Life sciences sector in the US attracts largest investment in Q3, 2005

The life sciences sector (biotechnology and medical devices industries together) in the US outpaced the prior quarter with $1.6 billion invested in 155 companies in the third quarter of 2005, according to PricewaterhouseCoopers MoneyTree survey. For the first nine months of 2005, life sciences accounted for $4.2 billion or 26 percent of all venture investing. At the current rate, life sciences will meet or exceed 2004's total of $5.8 billion.

The software industry dipped in the third quarter, but retained its position as the largest single industry category with 185 companies capturing $1.0 billion. After a jump in the second quarter, the networking industry returned to historical levels with $339 million going to 34 companies. Other major industry categories were generally consistent with or slightly below investment activity seen over the prior year.

The biotech sector saw 94 deals and investments to the tune of $1.01 billion, the medical technology and equipment industry struck 61 deals in the third quarter to attract $557 million of investment. The average deal size was $10.7 million in the biotech sector, while that for the medical tech industry was $9.1 million in the third quarter.

Israel's life sciences sector attracts $60 million in Q3

The life sciences sector in Israel attracted approximately $60 million in the third quarter of 2005, as compared to approximately $70 million in the previous quarter and approximately $63 million in the corresponding quarter last year, according to theKesselman & Kesselman PricewaterhouseCoopers MoneyTree Survey reports. The biotechnology sector, which only attracted $10 million in the previous quarter (raised by five companies), has succeeded in improving its performance in the third quarter, with seven companies attracting approximately $41 million.

The marked increase in the total investments in this sector was mainly due to a single large deal, which amounted to approximately $25 million. In the medical devices sector, approximately $19 million was raised in Q3 by nine companies, as compared to 15 companies raising approximately $60 million in the previous quarter and 16 companies raising $31 million in the corresponding quarter last year. The average investment per company amounted to $2.1 million in the current quarter, as compared to $4 million in the previous quarter and $1.9 million in the corresponding quarter last year.

M&A DEALS IN JANUARY 2006

AMDL contemplates acquisitions in China

AMDL Inc., developer and marketer of tests for the early detection of cancer and other serious diseases, announced that it is continuing due diligence with Jade Capital Group, Ltd for the acquisition of Jiangxi Jade Biochemistry Pharmacy Co. Ltd and Yangbian Yiqiao Biochemistry Pharmacy Co. Ltd. Financial statements are being completed and GAAP audited statements should be completed by January/February 2006. "The company is also continuing to gather data requested by the US Food and Drug Administration. AMDL's primary objective remains receiving FDA clearance to market our DR-70 test in the US FDA clearance to market would simultaneously increase market awareness and acceptance in international markets," said Gary L Dreher, CEO, AMDL. AMDL is headquartered in Tustin, California, and is the inventor, developer and marketer of the DR-70 non-invasive cancer blood test, which has demonstrated its ability to detect the presence in humans of up to 13 cancers 84 percent of the time overall.

PharmaFrontiers acquires rights for rheumatoid arthritis vaccine

PharmaFrontiers Corp., Chicago-based company involved in the development and commercialization of cell therapies, announced the acquisition of an exclusive worldwide license for the intellectual property rights and research results of an autologous T cell vaccine for rheumatoid arthritis from the Shanghai Institutes for Biological Sciences (SIBS), Chinese Academy of Sciences of the People's Republic of China.

The US Centers for Disease Control (CDC) estimates that more than two million adults in the US have rheumatoid arthritis, an autoimmune disease. Spending in the US on the treatment of rheumatoid arthritis is projected to grow to $9.5 billion annually by 2013, according to Decision Resources, an independent research firm focused on the pharmaceutical industry.

The SIBS' initial human clinical trial results indicate that T cell vaccination induces immune responses that correlate with clinical improvements measured as reductions in ACR50 (American College Rheumatology (ACR) criteria, which measures joint swelling and tenderness and other factors such as pain and disability) and reductions in rheumatoid arthritis laboratory parameters.

Pursuant to the license agreement, in exchange for an initial payment and a running royalty on the sale of commercialized products, PharmaFrontiers receives the exclusive license and all information and data related to the SIBS' clinical trials involving the T cell vaccine.

PainCare acquires Desert Pain Medicine Group

PainCare Holdings, Inc., a leader in the delivery of pain management solutions, including interventional pain management, minimally invasive spine surgery, orthopaedic rehabilitation, ambulatory surgery centers and diagnostics, announced that it has acquired Desert Pain Medicine Group, a California-based pain management practice operating three offices in Palm Springs, Yucca Valley and Rancho Mirage, California.

Based on the pro forma historical financial performance of the practice, PainCare expects Desert Pain to contribute approximately $4 million in annual revenue and $1.2 million in operating income each year to the company.

Procyon acquires Cellpep

Procyon Biopharma Inc., a biotechnology company developing innovative therapeutics in the fields of cancer and HIV/AIDS, and Cellpep S.A., a French private biotechnology company developing therapeutics in oncology and infectious diseases, has announced that they have entered into a definitive acquisition agreement under which Procyon has offered to acquire all of the outstanding securities of Cellpep in exchange for a number of common shares equal to $39.1 million in value to be issued to the Cellpep shareholders. A $18.1 million concurrent private placement of special warrants and units has also been completed.

Procyon also announced that it has made a secured loan of $1.9 million to fund the operations of Opep Pharma Inc., the Canadian manufacturing subsidiary of Cellpep S.A. This will allow the newly formed entity to substantially increase its future gross margin in the manufacturing area. Following the completion of the transaction, Procyon intends to change its name to Ambrilia Biopharma Inc.

Norwood to acquire Bestewil

Norwood Immunology Ltd, a company focused on the rejuvenation of the immune system, announced that it has entered into a call option to acquire all the share capital of Netherlands-based Bestewil Holding Ltd. Bestewil is the 100 percent owner of Virosome Biologicals Ltd.

Virosome Biologicals is developing and commercializing a proprietary platform enabling technology for vaccines, which is based upon the combination of an adjuvant with virosomes - achieves a significantly enhanced immune response to an antigen

challenge. The adjuvant specifically interacts with Toll-like Receptors (TLRs).

The consideration for the transaction will be up to $30.7 million ($25 million in NIM shares and $6.5 million in cash), subject to achieving certain milestones.