Medical Device Firm Contific Faces Bankruptcy, Seeks Buyer

The Haifa District Court has appointed attorney Mor Nardia as temporary receiver for Contific Medical, a medical device company that owes approximately 181 million shekels (about $49 million USD). The company, founded in 2014, has raised about $55 million since its inception. Nardia has 30 days to facilitate the sale of the company as a going concern or find an international investor.

The appointment was made with the consent of Contific and its secured lenders, who have agreed to provide interim financing for minimal operations to preserve patents, inventory, and the ability to transfer operations to a buyer. Orders freezing proceedings and prohibiting asset transactions remain in effect.

Contific, led by Chairman and CEO Dr. Ilan Ziv, developed ProVate, a disposable device for treating pelvic organ prolapse in women. The product received marketing approval from the U.S. Food and Drug Administration (FDA) and CE marking in Europe. Despite holding around 40 patents and passing development and regulatory stages, the company struggled with commercialization.

In 2023, Contific expanded its agreement with U.S. company Indegene for marketing and distribution support and received a $40 million loan from a lender group. However, Indegene unilaterally canceled the agreement in 2024, creating a $26 million budget shortfall for Contific and hindering its ability to meet loan covenants. The company's debt to secured lenders reached approximately $58 million, with additional debts of 6.6 million shekels to suppliers and 1.1 million shekels to employees.

Despite the financial crisis, Contific possesses assets including inventory valued at $1.25 million in the U.S. and Mexico, regulatory approvals, and numerous patents. The interim financing is partly needed to maintain the validity of a European patent. The receiver's task is to find a buyer in the women's health sector or an investor within the month to transition the product to the commercial stage, as delays could lead to loss of employees, production disruptions, and increased costs to preserve intellectual property.