BioWorld International Correspondent

ZICHRON YA'AKOV, Israel - Chief Scientist Eli Opper will preferentially implement the highest levels of support and financing for biotechnology, following the recommendations of the Ministry of Industry, Trade and Labor research committee.

Life sciences section head and biotechnology evaluator Ora Dar told BioWorld International, "This well-considered decision is the result of deliberations that have been going on for months."

Dar explained that the heads of four sections (life sciences, systems and two communications sections) agreed to the decision to give preference to biotechnology and nanotechnology.

Some of the benefits to grantees are: approval of support for two years (compared with one year for other R&D projects) upon meeting milestones set by the research committee; full 50 percent funding; and 66 percent depreciation in the first year of R&D support for new equipment that costs more than NIS100,000 (US$20,000) deemed essential to fulfill the program.

Opper said that he hoped the committee's decision and other actions will help Israel stay in the technology race, and will be an important signal to investors and the economy that the lack of resources in those fields is "precisely the situation that justifies special government intervention."

The move partly was influenced by the decision of Serono SA to close the local InterPharm Laboratories but also took into consideration the relative difficulty foreign biotechnology companies have raising capital for R&D centers in Israel, a situation that Opper hoped would change.

The decision comes against a background of an announced budget increase by NIS300 million in 2005, NIS400 million in 2006, and NIS600 million from 2007 onward, with the aim to support high-risk projects deemed high return, while asking large and medium-sized companies to pay higher royalties on success.

That will bring the 2005 R&D budget to NIS1.2 billion (compared with NIS1.3 billion in 2004, and NIS1.8 billion in 2001), and to NIS1.8 billion in 2007, to take advantage of global high-tech recovery and international competition in technology with the hope of attracting R&D investment.

One compromise granted to the Finance Ministry was to continue to streamline and privatize technology incubators, which might adversely affect early stage biotechnology and life sciences, said one industry commentator, but also would allow the chief scientist to focus support on successful incubators that are backed by venture capital funds, and to encourage other private initiatives.