Boston Scientific (NYSE: BSX) has invested $5 million in Israeli medical device start-up company BrainsGate, as part of a $10 million financing round, according to TheMarker's sources. BrainsGate of Ra'anana is developing a technology for drug delivery into the central nervous system (CNS). Other contributors to the current financing round were existing shareholders ? Pitango ventures, Alice Ventures, Infinity and SFKT.

More than 95% of drugs intended for the brain today suffer from insufficient effectiveness due to the Blood Brain Barrier (BBB), which acts as a filter. The barrier denies access to the CNS from most large molecule drugs, and creates a major limitation for drug delivery in cases of CNS disorders, leading to lack of efficient treatment of neurological diseases.

BrainsGate's technology is a device implanted in the upper region of the mouth. The implant provides an electrical stimulation to a nervous system outside the brain. This system widens the blood vessels and opens the BBB for transition of large molecules such as drugs against brain tumors, Alzheimer and Parkinson. The company is currently conducting clinical trials in Europe, and the investment proceeds will be used to continue these trials and to develop other applications for the technology.

Boston Scientific first entered the field of neurological devices in June 2004 with the purchase of Advanced Bionics, a developer of micro-electronic implants for treatment of nervous disorders, for $740 million. Upon completion of the current financing round, investments in BrainsGate total approximately $17 million.

BrainsGate was founded in 2000 by the physicist Dr. Yossi Gross and Prof. David Yarnitsky, head of the neurological department in Rambam Hospotal, Haifa. Gross is among the founders of VisionCare, developing solutions for the blind and visually impaired, which was jointly funded by Pitango and Infinity. BrainsGate is headed by Avinoam Dayan, formerly CEO of Biosense, a Johnson and Johnson company.

Published by TheMarker [online], www.themarker.com - on Sunday, April 11 2005