Biotechnology in Countries Beginning with “I” – Part 8

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.

Susan FinstonIn the run-up to the 2015 Biotechnology Industry Organization Convention (BIO2015), I am reflecting on the exponential growth of Israel’s innovative life sciences sector over the last five years, and the cardinal importance of an enabling policy environment for investment in commercial biotechnology.

As background, past installments in this series here and here, focused on key policy elements for Israel including strengthened IP protection, effective technology transfer, and access to capital.

In 2010 I attended the first U.S.-Israel Biotechnology Business Roundtable in Chicago on the margins of BIO2010, led on the Israeli side by Dr. Eli Opper, then-Chief Scientist of the Ministry of Economy (formerly Minsitry of Industry, Trade and Labor). At that time Israel was already heralded as ‘Start-up Nation.’ and Intel and Google already had established global R&D Centers in Israel (joined more recently by Apple).

Five years ago Israel’s high-tech success did not yet extend to biotechnology and very few biopharmaceutical companies had established R&D Centers in the Start-Up Nation. Instead of working with global biopharma at home, Israel’s life science start-ups tended to out-license early stage research for development abroad.

Fast forward to 2015, where the Israel Advanced Technology Industries (IATI) 2015 Report cites the establishment of nearly 20 R&D Centers by major life sciences multinational companies:

fig1

In 2010, Israel was already doing a lot of the right things, yet had not yet delivered on long-promised IP reforms. As described by Dr. Opper, his office “invested heavily in the life sciences industry and that biotechnology in particular is a preferred industry. The Office of the Chief Scientist (OCS) has established specialized incubators for life sciences and most recently is in the process of establishing a dedicated biotechnology fund in alliance with private sector fund managers to assist with the further development of the biotechnology sector in Israel.”

Despite these incentives, then-Chief Scientist Opper expressed frustration at the relatively low level of global biotechnology investment in Israel at that time. In discussion with biopharma industry executives at the BIO2010 US-Israel Dialogue, the issues of IP protection and price controls arose repeatedly as barriers to R&D investment.

2010 was also the year that the Government of Israel began to focus on meaningful IP reforms. Even before the US-Israel Dialogue in May 2010, Israel and the United States reached an understanding on resolution of several longstanding IP issues in February 2010. Israel was finally removed from the “Special 301” Watchlist in 2014 following final passage of patent amendments by the Israeli Knesset.

On the ground, private investment in commercial biotechnology started to take off from there, and Israel’s has achieved unprecedented success as a source of biopharma innovation. This is documented both by the large and growing number of life sciences R&D incubators (above), as well as by the Weizman Institute slide below, citing significant Israeli technology contribution to up to 24% pf major new therapies (slide 14):

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Israel’s exceptional success in commercial life sciences may seem inevitable in hindsight. The facts prove otherwise.

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 in the US and globally. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with peptide drugs in 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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