorandum of understanding, which for the present is non-binding, the Chinese company, Chengdu Kanghong Pharma will invest $7 million in IOPtima for 19% of that company's shares at a $30 million company value. The Chinese company will receive an exclusive license to market IOPtima's product in China. After six months, the Chinese company will acquire additional shares in IOPtima from the existing shareholders, including BioLight, thereby increasing Chengdu Kanghong Pharma's IOPtima stake to 60%, for $17.2 million, reflected a $42 million company value.
In two further stages scheduled for 2019 and 2021, the Chinese company will acquire the remaining shares in IOPtima at a price determined by IOPtima's profits, reflected a company value of $40-56 million.
BioLight's system for treatment of glaucoma is approved for marketing in China, Europe, Israel, Mexico, Peru, and Canada. IOPtima already has a Chinese subsidiary founded in order to market its products in this country.
Two months ago BioLight announced that a Chinese company was investing in BioLight itself, but this investment was called off when the Chinese government imposed restrictions on funds leaving the country.
BioLight needs money
BioLight's revenue totaled NIS 2.1 million in 2016, mostly from IOPtima, and the company lost NIS 21.8 million. The company burned NIS 27 million on current activities, leaving it with NIS 25 million.
If and when it receives revenue from the sale, BioLight will invest it in other products it is developing that have yet to reach the sales stage. These include a intra-eye implant for treatment of glaucoma, a product for diagnosing and guiding treatment for dry eye disease, and a product designed as a platform for transporting drugs within the eye. BioLight also owns 35% of Micromedic Technologies Ltd. (TASE:MCTC), a company developing cancer diagnostic tests.
It appears that although BioLight's vision is to found a collection of companies in a specific area enjoying synergy with each other, IOPtima is currently unsuitable for such an ophthalmology group, and will not become the marketing channel for the company's other products. This is probably because the company has not managed to generate substantial revenue, and also because unlike BioLight's other drugs, IOPtima's product is a surgical device, not a drug, test, or tool for guiding drugs. BioLight also needs the money that the IOPtima exit can provide.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 19, 2017