SmartPill Makes Move to Israel Following Acquisition

SmartPill Corp., the medical device manufacturer that was recently acquired by Given Imaging in a $6 million deal, is moving its manufacturing operations from Buffalo, N.Y., to Yokneam, Israel where Given Imaging is based. The move will be complete by the end of this year, company officials report.

The move will lose Buffalo 13 jobs in SmartPill’s production and office operations, but the top-level executives will keep their jobs under Given Imaging.

“After a transition period, we will move SmartPill manufacturing operation to our existing manufacturing facility in Israel,” said Shimon Vinter, Given Imaging’s global director of purchasing and logistics, in a letter to suppliers.

SmartPill, which develops and manufactures ingestible, capsule-based medical devices that aid in the diagnosis, definition and therapeutic intervention of gastrointestinal disorders and diseases, was the first medical company to establish itself on the Buffalo Niagara Medical Campus in 2009. Its departure will be a minor setback for the area’s efforts to create a robust life sciences research and medical device manufacturing hub.

SmartPill has in recent years been struggling to raise investment capital, which is the main cause driving the move. Sources who wish to remain anonymous told The Buffalo News that the company essentially became insolvent at the end of July this year. The cash from Given Imaging was enough to pay off SmartPill’s creditors, perhaps with enough left over to pay preferred stockholders, the sources reported.

Given Imaging makes an ingestible mini-camera that can be used to diagnose digestive ailments, especially in the colon, by taking images of the gastrointestinal tract as it moves through the body.

Given Imaging had $179 million in sales last year, including nearly $2 million in revenues from its PillCam Colon capsule. Company officials said that they expect SmartPill to generate revenues in the “low single-digit” millions next year.