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Biotech in Countries Starting with ‘I’ – Part 5

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

My thoughts have been returning to biotechnology in Israel and how it has benefited from the state’s exceptional technology linkages.

Just ten years ago, innovative life sciences was the lagging indicator in the country’s long-running technology boom.  Bio-pharmaceutical companies in particular expressed concerns about Israel’s commitment to provide effective data exclusivity – protection for commercially valuable dossiers submitted to regulators as a condition for gaining marketing approval – and other lacunae in the outdated patent law.  In the early 2000’s, FDI in innovative bio-pharma R&D stagnated, and Israel lost luster as a clinical research destination.

Much has happened on the IP front in the last 5 years:  In 2009, the World Intellectual Property Organization (WIPO) appointed the Israeli Patent Office as an International Searching and Preliminary Authority under the PCT, in recognition of Israel’s technology prowess.  Under pressure abroad and at home, Israel initiated substantial reforms for harmonization its IP regime with international norms. This year Israel seeks to complete the legislative process this year for pending bills to address remaining key concerns relating to patent term extension.

All the while, Israel has excelled at IP management from a technology transfer perspective.  Effective technology transfer pre-dates Israeli independence, and has been carried forward by the Weizman Institute, Technion and other technology powerhouses across the country. (I wrote more about the foundational nature of tech transfer for Israel for the Biotechblog last February, here.)

Technology linkages supporting Israel’s biotech boom are captured in the 2013 US-Israel Innovation Index, released last week here in Washington DC.  The 2013 Index measures how Israel stacks up against a range of comparator countries, including Switzerland, Canada, Singapore, Germany, Sweden, South Korea, Finland, Japan, Turkey, Brazil and Russia, in descending rank.   Indicators include government support for innovation, the level of intensity of private sectors / industry activity, human capital and overall R&D.  Despite its small size – both geographically and in population – Israel ranks with Canada and is outpaced only by Switzerland.   Data sources and an annex with the data itself are available online.

Although it is not addressed directly in the 2013 Index, access to capital is another interesting factor that sets Israel apart from the rest of the Middle East / North Africa (MENA) region.  As measured by the OECD, Israel provides perhaps the most vibrant pool of VC funding outside the United States.   Moreover, Israeli VCs continue to place funds in early stage companies.

Israel’s biotech boom began with medical devices, where Israeli innovators were able to leverage IT technologies for novel Health Information Technologies (HIT).

Overall, the number of life-science companies has grown from 186 in 1996 to more than 1,100 in 2012, in a state with a population of only 7 million people. 

Most biotech funding still goes into medical devices, where the risk and development time is more favorable as compared to pure bio-pharma. Still, an increasing number of Israel’s most exciting biotechnology companies focus purely on novel therapies targeting unmet medical needs. I have met some of these pioneers and they are impressive. Their success or failure may determine the future path of biotechnology in Israel.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit finstonconsulting.com.

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