March 25, 2002

Galil Medical’s technology will allow doctors to kill cancer tumors by repeatedly freezing and thawing them.”You never know if you’ve killed off a cancer for good,” Galil Medical Israel general manager Uri Amir said. “You have to be very cautious when you say ‘full recovery.’ Full recovery is when you die of old age.”

Before that final knock on the door, Galil Medical will use cryotherapy to cure local cancers. Simply put, this means minimally invasive temperature-based therapies for treatment of both benign and malignant tumors, by freezing and thereby dissolving diseased tissue.

In January, an analyst report on the company stated, “Galil Medical has high potential to create added value in the coming year, depending on market conditions.” There might even be a public issue one day, though not anytime soon. The company is apparently holding a private placement at the moment, which it declines to discuss.

Galil was founded on the basis of technology developed by Rafael (Israel Armament Development Authority) to cool missiles. The step from missiles to medicine is straightforward. Galil Medical freezes malignant and benign tumors of the liver, kidneys and prostate. The technology has also been applied in gynecology to destroy myomas, benign but problematic tumors in the uterus. The company also has a cryoanalgesia treatment to dissolve arrhythmic heart tissue and instent restenosis treatment for coronary arteries (the development of blood clots after the insertion of stents).

The treatments use argon and helium to freeze and thaw the catheter that is inserted to the affected area. The tumor is frozen at minus 186 degrees Celsius. Tumors are normally destroyed at minus 40 degrees Celsius. Amir explains that the gasses alternatively freeze and thaw the tissue in a controlled manner, destroying the tumor.

Galil Medical’s treatments are most effective for early stage tumors, which are still small and simple to destroy. If the tumor has not spread, a single session is sufficient to remove it, Amir said. Both the gasses and the catheter templates are common and well-known hospital equipment. The company’s kidney and cardio-thoracic treatments are derived from existing brachytherapy treatment for early stage prostate cancer.

Galil Medical’s main competitor is Endocare of the United States, which offers similar oncology treatments, and took Galil to court a couple of years ago. Endocare accused Galil of violating its patent for a cryotherapy device to treat tumors, claiming Galil would cause it irreparable harm if it exhibited its SeedNet system at the American Urology Association convention in Atlanta in April 2000. Galil countered by stating that Endocare had copied its own cryotherapy catheters without permission.

The United States District Court, Central District of California ruled in favor of Galil. Amir said Endocare ultimately paid Galil $500,000 and was forbidden to use catheters with diameters of less than 2 mm for prostate treatments. Endocare could use catheters of this diameter for other treatments, but had to pay 4 percent royalties to Galil. Endocare uses a 3 mm catheter. “The catheter is cruder, which inhibits precise coverage of the tumor. You can really sculpt with our catheters,” Amir said.

Galil uses an alternative treatment for patients whose previous treatments were unsuccessful. For example, treatments for prostate cancer range from invasive (surgical removal) to drug treatments. Amir said brachytherapy, including the insertion of isotopes and radiation therapy, does not have an impressive success rate, and cannot be repeatedly used to guarantee the destruction of a tumor. “Once the whole procedure is over, further treatment of the gland is impossible. Certainly not after radiation therapy, which hardens the prostate,” Amir said. However, its value as an initial treatment is the same as alternatives.

The U.S. Food and Drug Administration has already approved Galil’s SeedNet system for the treatment of prostate cancer, which is now covered by Medicare and Medicaid. There are 1,500 prostate cancer cases a year in Israel and 200,000 in the United States, so the market there is promising. There are 40,000 renal cancer, 200,000 breast cancer and 2.5 million arrhythmic cardiac cases reported each year in the United States.

Boston-based Galil has 60 employees in Israel and the United States. Most of the company’s activity in the United States is marketing and fund raising. Amir said sales in the United States are handled directly.

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Jason Harris

Jason Harris

Executive Director

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