INNOVATION CONTINUES TO DRIVE ISRAELI ECONOMIC GROWTH DESPITE IDLE ULTRA-ORTHODOX SECTOR

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Innovation Nation: Megan Scudellari, The Scientist, July 1, 2013—In 2010, Daniel Teper, a New York-based biotech consultant and former executive with GlaxoSmithKline and Novartis, approached Simon Benita, dean of the School of Pharmacy and head of the Drug Research Institute at Hebrew University of Jerusalem.

 

CoreBone Implants Corals as Human Bone Replacements: Avner Meyrav, NoCamels, July 23, 2013 — “A few years ago, a friend of mine, who grows corals for decorative purposes, approached me. He asked me what could be done with the corals, other than putting them in an aquarium,” explains Ohad Schwartz, CEO of CoreBone, which manufactures bone-replacements from corals. “Though I came from a background in consumer products and high-tech, I love nature and the sea, so I dived into it, proverbially, and discovered a magnificent world.”

 

Lapid Criticizes Idle Ultra-Orthodox for Hurting Israeli Economy: Nadav Perry, Al-Monitor Israel Pulse, July 25, 2013—The most frightening man in the state of Israel is probably professor Dan Ben-David of Tel Aviv University. Ben-David, a renowned economics lecturer, is actually a pleasant and affable individual, but the message he bears should be disquieting for any Israeli concerned with the future of his country.

 

On Topic Links

 

How to Bolster ‘Natural Killer’ Cells Against Flu: Abigail Klein Leichman, Israel21c, July 22, 2013

Sol Chip Creates The Everlasting Solar Battery: Johnathan Leow, NoCamels, July 22, 2013

Israeli Company Creates Solar-Panel Windows To Power Buildings: David Allouche, NoCamels, March 20, 2012

Business Is Personal: Why the EU's New Guidelines Could Hurt Israel's Economy: Bernard Avishai, The Daily Beast,  July 17, 2013

 

INNOVATION NATION

Megan Scudellari

The Scientist, July 1, 2013

 

In 2010, Daniel Teper, a New York-based biotech consultant and former executive with GlaxoSmithKline and Novartis, approached Simon Benita, dean of the School of Pharmacy and head of the Drug Research Institute at Hebrew University of Jerusalem. Teper was interested in commercializing Benita’s new drug-delivery technology. The two entrepreneurs had worked together previously to start the successful France-based ophthalmology biotech, Novagali, but this time, Teper decided to establish the new venture in Israel.

 

“I was familiar with the environment of innovation and entrepreneurship in Israel,” says Teper, an American who had worked with Israeli companies in the past. He knew that Israel had low start-up costs compared to the United States or Europe, and a thriving community of angel investors. “In Israel, the amount of venture capital available per capita is phenomenal,” says Teper. “People in Israel have done it before and want to reinvest in other entrepreneurs.”

 

Within months, Teper founded IMMUNE Pharmaceuticals in Herzliya-Pituach, a high-tech beach town just north of Tel Aviv, with $5 million raised primarily from Israeli investors, and licensed Benita’s technology. Today, the company has a thriving pipeline of monoclonal antibodies and a lead drug candidate for inflammatory bowel disease in a Phase 2 clinical trial. “When doing research in Israel, it’s just more efficient,” says Teper. “For every dollar that we invest, we get more for our money.”

 

Indeed, Teper isn’t the only one feeling the pull of Israeli biotech. According to the State of Israel’s Ministry of Industry, the number of life-science companies has grown from 186 in 1996 to more than 1,100 in 2012. “That’s enormous compared to the 7 million population of Israel,” emphasizes Yaky Yanay, chief financial officer of Pluristem Therapeutics in Haifa. Medical-device companies make up almost 50 percent of that pool, and Israel is number one worldwide in medical-device patents per capita. It is also a close second to the United States in biopharma patents per capita….

 

Israel’s biotech roots go back to 1901 with the founding of Teva Pharmaceutical Industries, then a small business that distributed imported medications around Ottoman-controlled Palestine using mule and camel caravans. Today, Teva is Israel’s largest pharmaceutical company and one of the top 10 pharma companies in the world. While Teva is known for generic medicines, it has also brought novel made-in-Israel compounds to market, including the blockbuster multiple sclerosis drug Copaxone and the Parkinson’s disease treatment Azilect.

 

Teva’s success has had a profound impact on the country. The company has brought local biotechs under its wing, for example, and groomed local management talent. But because the company remains focused on generics, it is unlikely that Teva executives will change their strategy to “become the next Roche or Pfizer” with a pipeline of novel compounds, says Yaacov Michlin, president and CEO of Yissum, the technology-transfer company of Hebrew University. Instead, he says, the key to success for biotech in Israel is starting a small company, then catching the attention of Big Pharma. “When I go and speak to colleagues, everybody wants to innovate. Everybody wants to create something new,” says Adi Elkeles, chief technology officer of Micromedic, a cancer diagnostics company based in Tel Aviv. “The amount of small companies that exist in Israel is phenomenal.”

 

Jerusalem-based BioLineRx, for example, has only 50 employees, but boasts a pipeline of six clinical-stage therapeutics. Pluristem, with a staff of 140, has several placenta-based cell therapies in Phase 2 trials, including two for orphan drug indications, and hopes to begin Phase 3 trials soon. The source of the innovation that seeds these companies, entrepreneurs agree, is the medical centers and seven universities in the country that offer advanced degrees, including Hebrew University of Jerusalem, the Weizmann Institute of Science, and Tel Aviv University. These institutions have become factories of novel life-science technologies and medical treatments. In fact, Weizmann, Hebrew, and Technion–Israel Institute of Technology, located within a mere 1.5-hour drive of one another, have among them seven blockbuster drugs on the market, notes Michlin.

 

But savvy businesspeople are also needed to commercialize good ideas from academia. In this, too, Israel is not lacking. In 2009, a best-selling book by Dan Senor and Saul Singer christened Israel the “Start-Up Nation,” a title that Israelis have fondly embraced. As the book chronicles, the country has experienced unparalleled success in the high-tech sector, founding hundreds of software and communications businesses, many of which have flourished. “When you look in the paper and every week you read about another company that’s been sold, it creates a certain atmosphere that you just want to join,” says Nadav Kidron, CEO of Oramed Pharmaceuticals, a lawyer who had no biotech experience prior to starting the company.

 

…[M]ost important to its success, the Israeli biotech sector has had a steady infusion of government money. A federal incubator program offers fledgling entrepreneurs, even those with just an idea, seed money of $425,000 to $680,000, to be paid back only upon the company’s success. Protalix BioTherapeutics, one of Israel’s oft-cited success stories, was the recipient of such a grant. Overall, the Office of the Chief Scientist, the government agency that distributes R&D funds, has an annual budget of $300 million distributed to an average of 1,000 projects proposed by 500 companies. “The combination of government, academia, and industry has built a microenvironment to take so many ideas forward,” says Yanay. “We are on the way to building a strong and advanced biotechnology industry.”

 

Like a good son, Oramed Pharmaceuticals’ Nadav Kidron wasn’t afraid to take advice from his mother. A senior diabetes researcher at Hadassah-Hebrew University Medical Center in Jerusalem, Miriam Kidron was part of a team that developed a technology for the oral administration of insulin. Nadav Kidron recalls the time, a few years after he’d finished law school, that she came to him with an idea: “One day, she tells me, ‘Listen, son. We’ve had a breakthrough in the work we’ve been doing for years, and finally we’re at a point where this technology can be commercialized.’”

 

Nadav Kidron, a savvy businessman, negotiated with Hadassah to take the technology out of the university and founded Oramed to bring the product to market. The company received more than $1 million in start-up funds from the Office of the Chief Scientist, then raised an additional $20 million from investors. Today, the company has completed Phase 1 and 2 trials, conducted primarily in Israel, and in May received approval from the US Food and Drug Administration (FDA) to begin a Phase 2 trial in the U.S But like most Israeli biotech CEOs, Kidron does not plan to take the drug all the way to the market. “At the end of the day, we’d like to partner with someone who has better marketing ability than ours, and we’ll stay behind the scenes with the R&D,” he says.

 

This is a common theme among Israeli biotechs, which, though strong in innovation, do not have the funds or expertise to get drug candidates through Phase 3 and onto the market. One of Israel’s most-cited biotech success stories exemplifies this trend. Last year, the FDA approved Protalix’s enzyme therapy for Gaucher disease, the first pharmaceutical to be made in a plant-cell culture manufacturing system. But to develop and commercialize the drug, Protalix partnered with Pfizer—and has already made a cool $98 million as a result. “We are good at taking compounds into clinical stages 1, 2a, maybe 2b, but that’s it,” says Michlin. “We don’t currently have the capability, funding, or management experience to launch a full Phase 3 trial and to market a drug worldwide.”

 

“Israelis are serial entrepreneurs,” adds Teper. “They’re great at starting companies, but maybe they have less patience to scale up companies.” While an Internet company, for example, can go from a garage to international market in just a couple of years, biotechs require much more time and larger financial commitments. And though Israel has a booming venture capital community, Israeli investors are used to short- to mid-term investments, like those done for high-tech companies, says Michlin. Overall, there is a lack of late-stage funding to pay for expensive Phase 3 clinical trials or the costs to market a drug internationally.

 

Despite working on different timelines, Israeli biotech executives do look to the country’s successful high-tech sector for ideas about how to improve. Israel is home to large research centers for monster tech companies such as Google, Intel, General Motors, and more. Apple’s R&D center in Herzliya is the company’s only research site outside of the United States. The same model does not exist for biotech—at least, not yet.

 

Similar international research centers, established by large pharmaceutical companies, could make a big difference for Israeli science. “We really need the pharma companies to establish R&D centers in Israel, so the scientists and engineers here in biotech will learn how it’s done in large companies,” says Zeevi. As cochair of IATI, Zeevi is working with colleagues and the Israeli government to set up programs to attract these companies to the country, he says. “It would be another key component of building the life-sciences industry in Israel. We need that experience and knowledge.”

 

But while Israel boasts a well-educated and experienced workforce, large pharma companies may be turned off by its distance from the U.S. or by the perception of a hostile political environment, says Teper. However, if Israeli entrepreneurs can lure pharma representatives to the country for a visit, he adds, that misunderstanding is quickly dispelled. “You could be in California; it’s not that different,” Teper says. “I actually feel more secure sometimes [in Israel] than in the U.S. or Europe. There is no tension on a day-to-day basis.”

 

And Big Pharma is showing some interest. Four years ago, Roche partnered with Pontifax Funds, a life-sciences venture-capital fund in Israel, to identify ventures and technologies to add to Roche’s R&D portfolio. Last year Merck Serono, a division of the German pharma giant Merck KGaA, invested $13 million in a biotech incubator called Inter-Lab in Yavneh, Israel. While not necessarily the R&D center Zeevi was hoping for, Inter-Lab includes lab facilities and business support for 5–6 companies, Merck reported, and more than 130 biotech start-ups have applied for the program. “Although we are a small country and not in Europe or the U.S., we are still on the map with all the big pharma companies,” says Michlin. “Once we have a good product or technology, we can find a partner and get it to the market.”

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COREBONE IMPLANTS CORALS AS HUMAN BONE REPLACEMENTS

Avner Meyrav

NoCamels, July 23, 2013

 

“A few years ago, a friend of mine, who grows corals for decorative purposes, approached me. He asked me what could be done with the corals, other than putting them in an aquarium,” explains Ohad Schwartz, CEO of CoreBone, which manufactures bone-replacements from corals. “Though I came from a background in consumer products and high-tech, I love nature and the sea, so I dived into it, proverbially, and discovered a magnificent world.”

 

Schwartz had first gotten acquainted with the world of biomedical entrepreneurship during his time at Vacia (a drug delivery management company) and Aspect AI (an MRI company). He started studying the field and found that the idea for using corals as bone substitutes had already been suggested 30 years before.

 

He approached Professor Itzhak Binderman, former Head of Dental Department and Hard Tissue Laboratory, at the Sourasky Medical Center and the School of Dental Medicine and Department of Bio-Engineering. ”It turned out that Binderman had already dealt with using corals to build bone tissue, and was even the scientific consultant for an American company called Interpore, which was sold for $270 million and was in that market,” Schwartz says. “So he said ‘it’s nothing new.’ I answered that by harvesting the corals ourselves we could control the coral’s quality. That caught his interest.” Binderman became a co-founder and the company’s head scientist.

 

When treating injured bones or bone implants when the bone is missing, it is customary to use bone replacements, which act as a scaffolding for real bone to grow on. The scaffoldings contain different substances – minerals, drugs and growth factors – that can “convince” bone to grow fast, efficiently and effectively. This is especially important in older patients, whose bones are slow to rehabilitate themselves. Most bone replacements today are synthetic or made of different types of polymers, to which growth factors or stem cells are added. Another option is harvesting real bone from cadavers or animals.

 

Corals are already being used commercially as bone reconstruction scaffolding. However, harvesting them from the ocean is tricky, both legally and logistically and there’s little control over the source or quality of the coral. CoreBone is growing corals in a way that enables it to adapt them so they can be used as bone replacements. “On the one hand, a coral is perfect for growing bone. It is made of calcium, which is a main component in human bones and is also as strong as human bone, and on the other, it is porous, so blood vessels can grow inside it,” says Schwartz.

 

“Companies which harvest corals from the sea take them to a lab and manipulate them.” The bone replacement market is worth $3.5 billion and coral-based replacements that have reached the market already constitute $100 million of it. “We grow the corals on a bioactive mineral diet. These are the substances that can attract bone cells to them when the coral is implanted in the body. When the new bone cells attach to the coral, they digest it at the same rate as the bone grows,” Schwartz says. It’s important to specify that a coral is actually a living creature that builds a calcium structure that serves it as a home. When talking about “coral” transplant, it is actually the calcium frame without the living creature. Schwartz aads: “It is more complicated to manufacture a coral than a polymer, but it’s worth it. At the end of the process, a coral grown by us is cheaper than polymers that had cells attached to them.”

 

So far, the company has done several animal trials in cooperation with Tel Aviv University, using Ramot, the university’s technology commercialization company. “We received terrific results – the bone grew within 21 days of transplant, and there was even marrow growth. After one year of activity – we have a product,” says Schwartz.

 

The company, which grew out of the Mofet incubator, part of the TrendLines Group, is planning to enter the dental market, where barriers to entry are lower. Next, they plan on going to the larger, more complex orthopedic market. “We’re seeking a $2.5 million investment, over a period of time, by the end of which we will have products for the dental and orthopedic markets and full manufacturing capabilities for the corals,” Schwartz estimates.

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LAPID CRITICIZES IDLE ULTRA-
ORTHODOX FOR HURTING ISRAELI ECONOMY

Nadav Perry

Al-Monitor Israel Pulse, July 25, 2013

 

The most frightening man in the state of Israel is probably professor Dan Ben-David of Tel Aviv University. Ben-David, a renowned economics lecturer, is actually a pleasant and affable individual, but the message he bears should be disquieting for any Israeli concerned with the future of his country. As executive director of the Taub Center of Social Policy Studies, Ben-David goes around the lecture circuit and meets people all over the country, illustrating with the help of diagrams and dry statistical data the extent to which the survival of the state of Israel cannot be taken for granted.

 

The data reveals the annual rate of increase in the number of Israelis who do not participate in the workforce. They are not listed as unemployed because they're not even looking for work. Most of them are ultra-Orthodox. As the percentage of ultra-Orthodox in the population grows — and it has been growing steadily and speedily — the percentage of productive Israelis participating in the workforce grows smaller. Ben-David concludes that given the current state of things, the Israeli economy will soon no longer be able to continue to support the non-working ultra-Orthodox population. Quality of life in Israel is relatively high, but it could have been far higher had there not been an entire sector that has — for years — refrained from joining the job market out of a rigid religious ideology. Unless a radical change takes place, Israel is marching toward the edge of an abyss. The system that has been in place for 65 years simply cannot be viable for much longer.

 

The public debate in Israel regarding the integration into society of the ultra-Orthodox Jews hardly deals with this issue. The focal point is always “sharing the [military] burden” — the same worn slogan that has long since become a sure springboard for any secular politician wishing to gain popularity. The last one to make use of it was the Yesh Atid chairman, Finance Minister Yair Lapid. Since forming his party at the beginning of 2012, Lapid was careful to declare that he has nothing against the ultra-Orthodox and that, unlike his late father — former Knesset member Tommy Lapid, who headed the Shinui party in the previous decade — his party would not be anti-clerical. The plan for drafting the ultra-Orthodox into the army, which he presented at the start of the election campaign, focused first and foremost on getting the ultra-Orthodox into the job market and only then integrating them into military and national service.

 

But then — somewhere in the middle of the campaign — Yesh Atid faced a crisis. The polls indicated a decline in support and the strategic advisers decided to hone the message. Lapid, who up until then had spoken about a variety of issues on the agenda, started focusing on the ultra-Orthodox and repeating the “shared burden” refrain. This move paid off when he raked in 19 Knesset seats in the elections in January 2013, becoming the head of the second largest party, after the Likud. Today, too, even as he is attacked for an austerity budget which he has been pushing as finance minister, Lapid still gets positive feedback whenever he criticizes the ultra-Orthodox. In virtually every speech he delivers from the Knesset podium, a significant part of his comments is devoted to attacking the ultra-Orthodox. That’s his comfort zone.

 

On July 23, the Knesset gave initial approval to the government’s plan, led by Yesh Atid’s cabinet member, Minister of Science and Technology Yaakov Perry, for drafting ultra-Orthodox men into the military. Public attention was focused on the blatant provocations acted out by some ultra-Orthodox Knesset members during the stormy debate. But all the shouting notwithstanding, data presented in his Knesset speech by ultra-Orthodox Shas Party Chairman Aryeh Deri stood out. According to his data, since the beginning of the year, the rate of ultra-Orthodox enlistment has dropped 30%. After years of a slow, quiet increase in the number of ultra-Orthodox who don uniforms, the trend has turned around. This occurred at the same time as the public debate on the issue was heating up and Yair Lapid was enjoying his meteoric rise. The more Lapid spoke about ultra-Orthodox enlistment, the more the number of recruits declined.

 

In recent months, since the formation of the new government which raised the “shared burden” banner, there has been a rise in attacks by members of the ultra-Orthodox community on those among them who decide to trade in their religious studies at the yeshiva (religious institution) for military service. In several recent incidents, policemen were forced to extricate soldiers wearing kipas (skullcaps) who were attacked while walking around ultra-Orthodox neighbourhoods. These phenomena did not exist a year ago. The “shared burden” campaign benefited Yair Lapid, but diminished the chance that equality would be achieved….

 

The ultra-Orthodox have earned the Israeli street’s hostility toward them after decades of isolation and seclusion. There’s no justice in their continued refusal to take part in efforts to sustain and advance the State of Israel. But an attempt to resolve a generations-old problem by brandishing a sword, and with forcefulness, will achieve the opposite result.

 

Instead of fighting them, it would have been better to move forward slowly, in cooperation with the ultra-Orthodox, to achieve the declared goal. The alternative of the continued ultra-Orthodox isolation and the status quo is simply too dangerous for Israel.

 

Contents

 

On Topic

How to Bolster ‘Natural Killer’ Cells Against Flu: Abigail Klein Leichman, Israel21c, July 22, 2013—Our immune systems are equipped with “natural killer” (NK) cells that recognize and eliminate influenza-virus-infected cells in order to keep the virus from spreading. If NK cells always worked perfectly, nobody would get sick with the flu. Obviously, something can go wrong because many people do get flu.

 

Sol Chip Creates The Everlasting Solar Battery: Johnathan Leow, NoCamels, July 22, 2013

A battery with infinite power. Has the Israeli company Sol Chip found the way to do it? The Haifa-based company has developed the world’s first solar battery that is able to recharge itself to power wireless sensors and mobile electronics devices. Operable in sunlight and low-light environments, the batteries are a result of the cross pollination of solar cell and microchip technologies.

 

Israeli Company Creates Solar-Panel Windows To Power Buildings: David Allouche, NoCamels, March 20, 2012 —An Israeli startup is trying to implement solar power in crowded urban places, by generating it from the windows of buildings and skyscrapers. According to Pythagoras Solar, buildings are the largest consumers of energy worldwide and are also the least energy-efficient.

 

Business Is Personal: Why the EU's New Guidelines Could Hurt Israel's Economy: Bernard Avishai, The Daily Beast,  July 17, 2013—The European Commission's decision to condition Brussels’ future agreements with Israel on the recognition that East Jerusalem, the West Bank, and the Golan Heights are "occupied territories" is a major development, not because of what it does, but for what it dramatizes.

 

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