Ilex and Starget: When the Innovation Layer Stops Being an Option and Starts Becoming a Business
By January 2026, Ilex had already put about NIS 60.8 million into Starget and added separate cash commitments to innovation platforms with Sheba and Ichilov. That makes the innovation layer materially real in capital allocation and accounting, even if Starget itself is still in the proof stage rather than the business stage.
Why The Innovation Layer Needs To Be Isolated
The main Ilex article focused on the operating core. This follow-up isolates something else: capital allocation into innovation. The reason is straightforward. By late 2025 and early 2026 this was no longer background noise. By January 2026 Ilex had put about NIS 60.8 million into Starget, transferred $5 million to the Sheba accelerator, and deposited $2.5 million into the Ichilov angels platform. Another $7.5 million of commitments was still sitting in the 2026 pipeline across those two innovation platforms.
That is no longer a distant option story. It is a layer that changes real cash uses, enters the reported numbers, and starts to define what Ilex is trying to build next to its distribution and medical-equipment businesses.
The important point is that the move was not made from a stressed balance-sheet position. In 2025 the group generated NIS 72.9 million of operating cash flow, ended the year with NIS 175.6 million of cash and cash equivalents, showed no bank debt on the consolidated balance sheet, and said in the financing section that it did not expect to need material additional funding for ongoing operations. So the bottleneck here is not the ability to write the check. The bottleneck is what that check is really buying, and when the innovation layer starts to look like a business with economic logic rather than a well-funded basket of bets.
| Platform | Capital already deployed | Capital still committed to 2026 | Status at the report date |
|---|---|---|---|
| Starget | $7 million between August 2025 and January 2026, plus NIS 31.6 million invested in 2021 and 2022 | No additional Ilex commitment is specified in the selected filings | The SAFE converted into equity, and Ilex's stake rose to 39.64%, or 32.75% fully diluted |
| Sheba accelerator | $5 million paid in January 2025 | Another $5 million is expected during 2026 | The annual report says the accelerator reviewed more than 100 startups and invested in seven |
| Ichilov angels platform | $2.5 million deposited into a designated account in the third quarter of 2025 | Another $2.5 million is expected in the second half of 2026 | As of the report date, no investment had yet been made through the platform |
Starget Has Already Crossed The Option Line
The sharpest point in the filings is that Starget no longer sits inside Ilex as a small venture side position. The original investment made in 2021 and 2022 totaled NIS 31.6 million. In July 2024 Ilex exercised its preemptive right and participated in a SAFE. By December 31, 2025, cumulative SAFE investment had reached NIS 19.7 million. In January 2026 the company added another $3 million, about NIS 9.5 million, in an $18.2 million Series A round, and the entire SAFE converted into shares at that point.
The significance is not only the size of the checks, but also the change in form. At year-end 2025 Ilex still held 34.28% of Starget, while the SAFE sat separately as a financial asset at fair value through profit and loss. After the January 2026 round and the conversion, that option-like layer became part of a much larger equity ownership story, and Ilex's stake rose to 39.64% of the share capital, or 32.75% fully diluted. In practical terms, Ilex is no longer sitting next to the table waiting for the next round. It is already inside the cap table as a meaningful owner.
The February 16, 2026 filing also shows that the move now goes beyond valuation. The initial closing included a $5 million investment from Louisiana Economic Development and BRF, and at the same time a cooperation agreement with CMIT in Louisiana came into effect for research and development services around Starget's molecules. That is an important signal. Starget did not only raise money. It also built a U.S. operating foothold. Still, this is development infrastructure, not commercialization proof.
What Already Shows Up In The Financials, And What Still Is Not A Business
The right way to read 2025 is to see that the innovation layer already moved into Ilex's reported numbers before it had a proven business outcome. The board report says explicitly that other income, net, was affected mainly by the revaluation of the Starget SAFE at year-end 2025. In other words, before sales, before commercialization, and before a completed clinical program, this layer was already touching the reported earnings line.
At the same time, the same layer weighed on another line. The group's share in losses of equity-accounted companies rose to NIS 10.6 million in 2025 from NIS 7.2 million in 2024, and the company links that increase mainly to higher Starget spending ahead of clinical trials.
That is not a contradiction. It is exactly the stage where an option stops being marginal but still does not become a business. On one side there is revaluation, rising ownership, an outside financing round and a U.S. research platform. On the other side there is continuing cash burn and continuing losses passing through the equity-accounted line.
| Layer | What actually happened | Why it matters |
|---|---|---|
| Cash | 2025 investing cash outflow was NIS 46.6 million, and most of it came from Embark, the Starget SAFE and the Ichilov deposit | Capital allocation is already material, not a side note |
| Profit and loss | Other income, net, was affected mainly by the year-end revaluation of the Starget SAFE | Part of the innovation-layer contribution in 2025 was accounting-based rather than operating |
| Equity method | The group's share in associate losses rose to NIS 10.6 million, mainly because of Starget | Development costs are already flowing through Ilex's numbers |
| Ownership | The stake rose from 34.28% at year-end 2025 to 39.64% at the report date | Starget is turning from an investment into a strategic holding layer |
What Is Still Missing Before The Innovation Layer Becomes A Business
The good news is that there is now a real proof path, not only a presentation deck. In December 2025 Starget received approval for a first-in-human trial in Australia, subject to completing conditions that include hospital approval, patient recruitment and additional technical items. The trial is expected to include 12 patients and run for about 12 months. At the same time, the company is working to obtain approvals needed to start another clinical trial for a different product in the United States during the first half of 2026.
But none of that fully answers the economic question. Based on the summarized information for Starget, at the end of 2025 it had only NIS 8.5 million of current assets against NIS 42.1 million of current liabilities. Even after the initial closing, the investment documents still left room for up to another $1.8 million to be raised by April 16, 2026 in order to complete the final closing. So the financing picture improved, Ilex's ownership increased, and the clinical and research infrastructure became broader. But Starget still reads like a funded development platform rather than an activity that already stands on its own business legs.
That leads directly to the answer in the headline. For Ilex, the innovation layer has already stopped being an option in capital-allocation and accounting terms. It is too large, too expensive and too visible in the numbers to remain peripheral. For Starget itself, this is still not a business in the classical sense. It is a development engine entering a proof year.
The implication for 2026 is sharp. Ilex has already proven that it is willing to allocate capital. Now Starget has to prove that the financing round, the Louisiana partnership and the move into clinical trials create a progress path that can be analyzed like an asset, not only like a more sophisticated option.
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