The hot BioMed scene
Today, years after the first Israeli BioMed start-ups were established, you can definitely say that it’s time for their most important stage: maturing and moving to the ‘big boys’ play ground
What you need to know
According to an international survey in the global innovation field that was published in the opening of the world financial forum in Davos, Israel rose to 7th place in the grading of global innovation. According to the poll, 92% of the Israeli executives give priority in their business strategy to innovation and 70% grade innovation. The survey, “the barometer of innovation”, that is held three years in a row, examined the business innovation in the volatile global economy and found worrying signs among business leaders in the world who continue giving innovation a strategic priority – but are afraid regarding their ability to maintain the competitive advantage in an ever-changing and dynamic environment, globally-based and with less available resources. One of the fields that seem to be on a nonstop rise is the BioMed (bio-technology and medical equipment) sector.
According to research made for the Ministry of Economy by the Deloitte’s advisement group Brightman, Almagor Zohar, the Government of Israel promotes international marketing in different ways, based on the understanding of the big contributions to the growth and immunity of the Israeli market. They point out that the services market has a growth potential in the next few years, and among it Israel has a competitive advantage in the fields of research and development, hi-tech and biomed, clinical trials, telemedicine and pharmaceutical services.
“Over the years the Israeli Hi-Tech market gain a high-reputation”, says the poll, “What brought to the opening of research and development centers of international companies in Israel and this is also one of the reasons that the chance in successfully buy of Israeli companies by International one is high significantly”.
Several factors bring researches from other countries to conduct their research in Israel: The Israeli health system is one of the most modern and efficient in the world, the doctors and researchers are highly professional, and the percentage of diseases and disorders studied by clinical researches is the highest compared to other countries. The Israeli doctors and medical teams have full knowledge of English and most of them are highly proficient with computers– and that’s in opposition to other countries that compete with Israel. The fact that in Israel 96% of population has health insurance allows easy follow-up. In addition, in the Israeli HMOs all the information is fully computerized, in opposition to the countries that compete with Israel in this field. Moreover, the Israeli population is ethnically diverse and that helps the research credibility. In Israel there are large spans of the population with specific genetic disorders, allowing research in a large amount of patients with experimental and orphan drugs.
Regarding pharmacy research and development, the polls’ writers say that a typical drug development cycle takes 12-15 years in average, and costs about billion dollars when only 0.1% of all drugs ever reach the market. In recent years we can see a trend by the big pharmaceutics companies to conduct research in countries that have large selling activities or identified as such.
In Israel there is a great foundation of researchers and scientists, as well as companies like Teva and Interpharm that are a high quality hothouse to researches in the generics field, out of the Israeli professionals that studied abroad in leading centers around the world, and now there are dozens of Israelis with advanced abilities that wish to return to Israel and integrate into the local industry. Academia-wise, Israel is in the top ten in the world when it comes to the quality and quantity of academic publications per capita in chemistry and biology, and there is a healthy connection between academia and industry. There are many other advantages that rise from the fact that research in Israel is relatively lower in scope and cost than in western Europe and USA, and that in Israel you have a lot of innovation in constant development.
Big pharmaceutical companies come to Israel to find the best development trends in biotechnology and medical equipment since Israel is probably the best place to find such companies. The head of the big intellectual property firm, Luzzatto & Luzzatto, Dr. Kfir Luzzatto, sees in this phenomena “outsourcing of the big companies’ development resources”, that according to him has become a dominant trend in past five years, that in the USA alone is estimated at 12 million dollars. Luzzatto explains that the growing interest in Israeli developments comes from the fact that companies are looking for sophisticated biotechnical developments. As opposed to more traditional products, the biotechnological products are harder to imitate, and even if they are more expensive to develop, they present an opportunity for more income gain.
“The world of biomed and biotech is constantly growing”, says Hagit Lerner, head of biotech in Ethosia, human resources. “Dozens of new companies are created every day and recruit people, in an ongoing trend”. It has evidence in numbers: the incredible facts are that today you have hundreds of active and thriving biomed companies in Israel alone. The numbers talk about 700-900 companies, and most of them started in the past five years.
“You can see progress in the field in the demand for employees”, says Lerner. “The positions most wanted in 2013 were doctors, heads of clinical trials and quality and regulation. In all those positions we lack enough quality people even today. More than mere lack, that indicates growth and fast development of many companies, the spiking demand for heads of clinical trials shows the maturation of those companies. The clinical trial is one of the last stages before marketing a product and the estimation is that most of these companies are in that ‘moment of truth’ stage where they become commercial and profitable”.
And once again, one of the areas that we, in Donitza, can help in: recruiting and maintaining quality personnel.
Ruti Alon, senior partner in Pitango and Dr. Benny Ze’ev, co-manager of DFJ, who accompanied the Israeli life sciences industry for many years, say that the years between 2000 to 2010 were an “incubation of the industry” stage – you talk about a young industry but in the next decade, they estimate, we will see more companies reaching that maturity, to advanced development, to clinical trials, to agreements with international companies, or we’ll meet them as objects about to be bought by international companies.
“Israelis are doing things differently and in a different way”, says Dr. Ze’evi. “We have a big advantage in the way we take an idea and develop it. The Israeli knack for innovation, that many around the world appreciate, you can see not only in the development of new equipment and new drugs, but also in the different approach, in the way that the patient receives his treatment where and when he wants. Israel can have a big advantage as a country who is involved in the IT world”. The two agree that the biggest disadvantage of Israel is precisely its advantage: the size of the local market, or more precisely the lack of size. Each Israeli company is by nature a global company or else it can’t grow beyond the limited local scope”.
The medical equipment industry is considered a high potential area for growth. The area got a meaningful push in the mid 2000’s first decade and now it seems to stable, losing the excess weight and maturing. The medical equipment industry is a classic combination between high technology: planning, developing and manufacturing health systems, devices and technological appliances that assist the medical teams and allow them to achieve maximum precision in testing and even relieving the clients’ experience.
In the medical equipment industry we’re talking about technological development dedicated to favor the Health system. The medical equipment industry has become more sophisticated, advanced, and complicated than ever. In Israel alone, according to estimations, there are several hundred such companies, specializing in medical devices – most of them start-ups. As the world market goes, it’s a 200 billion dollar industry.
Today, years after the first Israeli start-ups were established, you can definitely say that it’s time for their most important stage: maturing and moving to the ‘big boy’ play ground; Crossing the line from a company that is still in the developing stages to a stable large company that is capable of manufacturing economical stability and offers a wide horizon of activities. Team Donitza, with its wide and rich experience in media escort of medical device companies, and who has attended the BioMed conference since its first day in Israel, can help all the companies in the field – large and small – and to convey the news to the daily, local, international and professional media and to see an on-going exposure in the right places.