Exalenz Bioscience, a developer and marketer of unique medical devices for the diagnosis and management of digestive system and liver conditions, has received the US Food and Drug Administration (FDA) clearance for marketing its newly developed BreathID System. The BreathID Hp device for detection of Helicobacter pylori (H. pylori) is an advanced, new-generation of the original BreathID device.

The system was developed over several years and approximately 330 patients have participated in clinical trials in the US and in Israel. US FDA approval was granted several weeks after the company had received CE approval for marketing the system in Europe.

The BreathID device sold in the US has proven high clinical efficacy in applications for detection of H. pylori bacterium.

The new BreathID Hp device is designated in first phase, for the purpose of H.pylori testing, and is designed to serve as a platform for additional applications in the future. The new system will replace the original device, which was developed over a decade ago. Exalenz intends to begin the worldwide marketing and sales of BreathID Hp in July. The new system, which is by far more advanced than existing systems by competition, delivers better performance than any other device marketed worldwide. Thanks to the advanced technologies that were applied in its development, the system offers greater ease-of-use, and a small foot print as well as additional features such as electronic medical record (EMR) ready capability. The cost to manufacture the system will also be significantly less than the previous system. The company expects that the cost reductions will result in higher gross margin in the next quarter.

Exalenz estimates that the high added value offered to physicians and medical centres by the new BreathID Hp device will further improve company sales and will contribute to accelerating sales in the US market and to improving gross margins significantly.

Marketing of the new system in the US will be executed by the new marketing and sales array that is currently established by the Company's new CEO, Larry Cohen, who, prior to this position, had directed sales volumes of billions of US dollars for diagnostic companies. The establishment of the new marketing system and the preparations for the launch of the new system constituted the majority of the Company's activities in the US in the second quarter, during which the Company had ceased to focus on selling previous generation devices based on its expectation of US approval.

Larry Cohen, CEO of Exalenz, said, “We are very proud to receive FDA approval for the BreathID Hp device. This device embodies the proven, high capabilities of the BreathID technology, which was developed by the Company, and is currently sold successfully as an H. pylori testing application in over 200 medical centres in the US."

"We are confident that the new system will assist us to accelerate Exalenz's sales in the US and is likely to become a significant strategic milestone in the Company's business development. The satisfaction among medical centres in the US regarding the use of the BreathID system alongside the new system's improved functional capabilities reassures us that we can increase the demand for this unique solution, and this will constitute a crossroad in the Company's development. The significant change in the gross margin will enable us to proceed towards achieving operating profit in the foreseeable future. The new system demonstrates Exalenz's aspiration and commitment to innovation, creativity and excellence that meet customer's needs."

Exalenz, under the direction of Larry Cohen, is working to establish a marketing      and sales array to allow a greater penetration rate of the systems to the US market. As of the end of the first quarter of 2013, the Company has been supplying approximately 216 medical centres in the US, which purchased the BreathID system.