Considerable increase in demand for workers in the field of pharmaceuticals and medical equipment

This is according to a survey prepared for Biomed 2008 * The field of life sciences is the field in which 53% of the incubator companies are engaged * Second article in the series for the conference

By Nirit Weiss and Nahum Donitza

Big risk

Ziv Segal, an analyst for many financial entities, including Easy Forex and CIBC, recognizes a temporary weakness in the health and biotech sectors, but reiterates that investing in health, and especially in biotech, are, in his opinion, a cornerstone for any investment portfolio for the coming years. "We are talking about many industries: pharmaceuticals, biotech, diagnostics, research and more, and there are definitely a variety of investment options there."

Compared to Segal, Reuven Covent, CEO of Dan & Bradstreet, is a bit more pessimistic when he mainly refers to the 40 biotechnology companies traded in the United Nations. "When many companies record negative returns, the investment in the industry raises doubts. The review conducted by the company's economists shows that the biotech companies traded on the Tel Aviv Stock Exchange lost a total of NIS 2007 million in the first half of 330. "The data shows the great risk of companies in the biotech field," says Covent. "Few will succeed in reaching a final product that is financially justified." According to Ronit Harel Ben Zeev, who commented on the issue, when it comes to biotechnology, a slightly different point of view should be adopted: "The degree of success of biotechnology companies should be measured in the long term", and she is optimistic. "It is true that the funding that bio companies raise is high risk, but it is also high chance. It has a contribution to the growth of the economy and fueling the Israeli high-tech engine."

And new players have also joined the heating up arena: the venture capital fund Vitalife announced at the end of February 2008 its intention to invest about 180 million dollars in Israeli biotech companies. The new fund - SCPVitalife - will invest in medical technologies, medical device companies, diagnostic and imaging companies and biometric identification companies and is planning a total of 15-20 investments. According to Jeff Dean, a partner in the fund, Israel has the presence of large technology companies alongside the development centers of global companies, therefore entrepreneurs come from large organizations and know the commercial and technological side of establishing a start-up.

Increase investment in R&D

Dr. Eli Ofer, the chief scientist at the Ministry of Science and Technology, sees research and development as the main resource of the industry. "In order to maintain our status, we must strive and fight to constantly find ourselves at the top end of the value chain of research, development and innovation. "The State of Israel has great centers of excellence in academia, broad and deep knowledge on many subjects and an entrepreneurial spirit. If we work to increase investment in R&D, and advance the main directions, we can make the country an industrial and economic leader in the fields of biotechnology and traditional industry, similar to the high-tech sector." Dr. Ofer sees as one of the main directions in which to act the cultivation of the biotechnology and nanotechnology branches as preferred sectors with extremely high economic growth potential which cannot be attracted without massive assistance from the state. "We must understand that the real comparative advantage of the State of Israel in these future issues is in R&D and innovation," says Dr. Ofer.

A review and segmentation of the projects according to fields of activity, which operated in 2007 as part of the technological incubators (about 200 existing projects and another 74 new projects that joined in 2007), reveals that about 58% of the projects are in the fields of life sciences (23% in the fields of communication and information technologies, 13 % in the fields of environmental quality, agriculture and materials and 6% in the fields of electronics, machinery and miscellaneous).

Companies that started their journey in the incubator raised 2007 million dollars in 435, an increase of 74% compared to the amount of investment in these companies in 2006. It also appears that over the years, since the establishment of the incubator program in 1993 until the end of 2007, the private sector has invested about 2 billion dollars in companies that have graduated from the incubator. Among the 50 companies that graduated from the incubators in 2007 (which completed a two-year period in which they operated in the incubator with the support of the chief scientist's budgets), approximately 64% found continued funding. These companies raised a total of 75 million dollars.

In 2007, the amount raised was spread over a larger number of transactions, with each company raising a small amount. The most prominent transaction in Hamma was the sale of Ramon Medical, which started in Hamma Niyot, for $80 million with the potential for royalties of up to $300 million. The balance, the $355 million, was divided between companies that raised or sold for lower amounts.

A survey conducted by the placement company JobInfo, which examined the demand for senior employees in 2007 in the Israeli high-tech industry, shows stability with relatively moderate increases, but the company's CEO sees one exception: life sciences. "Despite the slowdown in the US, we expect that in 2008 the demand for workers will increase mainly in the field of life sciences and biotech. According to her, the many capital raisings made in the field of life sciences during 2007 will be reflected in the increase in the number of jobs in this market during 2008.

An increase in venture capital investments

In 2007, US venture capital investors invested $29.4 billion in 3,813 transactions, the highest annual level of investment since 2001. This is according to PwC's MoneyTree report. This is a 10.8% increase in monetary terms and a 5% increase in the number of transactions, compared to 2006. In the fourth quarter of 2007, approximately $7 billion was invested in 963 transactions. Most of the increase in venture capital investments can be attributed to the records recorded in the level of investments in the cleantech and life sciences sectors, as well as in Internet-oriented companies.

Start-up and early-stage companies raised more money in 2007, but late-stage companies recorded the most significant increase this year. At the same time, the initial investments reached the highest level in six years, when venture capital investors put their money in more initial investments, which were invested in companies from different sectors.

According to a PwC report, the life sciences (biotechnology and medical devices) sector recorded an all-time high in 2007, with $9.1 billion invested in 862 deals, compared to $7.6 billion invested in 786 deals in 2006. While two The fields registered a double-digit growth compared to the previous year, after all, the field of medical devices registered the most significant increase, with an increase of 40%. This year, the life sciences sector accounted for 31% of total investments, an all-time high. In addition, the life sciences sector maintained its position as the leading sector for 2007.

An analysis by the San Jose Mercury News, which is published in the USA and specializes in "Silicon Valley investors", shows that "despite the rise of the new star, the cleantech sector, which offers investment and conscience in one package, the biomed does not lose its power as an investment attractor and today's funds pay high amounts than ever before for young companies". This trend of biomed strengthening is expected to continue, say the analysts of the respected newspaper - as long as the laws of supply and demand work in favor of the sector. According to the newspaper, the funds believe that the major innovations will come from completely new areas, such as personalized medicine in biogenetics, stem cells and the structured development of medicines.

Commercialization of university biomed discoveries and inventions in Israel - 2007

"The research conducted at universities is driven by curiosity and the search for scientific discoveries and new insights that may advance the human race," says Dr. Yehuda Niv, CEO of Ramot Lid Tel Aviv University Ltd., the university's commercialization company. "Discoveries and insights that have immediate use can be patented, and these constitute intellectual property that can be commercially realized."

In order to commercialize intellectual property, the universities established units whose job it is to find a way to turn patents into products for the common good. The university commercialization units are trying to locate business entities that will purchase licenses to use the patents produced by the academy, and will develop the technological ideas into salable products. The licensee, to whom the patent gives a limited monopoly in the market, sells the products and pays license fees and royalties to the patentee.

The commercialization units of the universities in Israel are among the world's leaders in the commercialization of academic intellectual property, all thanks to the rich intellectual property and the many years of professional and systematic work in the process of locating the potential franchisee and closing the licensing deal. Among the top dozen academic institutions in the world in terms of revenue from the commercialization of intellectual property can be found the Weizmann Institute of Science in Rehovot, through its implementation company "Knowledge Research and Development Company", as well as the Hebrew University of Jerusalem through the company "Research and Development Research and Development Company Implementation of the Hebrew University of Jerusalem".

Commercialization of technologies in the field of medicine, biotechnology and medical devices is a major part of the activities of all application companies in Israel, including "Ramot near Tel Aviv University", "Technion Institute for Research and Development", "Bar-Ilan Company for Research and Development" and "B.G. Negev". As an example, out of 26 commercialization agreements signed by "Ramot near Tel Aviv University" in 2007, 10 were commercialization agreements for pharmaceuticals, biotechnology and agricultural products and 5 agreements in the field of medical devices, diagnostics and research products. 67% of these biomed agreements were made with foreign companies, and 33% with Israeli companies, where 3 agreements were made with start-up companies established for the purpose of utilizing the technology created by the Academy.

The well-known Israeli successes in the commercialization of bio-med technologies include the drugs "Copaxon" and "Rabif" for multiple sclerosis and the drug "Arbitox" for cancer from the Weizmann Institute of Science, and the drug "Exalon" for the treatment of Alzheimer's disease, the drug "Doxyl" for the treatment of cancer and Tomatoes from the Hebrew University. In the development pipeline of the companies around the world that have purchased licenses for Israeli academic technologies are many additional products, including five innovative solutions for Alzheimer's disease from Tel Aviv University, various treatments for diseases of the central nervous system, metabolic diseases, cancer, pain and more. To get a picture of the scope of activity of a university implementation company in the field of commercialization of innovative technologies, let's take as an example the activity of the company "Ramot near Tel Aviv University": out of 26 commercialization agreements signed by the company in 2007, 10 were commercialization agreements for pharmaceuticals, biotechnology and agricultural products , 6 agreements in the field of medical devices, diagnostics and research products, 7 agreements were registered in the fields of engineering and information technologies and 3 in materials and energy. 58% of these agreements were made with foreign companies, and 42% with Israeli companies, where 6 agreements (23%) were made with the start-up companies established for the purpose of utilizing the technology to create the academy.

Two Israeli technologies developed at Tel Aviv University and commercialized by Ramot were recently selected for the list of the 100 hottest innovations in the world, successfully passed during 2007 by the Academy for Commercial Application.

The "A Better World" report by the International Organization for the Commercialization of University Technology (AUTM) revealed the 100 successful technologies that were 'born' in the corridors of academia and turned into commercial products and applications, among which are two Israeli technologies: in the field of fighting Alzheimer's disease and in the field of fighting infectious diseases. For comparison, countries such as Sweden, the Netherlands and Taiwan appear in the distinguished list with only one university and with one technological development. AUTM is a global umbrella organization, which currently includes technology managers, CEOs and heads of institutions from 45 countries, who are responsible for commercializing university technologies around the world.

The innovative technology for the treatment of Alzheimer's disease was developed by a team of researchers led by Prof. Ehud Gazit from the George S. Wise at Tel Aviv University and was licensed to the German Meraz Pharmaceuticals by Ramot. The exclusive and worldwide license agreement included payment of license fees, milestone payments and payment of royalties on future sales.

The technology in the field of viruses was developed by Prof. Michael Ovadia from the George S. Faculty of Life Sciences. Wise at Tel Aviv University and licensed by Ramot to Frutarom Industries Ltd. The technology includes unique knowledge, protected by a patent application, for the production of an innovative cinnamon extract with antiviral activity. In a comprehensive study carried out in Prof. Ovadia's laboratory, the extract's ability to quickly neutralize the activity of a wide variety of viruses that cause infectious diseases, in humans and animals, such as: human and bird flu (Influenza), the herpes virus (HSV-1) and the AIDS virus the acquired immune system, HIV-1).

These and other technologies from the academic seminary may mature in the coming years into products for the public benefit, which will lead to a "better world".

25% increase in demand for experienced workers

A survey conducted by the placement company Nisha, ahead of the "ILSI-Biomed Israel 2008" week, reveals that the medical equipment market continues to grow: over the past year there was a 25% increase in demand for experienced workers. The demand is in all fields when biomedical engineers without experience manage to integrate into companies at a respectable salary, 10-16K. In the other professions, experience in the field of medical devices is still required. The salary of all employees in the field of medical devices increased between 20%-30% during the last year.

The signs of recession are not evident in the field, since the market also targets countries such as Europe and the Far East. According to Lizzie Shub-London, a partner and manager at the Niche Biotech company, "the hope in the medical device market is that the situation in the US will not affect it in a significant way." Hot areas that stood out in the medical device industry are the fields of aesthetics, gastro, obesity, diabetes and cardiology.

In the biotechnology industry the picture is different: the job market includes only experienced people. Bachelor's degree holders with no experience will find work in propaganda and sales only, with an average salary of 6K (including car and cell phone). There are no jobs in research for those with advanced degrees without industry experience. In contrast, there is a shortage of experienced workers from biotechnology or pharmaceutical companies. The main shortage is evident in biochemists and professionals in the field of quality assurance, regulation and clinic. The most noticeable shortage is in marketing and sales people, business development and CEOs who have experience working with international pharmaceutical companies with proven results.

A survey conducted by the placement company Jobinfo, which specializes in biomed and high-tech, especially in preparation for the "ILSI-Biomed Israel 2007" week, reveals that from the data of the first quarter of 2008, there is an increase in demand for workers with experience in the biomed industry: chemists, biologists (with advanced degrees) and engineers chemistry. Also, there is an increase in demand for a variety of jobs in the field of clinical trials, including trial managers, regulatory personnel, CRA, clinical application engineers and employees with patent experience. This growth is seen both in the medical device companies and in the pharmaceutical companies.

"These data can be explained by the fact that many companies that have been engaged in development in recent years have finished the initial development stages and are now moving to the experimental stages," says Ilana Achimair, CEO of Jobinfo. "Throughout the past year, many funds have been invested by various venture capital funds in the Clean Tech field, we expect that this trend will affect the increase in job demand in the field in the coming years," concludes Achimair.

The positions open today in the biomed market for those with bachelor's degrees in biotechnology, chemistry, biology and materials engineering, focus on: promotion, quality assurance, process engineering and junior research assistants in laboratories.

Holders of advanced degrees integrate into various research positions in the major pharmaceutical companies and new start-up companies. In addition, there is a noticeable increase in demand for biomedical engineers for both development positions and clinical application positions. Algorithm development jobs are also opening up, recently, to those with advanced degrees in biomedicine.

However, an opposite trend is evident in the market among those with advanced degrees in biology, who have gained many years of research experience in academia and have had no experience working in industry at all. The main consequence of this is the flight of brains from academia in Israel to the US due to the paucity of career opportunities for this population.