Medical Device Daily Israel Editor

At the Biomed Conference last month, a number of prominent players in the U.S. med-tech world were represented by their senior executives. Medical Device Daily thought that it might be of interest to hear the views of these personalities regarding Israeli companies – mainly startups – that seem to be grabbing the attention of many multinationals. MDD shares the perspectives of a few of the thousands of guests at Biomed, people who have insights and experiences that might be of value to our readers.

Alfred Mann, founder of MannKind (Valencia, California) started his speech to a packed audience in the Tel Aviv auditorium: "Before I came here, I drafted a letter that I will be sending to Mr. Obama on my return. In that note, I express my concern that the entrepreneurism and human energy that I used to see in the U.S. 20-30 years ago is declining rapidly. We are going to be overtaken in innovation by China, India and Israel. After my latest trip to Israel, I am convinced that Israel will be high up on that list. I have been to Israel ten times, and every time I come here I see very capable people, with enthusiasm and good quality education. It reminds me of the U.S. of the 80s and 90s."

Mann's own background as an engineer, as well as one of the most accomplished medical device entrepreneurs, enables him to speak in a language that others might consider irreverent. His $8 billion of value generated from sales of 9 companies to the devices industry – including Minimed to Medtronic (Minneapolis) for $3.4 billion, and Advanced Bionics to Boston Scientific (Natick, Massachusetts) for $750 million – had not reduced the shine of this unique individual. Within the past decade, the octogenarian has created an impressive set of relationships with senior groups in Israel: a 24% holding in Teuza Venture Capital (Haifa, Israel); a merger in 2008 of his company Bioness (Valencia, California) with Israeli company Ness (Raanana, Israel) in the field of neuromuscular electrostimulation ; and most notably his $100 million injection the Alfred Mann Institute at the Technion (AMIT, Haifa, Israel), a product development program collaboration with the Technion (Haifa, Israel) which became operational in 2007. With this latter project, the University creates IP, and AMIT is the investment vehicle to develop the technology. "We have already licensed 4 technologies, and created our first company from this relationship. With regards to Haifa's Technion, it is a truly outstanding institution that I have known for many years – Israel's MIT, I would say – I am considering expanding my $100 million investment to $200 million."

Mann has learned a lot about Israel in the recent years. He singled out the Israeli government in its positive role in the med-tech industry. "I have learned about a very smart set of very effective government grants: a brilliant use of funds to help companies grow in this small country. With a tiny economy in comparison to a standard world player, the successful collaboration between industry and government allows Israel to play in a game outside its own league, on the world scene."

Avi Kerbs, an old friend of Mann and Teuza VC CEO, told MDD that he is not surprised with what Al says about Israel; he and Al Mann together continue to seek new projects in which to invest.

Mann also spoke at the Biomed conference about his companies, Mannkind and Second Sight (Sylmar, California). There was a deep-seated emotional desire here for development, improvement and success that made Mann more than a successful businessman. MDD asked Mann what was this drive that was integral to his success. "Passion," he said. "Passion – it's vital," and he concluded, "Without passion, what is there?"

One of the most packed lectures at the Biomed Conference was that of Michael Mussallem, chairman/CEO of Edwards Lifesciences (Irvine, California), a leader in the science of heart valves and hemodynamic monitoring. Edwards has a significant involvement in Israel to date: It conducted a $155 million acquisition in 2004, of Israel's Percutaneous Valve Technologies (PVT, Cesaria, Israel), a leader in the innovative, catheter-based (percutaneous) aortic heart valve replacement field. More recently, it has closed a more modest collaboration agreement with Collplant (Ness Ziona, Israel) towards using their unique collagen technology for a couple of applications in the heart valve business.

Mussallem sees Israel not only as an innovation center, but also as a prime site to develop and improve products and ideas. In an exclusive with MDD, Mussallem said that "as soon as we acquired PVT, we maintained the R&D in place in Israel, and only after the First-in-Man stage did we advance the technology to the main market – the U.S." Given the potential of the PVT team, Edwards developed its Israeli unit into a hub for many of its creative developments. "We not only continue the PVT new-generation valve work in Israel," he added, "we also bring new ideas to this R&D office in order to help refine concepts, build prototypes, perform preclinical models and tests, and take concepts through to the clinical stage." The Israeli environment has also benefitted greatly, he told MDD. "We have doubled the Israeli workforce since we purchased the company. In the case of validation and testing protocols, we have even taken some of our Israeli team's systems and introduced them to our U.S. centers."

In his lecture, he emphasized the importance of recognizing the differences in culture and approach between his U.S. teams and his Israeli group. "We rapidly became aware of the more direct approach that Israeli engineering teams have when discussing innovation and projects; perhaps it has many benefits, but it does not always blend with accepted U.S. approaches and etiquette. One of our Israeli engineers presented an idea to our expert Israel team, and they sat down and clearly explained why it would fail. Now they were probably right . . . but if that discussion had been in one of our U.S. facilities, we might have needed more HR support for that poor individual whose approach had been torn to pieces!"

When asked about Israeli centers as clinical sites, Mussallem mentioned that Edwards has limited experience with clinical work in Israel, but "we are being advised by many of our experts that we should consider Israel in this regard. I feel that we will be doing this soon."

In terms of seeking other initiatives in Israel, Mussallem acknowledged that his Israeli office is very much involved in scouting for projects and companies in his specific fields. "As a company, Edwards is very focused, and our future lines of play are somewhat more structured than some larger medical device players."

His message from the Biomed conference floor to Israel's entrepreneurs: "Never lose your entrepreneurial spirit. It is worth so much."

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