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Biotechnology Incubators in Israel

Biotechnology Incubators in Israel. The Israeli Biotechnology Market. 160 companies (30% in therapeutics) 4000 employees Market valuation: $3.5 billion Market capitalization: $2.7 billion Av. Annual growth in no. of companies: 14% Sales: $600 million

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Biotechnology Incubators in Israel

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  1. Biotechnology Incubators in Israel

  2. The Israeli Biotechnology Market • 160 companies (30% in therapeutics) • 4000 employees • Market valuation: $3.5 billion • Market capitalization: $2.7 billion • Av. Annual growth in no. of companies: 14% • Sales: $600 million • 75% of the companies employs less then 20

  3. European Biotechnology Per Country Source: E&Y

  4. The existing incubation system 3 types of bio-incubators in Israel: • Public incubators • Private incubators • Public\Private incubators – public incubators which were partly privatized

  5. The existing system of public incubators: Duration: up to 2 years Funding per project: up to $350,000 Government participation: 85% Ownership: Entrepreneur - 50% Private investors - 20% Incubator - 20% Other staff members - 10% Public Incubators

  6. Public Bio-Incubators • Many public incubators have some biotech firms • 2 public incubators specializing/half specialized in biotechnology: • Biomedical Incubator Rad-Ramot Ltd. • Naiot Technological Center Ltd. Both incubators display relatively high levels of private holdings

  7. Problems with the Public scheme • Percentage of ownership is predetermined • Inflexible terms • Duration of funding limited to 2 years • Budget per project limited to $350,000 • No shared infrastructure (not recognized as an eligible cost of the incubator)

  8. Private Initiatives in Israel • Eager Biogroup Ltd. • Hadasit Medical Research Services and Development Ltd. (Haddasa Hospital) • Clal Biotechnology Industries Ltd. • The Center for Advanced Technologies (Tel Hashomer Hospital)

  9. Eager Biogroup Ltd • Incubator ownership: private investors • Seed funding and mentoring against X% ownership (depends on the level of involvement) • Focus: IP strategy and clustering of related projects

  10. Eager Biogroup Ltd • International collaboration with the Pasteur institute in Paris and the European molecular biology labs in Heidelberg. • Average initial investment of $200,000 • Present status: 7 incubator companies

  11. Hadasit Medical Research Services and Development Ltd. • An incubator within Hadassah Hospital • Ownership: Hadassah Hospital • Entrepreneur receives up to 20% • Funding of projects: • Initial sources of funding: internal sources and Chief Scientist • In later stages external investors are sought by the incubator management team for each project • Management: highly experienced personnel • Present status: 5 companies

  12. Clal Biotechnology Industries Ltd • Ownership: Clal Investment Group • Up until 2 years ago the company only invested in mature companies: at least in phase 1. • Following a strategic decision to invest in Start-ups the incubator was established. • The incubator will house 4 portfolio companies • Shared infrastructure including clean rooms • GMP/GLP services

  13. The Center for Advanced Technologies • An incubator within Tel-Hashomer hospital • Ownership: Tel Hashomer – the state of Israel • Incubator concept: • To commercialized ideas coming from the hospital staff • To enable external entrepreneurs using the advance hospital infrastructure

  14. The Center for Advanced Technologies • 5 permanent research staff • Funding of projects: mainly from the chief scientist and from MAGNET. Some projects are funded by private investment • 6-8 projects

  15. “Most incubators tend to become specialized within biotechnology” Main causes for this: • Geographic proximity between companies leads to synergies • Management specialization • Shared infrastructure • Relevant Network

  16. The New Public Biotech Incubator Initiative

  17. Rationale • Biotech requires more time • Biotech requires more funding • Importance of shared infrastructure • Specialized management is crucial

  18. The New Bio-incubator Scheme • 2 public bio-incubators will be established • Duration: 3 years • Funding per project: $1.8 million • Government participation: • Year 1 - 85% • Year 2 - 75% • Year 3 - 65%

  19. The New Bio-incubator Scheme • Shared infrastructure (50% public participation) • Specialized in-house auxiliary services • Involvement of multinational pharma company • Involvement of leading VC • Strong emphasize on management

  20. Bio-Link project • EC funded project within FP5 • Two main objectives: • Information exchange and networking • Stettin and validating a Co-incubation model

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