The Office of the Chief Scientist at the Ministry of Science and Technology and the Ministry of Finance announced the establishment of a government-backed biotechnology fund

The goal of the fund is to promote and encourage the growth of the Israeli biotechnology industry. The fund, in the form of a venture capital fund to finance biotech companies, will raise NIS 750-1000 million of which the Israeli government will invest NIS 250 million

The Office of the Chief Scientist at the Ministry of Taxation and the Ministry of Finance announced last weekend the establishment of a government-backed biotechnology fund. The fund will focus on making investments in the biotechnology industry with the aim of promoting companies operating in this field in Israel. The state will provide the fund with a total amount of NIS 250 million: the government sources of funding will be NIS 125 million from the chief scientist's budget and NIS 125 million from treasury sources, with the expectation that the government's investment will be leveraged by private investors and will be multiplied two to three times, so that the fund will be with a total size of about a billion NIS. In each investment, the government will share its profits with the partners in the fund, and will provide protection against risk. In addition, the royalties collected from the successful projects will be poured back into the fund.

The Office of the Chief Scientist at the Ministry of Health and Welfare stated that the fund will be managed by a professional management body with management experience in the field of biotech, which will be selected by the state as part of a local and foreign tender process. The governing body will be independent in the management of the fund and its decisions, subject to the policy established by the government.

The distribution of the fund's investment avenues will mainly be in investing in the field of bio-pharma, while the rest of the fund will finance projects in the field of medical devices.

The process of establishing the fund began about two years ago, following discussions that took place in the Ministry of Finance and the Ministry of Finance, which included, among other things, in-depth examinations of the biotechnology industry in Israel and its business and commercial potential in the current state of the financial market. These tests ultimately led to the ministries' recognition of the need to remove barriers in Israel to investments in biotechnology companies, and to bring about the exploitation of the enormous potential inherent in this industry.

The Office of the Chief Scientist at TMT also notes that Israel is among the leaders in the world in the number of patents approved by the US Patent Office in the field of biopharma. Israel's leadership is expressed both in the academic aspect and in the industrial aspect, of creativity and new ideas in the field, which fail to reach late stages of development and implementation due to the lack of funding sources. Indeed, more and more companies are reaching an advanced clinical stage, but most of the potential is still unrealized.

• Israeli universities are in a prominent position in the scope of US patent approvals.
• 8.5% of the patents registered in Israel are in the field of biotechnology.
• There is a large number of R&D companies in the field of biotechnology.
• Some of the companies established within the technological incubators program are in the field of biotechnology.
• A large number of PhD graduates in fields relevant to the biotechnology industry.
• In Israel, there is a high-quality human resource whose full potential is not possible due to the lack of proper employment, and therefore a large number of researchers leave the country.

Due to the nature of the investment, which is characterized by a long development period and a high level of risk, the local venture capital funds, and institutional and other investors, refrain from investing in companies in the field of biotechnology. The necessity of this risk capital fund to bridge the failure and the gaps in financing in order to bring about the growth of the economy, which will result from the particularly large expected return in this field.
The Minister of Trade and Industry, Binyamin (Fouad) Ben Eliezer, welcomed the statement and emphasized the great importance of the fund for strengthening a knowledge-intensive industry, in which Israel has a unique advantage in the world thanks to the human capital invested in it. The fund will result in the preservation of this capital in Israel, and will result in an increase in the employment rate, in particular among academics who have graduated in the life sciences. In addition, Minister Ben Eliezer noted that since the life sciences industries are export-oriented industries, the fund's activities will contribute, among other things, to improving Israel's balance of payments, to attracting additional investments in Israeli industry, as well as to the continued functioning of the biotechnology industry in the future as a growth engine, when in the world, an industry is growing It has been at a great pace for many years.
The chief scientist, Dr. Eli Ofer, said that the declaration of intent document is the first step in establishing the fund, the result of a process that began several years ago. The essence of this phase was to raise awareness, mainly among the government but also among other public bodies, regarding the structural problems in the financial and employment markets, which prevent the growth and flourishing of biotechnology companies in Israel, and to convince them of the importance of establishing the fund. In these days, of approving the state budget for the next two years, with all the difficulties involved, the fact that 250 million NIS of the state's funds are allocated to the development of an industry with a valuable human resource, and that its development and prosperity are essential to the growth of the entire economy, is of enormous importance.