OrthoScan raising second-round $3m to expand European marketing

Israeli med-tech startup OrthoScan is in the process of raising $3 million financing.

The company's founder, Gideon Sturlesi, told TheMarker that the company is negotiating mainly with strategic investors, and with a number of foreign venture capital funds.

The financing round, the company's second, is scheduled to remain open to new investors until the end of January 2003, he said.

OrthoScan is developing an intelligent radiation-free scanning device that the physician wears on the finger. The device generates a three-dimensional image of the spine.

Its chief purpose is to track the development of conditions such as scoliosis curvature of the spine, a fairly common condition among children 9 to 16 years of age, mainly girls.

Traditional diagnostic and tracking methods involve X-rays four times a year, with each session consisting of multiple exposures to get images of different angles of the spinal deformities. The high rate of exposure can lead to cancers, including breast cancer.

Sturlesi says the company's Ortelius 800 system has received FDA and CE approvals for marketing in the United States and Europe, respectively. It is already being sold to hospitals, imaging clinics and other customers throughout Europe, he added.

The company's latest backing will go to bolster its marketing in Europe. Sturlesi sees the company breaking even in early 2004, he said.

Despite receiving the FDA nod, OrthoScan has not launched activity in the United States. It may start after a third financing round.

OrthoScan, established in 2000, employs 20 people at its facility in Yokneam. In its first round the company raised almost $2 million from Biomedical Innovations, a European life-sciences venture fund, and private Israeli investors.

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