The Israeli life science industry is uniquely poised in the global ecosystem and the trajectory is likely to go north. According to a recent report by Israeli Advanced Technology Industries (IATI), the robust Israeli life ecosystem has produced close to 1400 companies in the last decade solving pressing problems in the diverse range of sectors, including but not limited to, biotechnology, medical devices, diagnostics, digital health, healthcare IT, etc. Further, a lion’s share of these companies (about 823) is in the early stages. One of the major reasons for Israeli superiority in the life science industry stems from significant spending on R&D (about 4% of GDP) and the seamless technology transfer from acclaimed research institutions, most notably the Weizmann Institute of Science.
Recently, the Weizmann Biotech Club organized a panel discussion to take a pause and reflect on the current state of the industry in the country and project on its possible future trajectory. The Weizmann Biotech Club is a student-run professional forum at the institute focused on narrowing the gap between the students and the life sciences industry. The mission of the club is to educate the students on the nuances of the industry while providing a platform for the students to network with the senior leaders of the Israeli and global biotech industry. The panel was composed of many distinguished speakers and moderated by Mr. Gil Granot-Mayer, CEO of Yeda R&D, which is the commercial arm of the Weizmann Institute.
Biotech versus Devices/IT
When asked which of the subsectors holds the most promise, Prof. Gabriel Barbash, ex-CEO of the Tel Aviv Sourasky Medical Center who is now heading the bench-to-bedside project at the Institute voted for greater digital adoption in healthcare. Although pharma and biotech can lead to higher returns in absolute dollar value on a longer time scale, new-age technologies such as healthcare IT, use of big data in radiology, pathology, and digital health hold most promise on a shorter time scale to bring a greater impact to the patients. Echoing similar thoughts, Lior Tietalbaum, Chief Business Officer of FutuRx biotech accelerator further said, “The value that biotech companies bring is very different from medical device/diagnostics companies”. While a device/diagnostic company needs to demonstrate use-case with a defined business model for the end-users to be profitable, biotech companies produce financially valuable intellectual property that can be sub-licensed to other companies.
Stay in Israel or go to the US?
Almost all panelists were of the opinion that while Israeli companies are very competent in spinning off new technologies and leading the early-development, the bottleneck is turning them into sizeable entities comparable to the major American biotech corporations, which are proficient in late-stage development and marketing. Ofer Gonen, CEO of Clal Biotechnology Industries (TASE: CBI) reasoned that this can be attributed to the fact the capital raised from private and institutional investors in Israel is very low as compared to mature life science ecosystems, such as that of Boston. In the year 2018, Israeli life science companies attracted an investment of $1.5 billion, while in Boston alone, the venture investment surpassed $5.5 billion. “It’s hard to scale up, without that kind of investment”, Gonen added. He also cited the example of CAR-T therapy which was developed at the Weizmann Institute in the lab of Prof. Zelig Esher, which realized its full potential only when it went to the US in the form of Kite Pharma, which was later acquired by Gilead for a record $12 billion. Dr. Daniel Katz, who leads the Israel office of NJ-based oncology giant Bristol-Myers Squibb (NYSE: BMY), further added that it makes sense that US companies are more successful. “The US is the biggest pharmaceutical market and it helps to be close to the patients, physicians, and other stakeholders. That said, I am most excited about emerging technologies with already established clinical adoption such as immunotherapy and cell therapy. In both cases, Israeli companies have the potential to perform well”, Katz added.
Challenges ahead
Almost everyone agreed on the fact that the biggest challenge is the wide gap between the industry and academia. According to Gil Granot-Mayer, “The so-called “valley of death” where the lab inventions make it into a venture is a hard path to cross”. How do we ensure that we focus on fundamental curiosity-driven research while making the products of the research worthwhile for the patients is an unsolved mystery? Prof. Barbash also sounded similar concerns stating that basic researchers often miss the connection with the translational side. There is a growing need for people from diverse backgrounds (including science, industry, regulatory and hospitals) to come and work together.
Advice for students aspiring to succeed in biotech
The session concluded with many interesting words of enlightenment for the students. While Mr. Gonen asserted that one’s first job should be the one that allows maximum learning opportunities, Mr. Tietalbaum reiterated his confidence in the training the students receive in Israel. Even many students who choose to go abroad return back with interesting technologies that they picked. Furthermore, Prof. Barbash suggested students to bring a unique value proposition that can add to the competence of an organization. He also offered interesting advice on attaining formal training in other areas of drug development such as regulatory affairs, intellectual property, managing clinical trials, etc. Finally, Dr. Katz encouraged students to project on their intended career path ahead of time and talk to as many people as possible who have chosen a similar trajectory.
Weizmann Biotech Club is supported by the career development program of Feinberg Graduate School, the academic arm of the Weizmann Institute of Science. The author is a Ph.D. candidate at the Department of Molecular Genetics and a co-founder at the Weizmann Biotech Club.