ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the March 2002 issue


Clal Biotechnology Industries Aims at Big Profits


Clal Biotechnology Industries Ltd. (CBI) has a strong management team with a defined and disciplined approach to investing. "We look for companies that have minimally completed animal tests and are about to begin human tests," asserts Dr. David Haselkorn, CEO of Clal Biotechnology Industries Ltd. The general direction taken by CBI is towards immunology, with a war chest of $100 million the company's yield or its return-on-investment will very much depend on approvals to be won for the products which are now in the pipeline.

CBI is invested in one of Israel's most prominent biotechnology companies, D-Pharm. It has a substantial investmen in that company. Another sizeable holding is in Compugen. That company has generated sales but its long-term profitability is far from assured. CBI's management goes to great lengths to explain that it differs from conventional venture capital companies. When the management decides to move ahead, it typically invests between $5-$10 million. Of late, it has shown a readiness to invest in companies outside of Israel, a cross-border approach that is intended to develop an international portfolio.

However, the proliferation of biotechnology venture capital funds in the 1990s, also helped to boost the sector in Israel. Foreign venture capital having already spotted the value of Israel's high-technology industry, was the first to discover the potential riches of Israeli biotechnology. Israeli-based biotechnology funds (most of whose investors are, nevertheless, foreign) have grown in size and number and there are now about 20 such funds active in Israel, individually valued between $20 million and $100 million. Israeli companies have been successful at generating funds through public offerings, especially on European stock markets. There are now seven Israeli biotechnology companies listed on foreign stock exchanges.

About Clal Biotechnology Industries
Clal Biotechnology Industries Ltd. (CBI) is wholly owned by Clal Industries and Investments Ltd. Currently, it has under its management $140 million. Its investment activities are totally focused on life sciences and reflect the experience and capabilities of its management team.

Dr. David Haselkorn, CEO, for ll years beginning in 1987, headed the activities of Biotechnology General Corporation. BTG is dedicated to producing genetically-engineered drugs and during his management tenure BTG developed into one of the world's first profitable biotechnology companies.

In the late 1970s Dr. Haselkorn, after earning a doctorate in Chemical Immunology from the Weizmann Institute of Science, headed a major R & D arm of the Israeli Defence Forces. His group was awarded the prestigious Israel Defense Prize.

CBI's initial investments targeted Israeli entities. In recent years CBI expanded its investment focus to include companies outside of Israel's borders, has investing over $ 25 m. in French and US-based companies,

CBI's strategy appears on the surface as very conservative, however it is highly aggressive:
*Becoming a major shareholder in portfolio companies with technological platforms and innovative products having a large potential market and clinical proof of feasibility.
*Co-operating with strategic partners, capitalising on a wider scope of resources at all stages of the portfolio company's life.
*Investing in biopharmaceutical companies demonstrating cutting-edge technologies and clinical proof of concept.
*Investing heavily ( average $10m per investment) in a few select companies, thus overseeing a relatively small portfolio (10-12 companies max.)
*Management with an intrinsic understanding of the technology and science exercises a hands-on strategy
*Focusing on a long term perspective.
*Enjoys backing of the Clal group, in which life science investment constitutes a core investment area.

CBI manages a proprietary database with more than 250 investments that have been screened, out of which 10 investments have been executed.

Reprinted from the Israel High-Tech & Investment Report March 2002

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