Posted on September 21st, 2016
by Yaky Yanay
While the Israeli high-tech industry is celebrated the world over, the biotech sector is finally stepping out of its big brother’s shadow and enjoying a significant success of its own. There are over 1,000 life science companies in Israel. They are developing and producing innovative products such as the Pill Cam and the ReWalk walking assistance system, which are just two examples of how Israeli biotechnology is changing the world. But in order to understand the industry, it is necessary to look at the major factors contributing to its success.
Much like high-tech, the biotech industry requires highly skilled people to innovate. The number of trained scientists and engineers is considered critical to the growth of these industries. Israel has more scientists and engineers per capita than any other country in the world, with 140 per 10,000 population as compared to the 83 per 10,000 in the U.S., the next on the list. Israel also has one of the world’s highest per capita ratios of scientists in life sciences, with one out of every three Israeli scientists specialized in life sciences. These numbers translate into real innovation. Israel is one of the world leaders in biopharma patents and medical patents per capita. While innovation is key, more is needed to grow an industry: entrepreneurs, capital and government support.
The entrepreneurial spirit in Israel has been touted in innumerable talks, publications and blogs. But in addition to innovation and entrepreneurship, capital is critical for translating an idea into a viable commercial enterprise. And this capital is making its way into the life sciences. In the past several years we are witnessing steadily increasing amounts being raised privately and publicly by life science companies. While early-stage companies require angel or venture capital funding, some companies are maturing into public companies in a more advanced stage of development, and are attracting substantial interest from foreign investors, obtaining primary or dual listings on the Nasdaq stock market. As an example, Pluristem Therapeutics, a cell therapy company based in Haifa, is listed on the Nasdaq and Tel Aviv exchanges, has successfully raised $150 million via a series of offerings, and plans to initiate late-stage clinical trials. As the President &COO of the company I can appreciate all it took to get from the invention of the core technology at two of Israel’s top academic centers, to a well-funded, publicly traded company moving its products towards commercialization.
Israel also has important government and organizational support for the industry. The Israel Advanced Technology Industries is the largest Israeli organization dedicated to advancing the high-tech and life science industries. It has several goals, one of which is supporting government activity and advocating for public policy that encourages innovation, job creation and long-term investment in startup companies. It supports and advocates for these industries in conjunction with strong government efforts. The National Authority for Innovation, formerly the Office of the Chief Scientist of the Ministry of the Economy, invests $400 million annually in grants, incubators and other programs. These funds play a significant role in the development of early-stage companies, but also supports activities at later stages of development such as large clinical trials that target regulatory approval and commercialization. The National Authority for Innovation is committed growing the sector, and allocates between 25-30 percent of its yearly budget to the sector. The life sciences industry also enjoys tax benefits and grants for export-oriented industries and R&D centers, and benefits from science and education programs that nurture and sustain excellence in science and reverse the emigration of educated life science professionals.
As of 2014, more than 50% of Israel’s exports derive from the high-tech and life science industries, and the life sciences industry is playing a meaningful part in this. With the expected increase in investments in Israeli life science companies, from Israeli institutional and overseas investors, we can anticipate an increase in the number of companies. We can also expect the development of more mature ones, with products approaching or achieving commercialization. More companies will aim to bring products into the market, rather than exit in earlier stages. These developments should all contribute to the growth and prosperity of the Israeli economy.
Academic excellence, innovation, entrepreneurship, inflow of capital and strong government support are coming together to generate a booming life sciences industry in Israel, much as they have done for the high-tech sector. Investors and entrepreneurs can look forward to the continued success and growth of the sector, and, most importantly, patients can anticipate better outcomes as this Israeli industry expands and matures.
Originally published at http://www.jpost.com/Business-and-Innovation/Tech/Biotech-Nation-467707.
Forward Looking Statements
This blog contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and federal securities laws. For example, we are using forward-looking statements when we discuss the expected timing for enrollment for the Phase I trial, when we discuss the planned trial design and its endpoints, when we discuss the potential of positive clinical data to support further development of PLX-R18 to increase the success rates of transplants, and when we discuss the potential of PLX-R18 to treat a broad range of hematologic indications. These forward-looking statements and their implications are based on the current expectations of the management of Pluristem only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in technology and market requirements; we may encounter delays or obstacles in launching and/or successfully completing our clinical trials; our products may not be approved by regulatory agencies, our technology may not be validated as we progress further and our methods may not be accepted by the scientific community; we may be unable to retain or attract key employees whose knowledge is essential to the development of our products; unforeseen scientific difficulties may develop with our process; our products may wind up being more expensive than we anticipate; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; our patents may not be sufficient; our products may harm recipients; changes in legislation; inability to timely develop and introduce new technologies, products and applications; loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of Pluristem to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, Pluristem undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risks and uncertainties affecting Pluristem, reference is made to Pluristem's reports filed from time to time with the Securities and Exchange Commission.