In Israel, life science companies doubled their share of the total $2 billion investment
pie last year according to the survey conducted by the IVC Research Center.
In 2001, life science companies accounted for 16 percent of the total capital raised,
doubling its share over the previous year. Within the sector, 103 companies raised $310
million, compared with 75 firms that raised $238 million in 2000.
American biotechnology companies raised $37.2 billion in 2000 through public and
private financing. The vast number and high quality of technologies and innovations in
the biotech R&D pipeline, promise big rewards to the right bidders.
Prof. Michel Revel of the Department of Molecular Genetics, Weizmann Institute of
Science and Chairman of Israel's National Committee for Biotechnology summarized the
state of the industry as follows:
From three or four young Biotech companies in 1980, Israel has seen growth to 160
industrial enterprises active in the various sectors of therapeutic pharmaceuticals,
diagnostics, bio-informatics and agro-bio including plant and farm animal products. The
biotech work force grew from 400 in 1988 to 4,000 today. Sales of products developed by
the Israeli biotech sector, which were $15 million in 1988, reached to more than $1.0
billion in 2001, about 80% being exports. The share of Israel is about 2.5% of the total
world biotechnology sales. Biotechnology contributes significantly to the growth of the
Israeli medical industry, including medical equipment and electronics as well as generic
drugs, whose exports were $1.1 billion in 1998, over 5% of total Israeli exports.
Therapeutic pharmaceuticals amount to 67% of the Israeli biotech product sales.
InterPharm developed and manufactures recombinant Interferon-beta (Rebif) and other
cytokines by a proprietary technology expressing human genes in mammalian cell
cultures. InterPharm is a subsidiary of Ares-Serono which registered and markets Rebif
for treatment of Multiple Sclerosis in 40 countries. Another drug for Multiple Sclerosis,
Copaxone, is produced in Israel and sold by Teva in the USA and worldwide. Last year
global sale of Copaxone reached $350 million. Biotechnology General sells
recombinant Growth-Hormone, a Hepatitis B vaccine and viscoelastics for joints and
eye applications. Pharmos licensed new opthalmic drugs and develops medication for
strokes and head traumas. Many other products are under development including drug
delivery systems such as by D-Pharm and Omri, human monoclonal antibodies by XTL
Pharmaceuticals, structurally shaped peptides by Peptor, recombinant heparin by
Insight and promising cell therapies for spinal cord traumas by Proneuron. Together
with a number of start-ups, this sector counts 36 companies.
Platform technology companies, especially in Genomic Bio-informatics include
Compugen and QBI, and in computer-aided molecular design, Synergics, Peptor, BTG
and Green Care develop new drug generations.
The world market of therapeutic gene products, many of which will derive from the
human genome project is very high. Erythropoietin, GM-CSF, Interferon total $2 billion
per year; Interferon for Multiple Sclerosis reached $1.2 billion in 1999 with 170,000
patients treated. It would be an admirable goal for Israeli companies to develop yearly
2-3 new such drugs, but the duration and costs of clinical trials has until now been
dependent on incorporation into multinationals.
For diagnostics, development is less financially demanding, but the market is also more
limited. In Israel, diagnostics amount to 4% of biotech sales, mainly from genetic and
immunological assays for viruses and other pathogens. The sector includes Orgenics,
Savyon, Rahan Meristem and Gamida-Gen. But genetic diagnostics promise to become
a major activity.
Agro-bio and veterinary products amount to 23% of sales. The bulk are
genetically-developed hybrid seeds for vegetables, crops, fruits and cotton, with
resistance to pathogens, herbicides and adaptation to unfriendly environments.
Companies in this sector include Hazera, Zeraim Gedera, Rahan Meristem and Vitality.
Poultry and farm animal vaccines produced by Abic, insects to fight plant parasites
produced by BioBee; and new cellulose-based technologies contribute to agro-bio
and environment control. Algae and fish cultures are other examples of the diverse food
and bionutraceutical sector.
In an editorial in the November 1994 of the Israel High-Tech & Investment Report, we
stated, "Israeli biotech industry has come of age." The International Biotechnology
Conference being convened this month in Tel Aviv gives powerful proof to that effect.
A Mix of Science, Technology and Money
Interest in the biotech industry has been revived. Biotechnology has experienced great
growth with its unprecendented advances in the sequencing of the human genome. It
also aroused interest of investors, who are no longer putting all of their money into
high-tech.
Following the successes of its science-based industry in electronics, software and
communications, Israel has a strong potential to take a leading place in the world of
Biotechnology. Israel ranks as a top country for scientific publications per capita and
almost 60% of its scientific publications are in biology and related medical or
agricultural fields. Life sciences represent about 35% of Israel civilian research
activities, mainly in its 7 universities, 5 medical schools and for agricultural research at
the Volcani Institute and the Hebrew University Faculty of Agriculture. In Biotechnology,
strong basic research is a prerequisite for industrial applications, so that both research
and transition to industry are in need of support from government and from university
structures. Examples are R&D commercialization offices such as Yeda at the Weizmann
Institute, Yissum at the Hebrew University and Ramot at Tel Aviv University. Many
scientists from Academic Institutions have taken positions in biotech industries.