According to a recent 13G form filed with the Securities and Exchange Commission, Richard Mashaal‘s RIMA Senvest Management has disclosed an investment of about 64.96 million shares in the Israel-based healthcare company Medigus Ltd. (NASDAQ:MDGS). The holding amasses about 19.04% of the company’s outstanding shares and includes 20.63 million ordinary shares that are issuable upon exercise of warrants.
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The New York-based fund RIMA Senvest primarily invests in small-cap and mid-cap companies that have strong growth prospects, and often utilizes a contrarian approach while selecting these firms. As we will find out in this article, Medigus Ltd. (NASDAQ:MDGS) neatly fits this growth bill. The healthcare sector represented about 15% of the fund’s public equity portfolio’s market value, according to its latest 13F filing.
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Medigus Ltd. (NASDAQ:MDGS) recently completed its public offering in Israel of 70,250 units, for total proceeds of approximately NIS 26.8 million ($7.1 million), according to a Form 6-K filed with the SEC. Each unit comprised of 1,000 ordinary shares and 500 new Series 9 warrants, which trade on the Tel Aviv Stock Exchange (TLV) and are exercisable into one ordinary share at an exercisable price of NIS 0.532 ($0.14) until July 8, 2018.
Medigus Ltd. (NASDAQ:MDGS) is a medical device company engaged in the development of minimally invasive endosurgical tools, and is also a leader in direct visualization technologies. The company’s leading product is a unique proprietary endoscopic device, MUSE system (Medigus Ultrasonic Surgical Endostapler), which is used in the treatment of gastroesophageal reflux disease (GERD), a disease that affects between 10 to 20 million people in the U.S. according to The Society of Thoracic Surgeons.
Moreover, Medigus Ltd. (NASDAQ:MDGS) is aiming to get approval from the China Food and Drug Association (CFDA) for the distribution of MUSE which could prove to be a strong catalyst for the company in the future. With regards to the approval, it was recently announced that Golden Grand (Shanghai Golden Grand -Medical Instruments Ltd.) made an advance payment of $350,000 to Medigus as an initial deposit for the purchase of MUSE systems. Golden Grand is infact sub-contracted by Sinopharm (China National Pharmaceutical Group Corporation), which owns distribution rights for MUSE system in China, subject to the CFDA approval of course. Sinopharm will purchase at least $17.6 million worth of MUSE system and related equipment from Medigus during the four years following the CFDA giving the green light (if it does so).
Although down by over 21% over the last 12 months, Medigus’ stock has risen by more than 45% so far this year on the TLV. The healthcare sector has been one of the strongest performers lately, with year-to-date returns of about 15% and a rise of nearly 30% over the last year. Hedge funds with a strong focus on this sector like James E. Flynn‘s Deerfield Management and Kevin Kotler‘s Broadfin Capital are some of the firms, among those that we track, which have benefited from this hike.
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