Medical equipment manufacturer Boston Scientific may invest up to $100 million in Israeli startups.Intel, Microsoft, IBM, Motorola, Texas Instruments, Siemens. All the top global information technology players have had a long and successful history of conducting research and/or manufacturing in Israel, playing a critical role in Israel’s high-tech boom in the 1990s. But where are health care players Merck, Bristol-Myers Squibb and GlaxoSmithKline when Israel’s biotechnology industry needs them?

The answer is they aren’t there yet, but the first signs of their imminent arrival can be detected. The past year has seen a flurry of activity that finally may lead to multinational pharmaceutical companies investing in Israeli startups. And it couldn’t come at a more critical time, as the biotech revolution, set off by the Human Genome Project, is creating new opportunities for Israel’s estimated 160 life science startups.

“Companies are coming, but not en masse,” said Ron Bentsur, director of investor relations at Keryx, a Jerusalem biotech company traded on the Nasdaq. “A select group of companies have come, and in all fairness, they seem to be aggressive in setting up meetings and seeking out specific areas of interest.”

If Israel’s biotech industry is looking beyond its borders, a big reason stems from a tender awarded at the end of May by the Industry and Trade Ministry’s Office of the Chief Scientist for the right to operate two biotechnology incubators. The first winner, the RAD Bioscience group, which will set up shop in Jerusalem, counts among its backers U.S. investment banks Piper Jaffray and Unterberg, and the Scientia Health Group, a U.S. biotech incubator.

Members of the second winning consortium, which will operate an incubator at the Rabin Science Park in Rehovot near the Weizmann Institute, include Genzyme, the fourth-largest American biotechnology company, and MPM Capital, a global firm that manages two venture capital funds that invest in health care and biotechnology.

“We view this (incubator) as a source for screening the market and looking for new opportunities at a stage that we would not have looked at otherwise,” said Oved Amichai, scientific director of Genzyme Israel. “We believe there are interesting things going on in Israel.”

The extent of international interest in Israeli biotech is also clear when examining the two consortia that lost the tender. One is Max Herzberg’s Eager Biogroup, whose members include the international drug company Aventis, France’s Institut Pasteur, LCF Rothschild, as well as Israel’s Wertheimer and Morris Kahn groups. The other group on the short end of the tender was the Lapid Biotechnologies consortium, headed by Teva Pharmaceuticals, which included the United States’ Johnson & Johnson as well as Israeli venture capital funds Pitango and Giza.

The tender is seen as an encouraging development for an industry that has struggled to raise money overseas and earn respect for nearly 20 years.

“This venture is bringing together a significant number of parties – both in Israel and abroad – leaders in their fields, who will cooperate for the benefit of the portfolio companies,” said Aharon Schwartz, vice president of strategic business planning and new ventures at Teva Pharmaceuticals. “This is a new and unique opportunity.”

The success in attracting foreign investors, both strategic and financial, was not simply a case of good luck. The tender rules favored big, well-heeled investors, and included demands such as a six-year commitment to operate the incubator, proven managerial and scientific capability, and $20 million in equity.

Projects accepted by the incubators will be allowed to stay three years, and each will receive up to $1.8 million in financing. The chief scientist also ensured that consortium members would be able to lock up projects for themselves.

“It gives a nice edge to the initiative, and if anything, it will act as a catalyst to spur other corporations to come forward and invest,” said Avi Molcho, Giza’s managing director. “The combination of venture capital funds working with pharmaceutical corporations guarantees the right balance in selecting promising projects that are competitive and marketable.”

“In addition, the involvement of prestigious players, such as Genzyme, can increase the chances of drawing additional investments into early-stage projects in biotechnology across the board,” Molcho said.

Boston Scientific, one of the world’s largest medical equipment companies, with annual sales of over $3 billion, already has opened an office in Israel, and has invested in four local companies – Medinol, which developed the Nir stent – a device for widening the artery wall and allowing blood flow to resume freely; Medical Enterprise, which develops technology to heat cells with microwave radiation; SightLine Technologies; and Vitalife Life Sciences Fund, which invests in private life sciences companies.

Boston Scientific’s Chief Financial Officer Lawrence C. Best estimates the company could ultimately invest $100 million in Israel based on its potential in the life sciences sector.

“There are not many countries that he says this about outside of the U.S. and Japan,” said Doron Debi, Boston Scientific Israel’s general manager.