ISRAEL’S HIGH-TECH, SPACE, & BIOTECH FIELDS HAVE MUCH TO OFFER TO THE WORLD

After Imperva and Mobileye, Here's What's Next For Israeli Startups: Peter Cohan, Forbes, Aug. 21, 2017— Israel has taken plenty of companies public on the NASDAQ…

China’s Space Silk Road and the Middle East – The Israeli Perspective: Dr. Eytan Tepper, Space Watch Middle East, Aug. 2017— China’s U.S.$1 trillion Belt and Road Initiative (BRI) to establish a network of roads, railroads, and sea routes and ports is underway, and it has a space segment.

Coming of Age, Israel Biotech Sector Gets Ready for Market: Shoshanna Solomon, Times of Israel, Aug. 17, 2017— The sale of Israeli drugmaker NeuroDerm to Japanese pharma giant Mitsubishi Tanabe for $1.1 billion last month in the largest ever purchase of an Israeli healthcare company…

Latin American Allies: Editorial, Jerusalem Post, Sept. 10, 2017— Prime Minister Benjamin Netanyahu embarked Sunday on a whirlwind visit to Latin America, the first of its kind for a sitting Israeli head of state.

 

On Topic Links

 

Israel, China Sign $300M CleanTech Deal: Jewish Press, Sept. 11, 2017

SpaceIL Craft on Assembly Line as Race to Moon Nears: Abigail Klein Leichman, Israel 21c, Aug. 7, 2017

Foreign Investment in Israel’s Strategic Industries: Efraim Chalamish, BESA, July 27, 2017

China in the Red Sea: The Djibouti Naval Base and the Return of Admiral Zheng He: Gideon Elazar, BESA, Aug. 23, 2017

 

 

AFTER IMPERVA AND MOBILEYE,

HERE'S WHAT'S NEXT FOR ISRAELI STARTUPS

Peter Cohan

Forbes, Aug. 21, 2017

 

Israel has taken plenty of companies public on the NASDAQ — including Imperva, CyberArk, and Mobileye — which went public in August 2014 and was bought by Intel for $15.3 billion in March 2017. While many of these startups get acquired by big U.S. companies and most split their teams between the Tel Aviv area and Boston or Silicon Valley, that could be changing according to six experts I interviewed.

 

Before getting into that, let's look at the numbers. In the second quarter of 2017, 157…Israeli high-tech companies raised $1.26 billion… — the second highest quarterly amount in the past five years. For the first half of 2017 — 18% below the strongest period in recent history (the first half of 2016), 312 Israeli high-tech companies attracted $2.3 billion, according to Israel Venture Capital (IVC).

 

Israeli tech exits in 2016 were down — with mergers much higher than IPOs. Total exits last year totaled $10 billion. There were "93 M&A deals, eight buyouts and just three IPOs. The low number of IPO deals, totaling just above $15 million, made 2016 the year with the second-fewest IPOs in the past 10 years. In 2014, by comparison, Israeli tech IPOs reached a record $2.1 billion in 17 deals," according to Start-Up Israel. These declines are not a big surprise since the U.S. IPO market has been in the doldrums since 2014 and is showing no signs of recovery as I wrote earlier this month. After all, tech IPOs like Snap and Blue Apron have mostly cratered. And the biggest unicorns have so much capital that they are in no hurry to brave the public markets.

 

But Israel continues to invest in and create startups thanks to its engineering talent, capital, and investment from U.S. tech giants like Microsoft, Google, Facebook, Intel and others. What's most interesting to me is that at least one company — run by Israel's most prolific info sec company founder, Shlomo Kramer, is that Israel is beginning to develop enough talent in marketing and sales that his latest company is able to operate out of Israel instead of being run from Silicon Valley.

 

Tel Aviv is the center of Israel's startup scene even though its top talent is educated 52 miles away at Haifa's Technion. As Edouard Cukierman, Managing Partner and Founder of Catalyst Funds, said in an August 10 interview, "When I was at the Technion, the joke was 'What is the nicest place in Haifa? The highway to Tel Aviv.' Entrepreneurs want to be in Tel Aviv — it's a place of fun; whereas Haifa is a serious place for studying."

 

Haifa 's Technion is not investor friendly according to one expert. Shlomo Maital, an emeritus professor of economics there, explained in an August 6 e-mail, "I have a personal ‘beef.' Universities in general, Technion in particular, in my view, cling too tightly to IP developed within the university. This deters investors like citronella deters mosquitos.  MIT let Bose use his Ph.D. results to launch a speaker company — later, Bose willed the whole company to MIT! Technion does not follow this model. I regret it. Technion is a public university, funded in part by government (at least, the operating budget). IP developed within Technion belongs to the people and should be more freely released…"

 

Pillar companies — local, publicly-traded tech companies that supply talent and capital to startups — are not big drivers of the Tel Aviv startup ecosystem. As Cukierman said, "There are 200 Israeli publicly-traded companies and thousands of private tech companies there; but besides Check Point Software, the public companies that help our ecosystem are Google, Intel, Microsoft, HP and others. These U.S. companies buy the private Israeli companies or open incubators here to get access to Israeli R&D talent." Indeed, demand for that engineering talent outstrips supply. "There is a 10,000 engineer shortage in Israel. Companies are setting up engineering operations in Eastern Europe. Most of the engineering talent comes out of the Israeli Defense Force — units like the 8200 — which specializes in information security. But there is a good amount of talent from the University of Tel Aviv, Hebrew University, and Ben Gurion University of the Negev," explained Cukierman.

 

The enterprise marketing talent in Israel generally comes from well-regarded U.S. companies. As Uri Goldberg, an expert on Israel's high tech ecosystem, said, "The vast majority of marketing and sales executives and general managers I know were trained at places like Google, Facebook, or Akamai. VCs want to be able to see that you have the best people — these U.S. brands represent quality. I can feed my family because I am a McKinsey alum." With 272 U.S. IPOs and 101 European IPOs, Israel has generated plenty of capital for startups…[To Read the Full Article Click the Following Link—Ed.]           

 

Contents

CHINA’S SPACE SILK ROAD AND THE MIDDLE EAST –

THE ISRAELI PERSPECTIVE

Dr. Eytan Tepper

Space Watch Middle East, Aug. 2017

 

China’s U.S.$1 trillion Belt and Road Initiative (BRI) to establish a network of roads, railroads, and sea routes and ports is underway, and it has a space segment. Israel has an opportunity to be an important part of the BRI and its space segment, but it does not want to jeopardize its strategic alliance with the U.S., which is suspicious of the BRI. Additionally, there are also concerns emanating from participation of countries hostile to Israel. Israel has much to contribute and gain, and considering the opportunities the BRI and its space segment opens for Israel, it should take an active part in the BRI to the extent that it will not jeopardize its security interests and its strategic alliance with the U.S. Such a path is possible and should be carefully pursued.

 

The BRI, also known as the One Belt One Road (OBOR), is comprised of two main segments: the Silk Road Economic Belt and the 21st Century Maritime Silk Road. There are two less known segments, the Air Silk Road and a space-based Silk Road – the Space Silk Road. The BRI will connect East and West, facilitate trade, and promote development along the routes. The transportation and development along the routes need space-based navigation, communication, and observation services. This is the purpose of the “Space Information Corridor” that will make use of existing as well as new, special-purpose satellites.

 

The latest white paper on space policy published by the Chinese State Council in December 2016 specifically refers to the BRI. The white paper calls for “strengthening bilateral and multilateral cooperation [in space activities] which is based on common goals and serves the Belt and Road Initiative”. It stipulates the goal of “construction of the Belt and Road Initiative Space Information Corridor, including earth observation, communications and broadcasting, navigation and positioning, and other types of satellite-related development; ground and application system construction; and application product development”. It further specifically sets the target for China’s Beidou navigation system to “to start providing basic services to countries along the Silk Road Economic Belt and 21st-Century Maritime Silk Road in 2018 [and] form a network consisting of 35 satellites for global services by 2020…”

 

According to the published plans and statements, we can expect an array of existing and new satellites providing a range of services supporting transportation, communications, and development along the routes. The services will include traffic navigation and control and satellite-based mobile phone services with dedicated satellite smartphones. Further applications will facilitate mitigation of natural disaster, climate change tracking and mitigation, environmental sustainable development, smart agriculture, management of water resources, natural resources discovery, and management and preservation of cultural and natural heritage. We may expect further commercial applications that will provide services to residents, workers, and travelers along the routes and connect them with local service providers.

 

To accomplish all that there is a need for new satellites, ground stations, compatible receivers and smartphones, and new software and applications. This opens the door for a variety of private initiatives for applications that will provide related services. According to a report by the McKinsey & Company management consulting firm, the BRI will cover about 65% of the world’s population and about a third of global GDP, which renders the economic opportunities too high to be ignored.

 

There is an opportunity for Israel to be an important player in the Space Silk Road. Israel is already a close trade partner of China, a source of advanced technologies, and a founding member of another of China’s, and President Xi Jinping’s, flagship project – the Asian Infrastructure Investment Bank (AIIB), which is likely to provide part of the finance for the BRI, along with the Silk Road Fund.

 

Israel, for which high-tech industry is the distinct growth engine that earned it the title “start-up nation”, is also a sophisticated spacefaring nation. Israel joined the exclusive club of spacefaring nations in 1988 and has demonstrated capabilities and products in space infrastructure, products, and services, including leading optical equipment and small satellites. Israel has the eighth largest share of global space services. Furthermore, in 2012 Israel adopted a new Civil Space Policy with plans to boost its civil space industry and place it amongst the top 5 leading nations, making commercial space the next growth engine for the Israeli economy.

 

Potentially, Israel could provide communications and observation satellites, ground segments, receivers, software and applications that are already part of its existing supply. Israel’s bustling app industry can produce new, dedicated apps that will use and support the utility of the satellites serving the BRI.

 

The white paper on the development of China’s Beidou Navigation Satellite System published in June 2016 ‎[6] states that “China will jointly build satellite navigation augmentation systems with relevant nations, provide highly accurate satellite navigation, positioning and timing services, improve the overseas [Beidou] service performances, and promote international applications of navigation technologies.” Israeli companies like Gilat and Waze have long been providing receivers, satellite services, and leading applications utilising satellite navigation systems and Israeli companies can develop hardware and software that will utilize the Beidou system and boost its usability.

 

In almost every segment of the Space Silk Road, Israeli companies have proven capabilities of the highest level and can provide hardware, software and applications, existing and dedicated. The economic potential is significant, and can realize the goal of the Israeli civil space policy to be among the top five leading nations in the space sector…

[To Read the Full Article With Footnotes Click the Following Link—Ed.]                                                   

                                                                       

Contents

COMING OF AGE, ISRAEL BIOTECH SECTOR GETS READY FOR MARKET                                                          Shoshanna Solomon

Times of Israel, Aug. 17, 2017

 

The sale of Israeli drugmaker NeuroDerm to Japanese pharma giant Mitsubishi Tanabe for $1.1 billion last month in the largest ever purchase of an Israeli healthcare company, has put the spotlight on Israel’s biotech sector, where a number of other firms are gearing up for commercialization of their product. “This is a big deal,” said Anya Eldan, vice president of the Israel Innovation Authority’s Startup Division, about the NeuroDerm deal. “We don’t see this kind of valuation often for a biotech company; it is more typical of an internet company. It shows big support for the Israeli biotech industry.”

 

NeuroDerm develops treatments for patients suffering from Parkinson’s disease, as well as other disorders related to the central nervous system. The firm’s leading product candidate is not even on the market yet, but is in advanced clinical trials in both Europe and the United States. The product could hit the market as early as 2019, Mitsubishi Tanabe said last month.

 

NeuroDerm was founded in one of the Innovation Authority’s technological incubators in 2003 and received the authority’s financial support for seven years, Eldan said. “It is very gratifying that one of our companies has done so well. The company now has a strategic partner that will help bring its product to the market.”

 

Biotechnology firms typically have a long and painful journey to success. Much money and patience and a lot of luck is needed to develop a drug, a process that takes years and goes through identifying a need, getting an idea for a drug, developing the drug and then undertaking clinical trials that may ultimately lead to regulatory approvals worldwide and commercialization. The chances of failure at each of these stages is huge. And little successes bring much joy.

 

“In biotech, it is very difficult to succeed, and building an ecosystem in Israel requires patience,” said Eldan. The NeuroDerm deal, she said, “is the beginning of the coming of age of the Israeli biotech industry, and it is the result of a long-term government policy. We are very happy to see this kind of maturation, and there is still a lot of work to do.” But, she added, “eventually out of these young innovative companies the next big Israeli pharma firm will emerge.”

 

There are some 1,350 life sciences companies active now in Israel, 612 of them having been created in the last decade, 2007-2016, according to a 2016 Life Sciences Report by the Israel Advanced Technology Industries (IATI) released in May. The IATI is an umbrella organization of the high-tech and life sciences industries in Israel. Some $823 million flowed into the industry last year, accounting for 20% of all investments in Israeli high-tech, the report showed. And the industry is becoming more mature, with some 33% of companies in preliminary revenue phase, and 5% in the revenue growth stage.

 

Indeed, companies like BiondVax, a developer of a universal flu vaccine candidate; Gamida Cell, a maker of cell and immune therapy technologies; RedHill Biopharma Ltd, a developer of drugs for gastrointestinal diseases; and Vascular Biogenics Ltd. (VBL), a maker of drugs that targets blood vessels to stop the spread of cancer are all gearing up toward commercialization of their products.

 

RedHill Biopharma, the biotech company founded by two kibbutz dwellers, Dror Ben-Asher and Ori Shilo, is traded both in Tel Aviv and on the Nasdaq. The firm is conducting late-stage clinical trials for several drugs, including two that aim to tackle Crohn’s disease and H. pylori, the bacteria that is the root of ulcers and a major cause of gastric cancer, respectively. RedHill also has a pipeline of other advanced clinical-stage experimental medications in the works, as a way to spread out risk. RedHill is currently setting up its US commercial infrastructure and salesforce, headquartered in Raleigh, North Carolina, as it waits for its other products to ripen and get the potential approvals needed from the US FDA.

 

Vascular Biogenics, founded in 2000 by its CEO Dror Harats, a professor at Tel Aviv University and a doctor at the Sheba Medical Center in Ramat Gan, develops anti-cancer gene therapies. Its flagship drug, VB-111, targets glioblastoma multiforme, an aggressive and difficult to treat type of brain tumor. The company plans to set up a new manufacturing facility in Modiin in central Israel, which will bring the company closer to the potential commercialization of the VB-111 drug.

 

BiondVax, a Ness Ziona-based company whose shares are traded on the Nasdaq and in Tel Aviv, is a developer of a universal flu vaccine candidate. The company said last month it has signed an agreement to lease a space of approximately 1,800 square meters in the Jerusalem BioPark, located in the Ein Kerem Hadassah Campus. The mid-sized facility is expected to have the capacity to annually produce tens of millions of doses of its flagship M-001 universal flu vaccine candidate, either in single-dose syringe or in bulk. M-001 is designed to provide protection against current and future seasonal and pandemic flu strains…

[To Read the Full Article Click the Following Link—Ed.]    

 

 

Contents

LATIN AMERICAN ALLIES             

Editorial                                         

Jerusalem Post, Sept. 10, 2017

 

Prime Minister Benjamin Netanyahu embarked Sunday on a whirlwind visit to Latin America, the first of its kind for a sitting Israeli head of state. It is part of a broader foreign policy push to develop ties with areas of the globe not traditionally on Israel’s diplomatic radar. While in the past the focus of Israeli foreign policy has been the US and Europe, in recent years there has been a concentrated effort to develop ties with countries in Africa, Asia and Latin America. Israel has much to offer these countries in the fields of agriculture, water management, cyber defense, counter- terrorism, crime fighting and other technologies.

 

Netanyahu’s first stop will be Argentina, where his day-and-a-half stay will coincide with the anniversary of the September 11 World Trade Center attack. He will visit the AMIA Jewish Community Center in Buenos Aires, which was the site of a terrorist attack planned by groups connected with Iran that left 85 dead. He will also visit the Israeli Embassy in Buenos Aires, which was targeted by Islamist terrorists in 1992.

 

Netanyahu’s decision to choose Argentina as one his stops is no coincidence. In sharp contrast to the Kirchner government, Argentina’s President Mauricio Macri is a strong supporter of Israel. Macri broke off attempts by the previous administration to improve ties and cooperation with Iran. He has also vowed to do more to get to the bottom of the bombings of the Israeli embassy and AMIA, and he is unabashed in his support for Israel and desire to improve economic and diplomatic ties. Macri faces strong opposition from elements close to the Kirchner political machine and the anti-globalization Left. These groups are expected to hold demonstrations during Netanyahu’s visit, including a protest against the very existence of an Israeli Embassy in Argentina.

 

While in Argentina, Netanyahu will also meet with Paraguayan President Horacio Cartes, another strong supporter of Israel. Unlike countries such as Brazil, Peru, Chile, El Salvador and Ecuador – which recalled their ambassadors during Operation Protection Edge – Cartes stood by Israel. Paraguay has also voted for Israel or abstained from Israel-related votes in the UN and other international forums since Cartes was elected in 2013.

 

Netanyahu’s next stops will be Colombia and Mexico. In Colombia, Netanyahu will meet with President Juan Manuel Santos, sign bilateral agreements on science and tourism cooperation, and visit the local Jewish community. In Mexico, the prime minister will meet with President Enrique Pena Nieto and sign joint agreements on space, aviation, communications and development cooperation. While in Mexico City, Netanyahu will also address a forum to encourage bilateral trade and attend an event organized by the local Jewish community. Netanyahu’s travel plans were unaffected by Friday’s earthquake – the strongest to hit Mexico in a century – that killed dozens and was felt in the capital.

 

In the face of the Boycott, Divestment and Sanctions movement, bias in the UN and other international forums, and the general prominence of antisemitic and anti-Israel rhetoric and sentiment, it is easy to forget that Israel also has quite a few friends scattered throughout the world. Widening our diplomatic efforts to those areas which have historically received less attention is important as part of the ongoing fight against unfounded attacks on the Jewish state.

 

In Latin America, criticism of Israel often goes hand in hand with anti-globalism or anti-American sentiments. But it is encouraging to note and celebrate those Latin American countries which are led by leaders who seek strong ties with Israel, not just out of appreciation for Israel’s democratic values, but out of a strong self-interest. Israel has much to offer. With the passage of time, more countries are beginning to realize this. Old prejudices are being set aside in favor of doing what is right from both a moral and pragmatic standpoint. Netanyahu’s visit reflects this simple fact.

 

Contents

 

On Topic Links

 

Israel, China Sign $300M CleanTech Deal: Jewish Press, Sept. 11, 2017—Israel and China signed a $300 million extension of a financial protocol between the two countries in Beijing on Monday, aimed at increasing Israeli exports of clean tech and agricultural technologies to China.

SpaceIL Craft on Assembly Line as Race to Moon Nears: Abigail Klein Leichman, Israel 21c, Aug. 7, 2017—Israel’s SpaceIL, one of only five teams remaining in the multi-million-dollar Google Lunar XPrize race to the moon, is starting to assemble the craft to be launched in 2018, according to SpaceIL CEO Eran Privman.

Foreign Investment in Israel’s Strategic Industries: Efraim Chalamish, BESA, July 27, 2017—The changing map of foreign investment in Israel demands a new balance between market access and investment review. The Israeli government has not yet communicated to the global investment community its vision for foreign investment in Israel, especially in the banking, insurance, commodities and defense markets.

China in the Red Sea: The Djibouti Naval Base and the Return of Admiral Zheng He: Gideon Elazar, BESA, Aug. 23, 2017—On July 11, ships carrying military personnel set sail from the Chinese naval base in Zhanjiang for the Horn of Africa. Their destination was Djibouti, where China has opened its first overseas naval base. According to the Chinese Xinhua news agency, the base is intended to “ensure China’s performance of missions, such as escorting, peace-keeping and humanitarian aid in Africa and west Asia.