Morris Laster, CEO of BiolineRx, met with San Francisco’s Jewish Community Federation delegates on their trip to Israel.Morris Laster, CEO of BiolineRx, an Israeli drug development company, is used to making presentations before experts, but this Monday, he was fielding questions from a veritable biotech dream team.
Organized by the San Francisco Jewish Federation’s Business Leadership Council (BLC), the group’s stop at BiolineRx was part of a trip intended to build ties between business leaders in the Bay Area and Silicon Valley, and Israel.
Their questions were quick, high-level and to the point. With no time to waste, the group moved on to visit Israeli gastroenterology success story Given Imaging. That morning, they’d already been to Yissum, the Technology Transfer Company of the Hebrew University of Jerusalem. The day before – the Weizmann Institute of Science in Rehovot. The next day – cleantech, renewable energy and electric cars in the Galilee. In short: not your average sightseeing trip of Israel.
“The group is diverse and representative of what the Bay Area has to offer Israeli biotech companies,” says Robert Blum, co-chairman of the trip’s planning committee and president and CEO of Cytokinetics, a leading US biopharmaceutical company.
Adam Berman, executive director for Curriculum Innovation at the Haas School of Business, University of California Berkeley, came on the trip out of an interest in business and learning about Israel, where he’d never been before. In drawing parallels between Israel and his home turf, he observes: “The Bay Area is an enormous innovation system. I’m wondering how Israel has also been so successful in driving innovation.”
It’s questions like these that Blum, an active lay leader at the SF Jewish Federation, wanted to answer when he and co-chair Bobby Lent, the founder of Ariba, began designing the trip a year ago.
“The goal was to bring Bay Area individuals to meet with Israelis with like interests, ideas, entrepreneurial spirit and desire to build this country, to see where there might be some opportunities for joint venturing and provide for the next level of Israel’s growth.”
“The US biotech industry is over 30 years old,” Blum points out. “The failure rate in biotech is very high and there are many more ideas than can’t be fulfilled than can be. My hope is that we can share the wisdom we bring from 30 years of experience. There’s no reason for these Israeli companies to make the same mistakes that we did, and if we’re not imparting our experience, that’s a wasted opportunity.”
Palo Alto attorney Dr. Gladys Monroy agrees. A group like the BLC can only help. “We have people who know how biotech works and are interested in Israel. And we’re not coming in from a superior point of view. We’re saying ‘we’ve made mistakes and if we can help you to not make mistakes’. That’s beneficial.”
When she ran the IP practice at Morrison & Foerster, Monroy visited her firm’s Israeli practice. This gave her an insider’s view on the local biotech industry, as does her involvement with the American Committee for the Weizmann Institute.
“You have world class biological sciences going on here. There’s an enormous amount of science that’s formed the basis for biotech companies, but somehow it’s been lagging behind the medical device practice. And if I ask ‘why’, the answer is that biotech is a long-term investment which many [Israeli] venture capitalists don’t want to make, and [Israeli] biotech doesn’t have the angel community that the Bay Area or Boston area has – people who had good fortune in biotech and then came back to form the groundwork for start-ups.”
Dr. Ronald Cape, a partner at PureTech Ventures in Boston, was a founder of genetic engineering pioneer Cetus and of the Industrial Biotechnology Association (now BIO). He has visited Israel half a dozen times in the course of his career, but only recently became actively involved with a local biotech project.
He terms Israeli technology “superb – but far from markets. However, the supply of money is beginning to get sophisticated, and there’s a supply of Israeli scientists trained in the US and wishing to return home.”
This reverse brain drain, Cape says, will be Israel’s salvation. “Thomas Friedman recently wrote a column calling brain power ‘the oil of Israel’. I haven’t found any reason to quarrel with that.”
“Israeli biotech is still very early stage but the fundamentals are really strong and there’s great brain power,” says Guy Katzav.
Although a relative newcomer to the Bay Area, having come only four and a half years ago from Israeli investment bank Investec to Lazard Freres, Katzav is an old hand when it comes to Israeli biotech.
“The VC industry in Israel focuses on technology – software, telecom, etc. It only recently got into medical devices. The VC industry here is starting to realize that biotech is different than medtech – there will be failures and it will take more money. But because there’s such great science, major companies will have to take notice,” he explains.
The gap between Israeli R&D and big pharma will be bridged, says Katzav, by VC money from outside Israel and corporate partners. “There has to be more VC money and people who understand biotech – what it takes and how long it takes – as there are in the US.”
Trips like this “are doing a great job. This is just what these people are looking for, and it gives them a great picture of what today’s Israel is all about.”