ALIVE Fund leads financing round for mitral heart valve maker Innovalve

ALIVE, the healthtech venture capital fund established by Bank Leumi, Maccabi Fund, which is associated with the Israeli health maintenance organization (HMO) Maccabi Healthcare Service, and Israeli medical centers chain Assuta, has announced its first investment. The fund led a $10.5 million investment round in Innovalve Bio Medical Ltd., a company established at the Sheba Medical Center that is in advanced stages of developing technology in the field of cardiology.

ALIVE announced earlier this month that it had secured $150 million from several central investors including Assuta, The Maccabi Fund, Bank Leumi, CBG Asset Management, an investment firm owned by U.K.-based businessman Vincent Tchenguiz and U.S. hospital chain Carilion Clinic. The fund’s directors are Prof. Rafi Beyar, former director of the Rambam Medical Center and dean of the Technion's Faculty of Medicine; Prof. Ari Shamiss who recently retired as CEO of the Assuta Hospital Network and previously managed the Sheba Medical Center; and Michel Habib, the former CEO of Hadasit Bio Holdings Ltd.

Innovalve grew out of inventions and patents developed by Sheba Medical Center experts Prof. Ehud Raanani the director of Sheba’s Cardiovascular and Thoracic Center and Dr. Boris Orlev, head of the center’s Mitral Valve Surgery Unit. The company has developed an artificial mitral valve that can be replaced using a minimally-invasive catheter to help treat patients suffering from heart disease. The company achieved successful results in experiments on animals and is set to apply for FDA approval for human trials in the coming months. Among Innovalve’s investors is Edwards Lifesciences, a leader in cardiological valves.

Insertion of valves is already providing a substitute to heart surgery in many cases, Prof. Beyar told Calcalist. “But Innovalve’s solution is the first of its kind for mitral valves, which poses a particular challenge because of its size and location in the heart. The company’s development may prove very significant for heart patients around the world.”

The ALIVE Fund focuses on investment in late-stage medical device and IT companies that are set for M&A within three to five years.

“We closely examine each company to figure out whether it is mature enough to invest in since each segment has different maturity characteristics,” Habib told Calcalist. “In the software sector, for example, we will only invest in a company that is already selling in the U.S. Companies in the cardiology or brain surgery fields are only suitable for investment once they start human trials. When it comes to orthopedic companies, it’s only after substantial sales in the U.S.”

Healthcare has become a particularly attractive field for investment, particularly following the coronavirus (Covid-19) outbreak, and quite a few large funds are active in it, what is your advantage?

“First of all, our team is made up of very veteran people, both medically and financially, including the former heads of Sheba Medical Center and Rambam Medical Center,” Habib said. “A second advantage is our official cooperation agreements with Assuta and Maccabi and with Carilion Clinic in the U.S., which offers us exceptional access to the most advanced doctors and medical departments in the world. After investing in a company, we are capable of promoting it in Israel and the U.S. through experiments, pilot programs, or sales agreements. This is something that no other fund in Israel and the world can do. A third advantage is our choice to focus on medical device companies, and hardware and software systems.”

“Israeli companies have an entrepreneurial advantage because of the data available to them and the tech training they receive, including in the military. When it comes to the number of medical companies, Israel is on the same level as the Silicon Valley, but here development is 20 times cheaper, “said Beyar.

And yet, we do not see many foreign funds that are active in the medical sector here.

“Many of them are active here through partnerships with local funds or only begin investing in later stages,” Beyar said. “These days, when it is more difficult to gain access to foreign funds because of travel restrictions, it is vital that Israeli funds take the lead and draw the foreign funds and corporations in their wake.”