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Medis Technologies spins off new company called Cell Kinetics Ltd.
March 2006
by Lisa Espenschade  |  Email the author


NEW YORK–In a move to separate disparate business activities, Medis Technologies is spinning off its CellScan work into a new entity called Cell Kinetics Ltd. Cell Kinetics will commercialize equipment for monitoring living cells in combination with chemotherapeutic drugs, and Medis will continue developing fuel cells.
Robert Lifton, chairman and CEO of Medis, says the split will enable analysts and investors to "make a decision as to whether they're interested in one of these companies" without buying both. Lifton believes the spin-off will "create significantly greater values in the Cell Kinetics company than presently exist because today people that are looking at Medis are looking at it essentially [as fuel cells]."
The decision to form Cell Kinetics arose when Medis scientists discovered a method for keeping 70 percent of cells alive for over 48 hours in the CellScan system by coating a grid within its cytometer. Medis expects the lengthier observation time to provide greater utility to research institutions. CellScan can monitor the activity of up to 10,000 single cells within individual wells, and Lifton says researchers or clinicians can use it with cancer cells to "measure the response for the cancer cell to proposed chemotherapy agents." CellScan works, says Lifton, by "measuring the reaction of the cell and the death of the cell in a very efficient way," analyzing cell activity based on fluorescence intensity and polarization.
"In in vitro situations we can see whether or not that cancer cell is living or dying," says Lifton, then gauge potential responses to chemotherapies, offering patients and oncologists "some help to determine what to try to use in the chemotherapy cocktail." Lifton says CellScan can be used for cell study beyond cancer and, though it cannot be used for "mass screening for drugs," if researchers conduct "intense work with a limited number of drugs, we can help them enormously."
CellScan has already been used in studies, says Lifton, noting that clinicians at Memorial Sloan-Kettering Cancer Center "were very taken with it" and suggested that Medis make the technology available to researchers. Medis is collecting additional CellScan clinical data and preparing paperwork for FDA 510k instrumentation certification approval, with the goal of completing its filing in 2006.
Analyst Gary Giblen, a managing director at Brean, Murray , Carret & Co., agrees that the spin-off will benefit Medis's life sciences side. The CellScan business, he says, "needs a specific CEO that can lead it forward because the Medis management has expertise in raising money and then they have people who run the R&D and production on the fuel cell side, but they just have the scientists, the R&D, who came up with this breakthrough." An executive with medical contacts, he says, could help market the technology and create value for shareholders because "it's best to monetize the value of CellScan rather than to have it mixed in."
Medis is searching for a CEO for Cell Kinetics, and Lifton, noting discussions with investment bankers, mentioned several options for financing Cell Kinetics. He says Medis shareholders will become shareholders in Cell Kinetics, though the two companies will be distinct.

With the CellScan discovery so new, Giblen says it's too early to predict market size, but characterizes it as of "enormous value. And there's no competitive technology." As a tool that will be "uniquely useful for general cancer research" and hospitals around the world, though, Giblen expects "rather huge markets," including in developing countries, because of the prevalence of cancer.

Code: E030611



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