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Angiosonics Becomes Technology Holding Company

Fresh financial backing and a renovated business plan have given Angiosonics Inc. of Morrisville a new focus that has so far resulted in the spin-out of a subsidiary dedicated to developing body-fat liquefying technology.

Angiosonics was founded in 1989 in Tel Aviv, Israel, by Dr. Uri Rosenschein to develop therapeutic ultrasound technologies for a variety of indications. Product platforms for the delivery of ultrasound therapy include a minimally invasive catheter-based system and a non-invasive external delivery system.

The patented technology can deliver both focused and pulsed energy to target tissue without heating the skin or intermediate tissues.

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Angiosonics moved to North Carolina in 1996 and began to focus primarily on the manufacture and sale of a catheter-based ultrasound product that broke up blood clots in veins. But demand was low and costs were high, so the company changed gears to focus on attracting potential partners to finance some of the more popular applications of the ultrasound technology.

A reorganization created a technology holding company that will license individual applications to new subsidiaries with dedicated funding from third-party sources.

"We need a partner," said Hans Beinke, chief executive officer. "That is our rule now."

With a recent investment from Tyco Ventures, the venture capital unit of Tyco International Ltd. of Pembroke, Bermuda, Angiosonics was able to launch Lipolysis Inc., a subsidiary dedicated to the development of a non-invasive therapeutic ultrasound system that liquefies body fat.

The device contains a hand-held paddle that is glided over the targeted area, delivering an ultrasound pulse that doesn't damage the skin but loosens and liquefies a small to moderate amount of body fat that is eliminated naturally by the body. Current methods of body fat reduction surgery are invasive and require suctioning devices to remove the fat from the body.

Angiosonics estimates that the 2001 U.S. market for all types of lipolysis therapy is $2.8 billion.

In addition to the Tyco investment and subsequent spin-off of Lipolysis, Angiosonics recently received an undisclosed round of financing from three principal investors that included Gemini Israel Funds of Tel Aviv, Israel.

"We are very pleased that these prominent investment firms are encouraged by recent promising activities for Angiosonics in the areas of lipolysis, anti-restenosis, noninvasive deep vein thrombolysis, and external cardiac reperfusion," Beinke said. "Each of these new applications represents a market opportunity in excess of $1 billion in the United States alone."

The company is in discussions with a number of strategic and financial partners about funding research and development activities for non-invasive thrombolysis and anti-restenosis. The thrombolysis therapy for deep vein clots in the legs represents a $1.1 billion market, while the restinosis therapy to prevent blood vessels from narrowing is a $1.3 billion market, according to the company.

Angiosonics is also trying to generate interest in other applications of the technology, such as cancer therapy, angiogenesis, litholysis, targeted drug/gene delivery, treatment for stroke, and treatment of thrombosed hemodialysis access conduits.

In many of these areas, basic research has been completed and the company has obtained intellectual property rights. But additional resources will not be dedicated to these areas until project-specific funds and/or strategic partnerships are secured.

Technology Industry

Angiosonics Becomes Technology Holding Company

BT Catalyst, May, 2001

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