Israeli venture capital fund Challenge (Etgar) has invested about $1 million in XTL Biopharmaceuticals (LSE:XTL).

Challenge usually invests between half a million to $5 million in its portfolio companies. It did not reveal the value at which it invested in XTL, a Rehovot-based developer of treatments based on human monoclonal antibodies and small molecules. It focuses on hepatitis B and C, as well as other infectious diseases.

Managing partner Gil Hermon confirmed that the fund had picked up XTL shares n the market. He declined to disclose how many. "XTL has one product in phase II testing and another in phase I," he said. "It also has $50 million cash in hand, which should give it breathing room for (product) development."

XTL trades at a market value of $80 million. For 2001 it posted a net loss of $12.7 million, 130% greater than the $5.5 million it lost in 2000. Its revenues in 2001 reached $2.4 million, up 60% from the previous year.

During 2001 the company entered into several strategic relationships, including with Cambridge, Massachusetts-based Dyax Corporation (Nasdaq:DYAX), Biostapro AB of Sweden, and Dong Wha Pharmaceutical Industries of South Korea.