It started life when the founder identified an unmet need in diagnostics. Now Israeli life science company Novamed is planning a spending spree – to buy up American companies and technologies.



A blank check to spend – Novamed CEO Emil Katz is hunting for good US diagnostic technologies.

A privately owned Israeli life science company is about to take the US medical diagnostics market by storm. Jerusalem-based Novamed has set its sights on buying up American technologies and companies.

“I have been given a blank check to spend in order to expand our product platform,” says Novamed CEO Emil Katz, explaining the company’s bold new business strategy. It was put into place by Novamed’s strategic partner, the Riverside Company, which has already invested about $10 million in Novamed, which in the mid-’90s started developing products that improve diagnostic efficiency and levels of sterility.

Riverside, a global investment group headquartered in the US with more than $3 billion in assets, chose to partner with Novamed two years ago because it recognized the company’s potential to replicate and multiply in international markets the success it has achieved in Israel. Novamed is slated to open an office on the American East Coast in the coming months.

“Our goal is to achieve overall sales of $50 million over the next five years by integrating synergistic technologies and companies into our product platform,” says Katz, who is also hoping to move production lines to Israel. “I’d like to see our Israel staff size grow substantially to a workforce of about 250,” he tells ISRAEL21c.

The start of Novamed’s success story goes back to 1995 when Katz, a Weizmann Institute graduate with a PhD in immunology and microbiology, spotted unmet needs in Israeli hospitals and medical clinics and identified those areas where he felt he could maintain a competitive edge. Katz founded Novamed to develop products that improve diagnostic efficiency and levels of sterility.

Even simple urine tests prone to contamination

“At the time, medical organizations did many diagnostic tests using materials produced in their own labs,” recalls Katz, pointing out that many of those tests were inefficient and lacked quality control. “I analyzed the steps involved in doing something as straightforward as a urine test and it was clear that there was a high risk of the specimen spilling or being contaminated.”

Katz also analyzed the competition. “International manufacturers like Siemens and Kodak were starting to produce a new generation of products using automated robotic systems that it would be hard to compete against, but some diagnostics products based on microbiology cultures have a short shelf-life and need to be manufactured locally. Others can’t be automated and require human processing,” he says.

Focusing on these areas, one of Katz’s first inventions was a user-friendly and contamination-free urine test container known as the Uricup. The product was a runaway success and today the company produces more than four million units a year. The original knowhow came along with the acquisition of a previously existing company, EldanTech which was the basis for Novamed.

The Uricup was soon joined by other innovative products which vastly reduce the time required to detect bacterial, fungal or viral infections. Novamed now markets more than 100 products, many of which are also exported to the US and Europe. The company workforce includes a staff of 60, engaged in research, development, manufacturing and sales and includes five specialists with doctoral degrees. Its products are used in health care; veterinary services; the pharmaceutical and cosmetics industries; the food and especially dairy industries; agriculture and biotechnology.

From diagnosing bacteria to predicting a stroke

Katz has lately turned his attention to medical situations for which there are no existing diagnostic products. The inspiration for one of those products – a test to indicate risk of stroke – came as the result of a tragic occurrence.

“One of our employees died from a heart attack. It turned out that like a lot of other stroke victims the chain of events that led to his death began with pains that he experienced and he was unsure about how serious they were. Instead of rushing to the Emergency Room he waited until it was too late,” Katz tells ISRAEL21c.

To help prevent deaths of this kind in the future, Katz has devised an easy-to-use diagnostic test that can be self-administered at home. “It’s a simple blood prick with an indicator giving an immediate response,” he explains.
Novamed has already conducted a preliminary clinical study on 100 patients at Israel’s Wolfson Hospital. The study results demonstrate that the patented device can accurately indicate risk of stroke.

An American company is collaborating with Novamed to develop this product and has begun the process of obtaining FDA regulatory and marketing approval in the US.

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