Sources inform "Globes" that drug development company VBL Biogenics Ltd. has raised $40 million. Investors in the latest round of funding include a large US venture capital fund, and previous investors including Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA; TASE:TEVA), Pitango Venture Capital, Max Herzberg and Aurum Ventures MKI Ltd.

VBL has raised more money from private investors than almost any other Israeli biomed company and prior to the current round of raising funds, the company had raised $76 million. The company was founded by CEO Prof. Dror Harats, a senior physician at Sheba Medical Center who specializes in blood disorders. VBL is based in Or Yehuda and has 35 employees.

VBL is developing two major drugs. The lead product is an anti-inflammatory treatment for psoriasis which is in Phase II B clinical trials. The second drug is a cancer treatment which selectively destroys blood cells that are reaching the cancer growth. VBL expects to soon begin a next stage clinical trial after success in its Phase II trial.

Over the past few years, VBL has been examining the option of an IPO on various stock markets around the world. Nasdaq has been considered but is not a viable option until the company can report good results in its cancer drug trial or excellent finds in its psoriasis treatment trial.

At the start of 2008, VBL was close to an IPO on London's AIM but withdrew its prospectus after it became clear that it would not achieve its hoped for market value, in part because of the market situation. At the same time, VBL was in talks with Pfizer over commercialization of one of its products but the negotiations did not yield results.

Generally speaking, a company such as VBL fetches a better price if purchased rather than in an IPO. This is in all the likelihood the preference of the investors, most of them venture capital funds. But the company's clinical trials have been going on for a relatively long time with the support of most of its investors, as the latest round of fund raising shows. It is reasonable to assume these investors expect a breakthrough in the next year or two.

Published by Globes, Israel business news - www.globes-online.com - on October 4, 2010

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