Innovation Nation: Israel is flexing its biotech musclesJul. 3, 2013
According to the State of Israel’s Ministry of Industry, the number of life-science companies has grown from 186 in 1996 to more than 1,100 in 2012. “That’s enormous compared to the 7 million population of Israel,” emphasizes Yaky Yanay, chief financial officer of Pluristem Therapeutics in Haifa. Medical-device companies make up almost 50 percent of that pool, and Israel is number one worldwide in medical-device patents per capita. It is also a close second to the United States in biopharma patents per capita.
The last 15 years have been an incubation period, as entrepreneurs learned to navigate the life sciences, says Benny Zeevi, a managing general partner at DFJ Tel Aviv Venture Partners and cochair of Israel Advanced Technology Industries (IATI), an umbrella organization for Israeli high-tech and life-science companies. Today, more than 60 companies have products in Phase 2 and 3 trials, he estimates—far more than ever before in Israel’s history. “We are on the edge of a breakthrough decade for the biotech sector in Israel.”
Israel’s biotech roots go back to 1901 with the founding of Teva Pharmaceutical Industries, then a small business that distributed imported medications around Ottoman-controlled Palestine using mule and camel caravans. Today, Teva is Israel’s largest pharmaceutical company and one of the top 10 pharma companies in the world.
Teva’s success has had a profound impact on the country. The company has brought local biotechs under its wing, for example, and groomed local management talent. But because the company remains focused on generics, it is unlikely that Teva executives will change their strategy to “become the next Roche or Pfizer” with a pipeline of novel compounds, says Yaacov Michlin, president and CEO of Yissum, the technology-transfer company of Hebrew University. Instead, he says, the key to success for biotech in Israel is starting a small company, then catching the attention of Big Pharma.
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