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Life Sciences generate booming Israeli industry

by Penny Schwartz

May 17, 2007 | 8:00 pm

Israel's life-sciences field is growing so rapidly that even industry trackers are having a tough time keeping up with the number of startups.

Of the approximately 750 Israeli companies in the field, nearly three-quarters were founded in the past 10 years, said Yael Rogel-Fuchs, executive director of Israel Life Sciences Industry (ILSI). The nonprofit organization was formed about three years ago to promote the country's emerging biotechnology field.

Rogel-Fuchs added that nearly half of the companies were established in the past five years, and 60 companies have been created in the past year or two. There may be more, she said, because companies register daily on the industry's tracking database.

In Israel they call the field "bio med," said Raphael Hofstein, president and CEO of Hadasit Ltd., a subsidiary of the Hadassah Medical Organization in Jerusalem that takes the organization's technologies to market. "Bio med is, in our minds, a new trademark which represents the strength of Israel as being a place for the convergence of biotechnology and the medical device arena."

Hofstein and Rogel-Fuchs spoke about Israel's place in the life-sciences industry at the 2007 BIO International Convention, the world's largest biotechnology gathering and exhibition, which was held May 6-9 at the Boston Convention Center. Representatives from 16 Israeli life-science companies and industry groups were among the 1,800 exhibitors. More than 20,000 people attended the event.

Hofstein attributed the tremendous growth of the field in Israel to several factors. Among them are extensive academic research in life sciences, significant government support of early stage research and Israeli entrepreneurs who want to create marketable products.

He points to the huge number of patents developed in Israel. The Jewish state is No. 7 in the world in terms of patents, according to ILSI. In medical devices, which account for 53 percent of the life-sciences industry, according to figures published by ILSI, Israel is No. 1 per capita.

"We have coined a notion that there is a mountain of intellectual property coming out of Israel," Hofstein said.

In 2005, an estimated 25,000 people were employed in the life-sciences field, led by the pharmaceutical sector.

In a competitive industry that makes great promises of medical cures and treatments but is known for losing money, more than one-third of Israel's life-sciences companies are producing revenue, according to ILSI. About a third of the remaining firms are at the seed stage.

One notable success story is the multiple-sclerosis drug developed by professors Ruth Arnon and Michael Sela of the Weizmann Institute and brought to market by Teva under the trademark name, Copaxone.

Copaxone sales in 2006 reached $1.4 billion, according to an article by Arnon, former vice president of the Weizmann Institute. Sales are expected to total $46.1 billion for 2002-2007.
Eli Opper, chief scientist for Israel's Ministry of Industry, Trade and Labor, said that the amount of capital needed for even one drug is enormous, and it takes a long period to bring a product to market.

"The combination of these two factors is a real hurdle," Opper said.

Opper, who moderated Israel's panel presentation at the Boston convention, said a small country like Israel must connect with large international companies to finance its emerging life-science companies. New financing tools are needed, he said.

Hofstein suggested that an example could be a Hadasit Ltd. subsidiary called Hadasit Bio-Holdings, nine companies that spun off from Hadasit in December 2005 and now trade on the Tel Aviv Stock Exchange.

Hofstein said Boston was a prelude to Israel's life-sciences landmark convention, Bio Med 2007, scheduled for June in Haifa. The convention, co-chaired by Hofstein and Arnon, will run in conjunction with an annual gathering on stem-cell research.

The convention is expected to attract 5,000 people to the exhibit hall and lectures, with representatives from companies in Asia, India and Europe.

Israel's contributions to the field are recognized around the world, Hofstein said.
At the end of April, the Michael J. Fox Foundation for Parkinson's Disease singled out two Israeli companies, ProNeuron Biotechnologies and Cell Cure Neurosciences, for grants totaling just above $1 million to spur research aimed at new treatments for Parkinson's Disease patients.

Cell Cure, which is partially owned by a Hadasit subsidiary, is using embryonic stem cells to develop a treatment to replace damaged Parkinson's cells, Hofstein said.

The issue of embryonic stem-cell research, so controversial in the United States, poses no such problem in Israel, said Nadav Tamir, Israel's consul general to New England. In published reports following the announcement of the grants, Benjamin Reubinoff, Cell Cure's chief scientist, said the Knesset has authorized embryonic stem-cell research.

"The Jewish religion and Orthodox rabbis support human embryonic stem-cell research," Reubinoff is quoted as saying in Financial Times Information. "Their priority is to save a human life."


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