BioWorld International Correspondent
ZICHRON YAAKOV, Israel - On a local and national level, biotechnology appears to be coming into its own, nurtured by well-intended and well-heeled investors.
One endeavor, the Jerusalem Biotechnology Center (JBC), which officially opened in December, is modeled after the American venture lease structure, "to serve the needs of Israel's fast-growing biotechnology industry, and especially to enable early stage companies to obtain immediate access to fully equipped lab and office space," said JBC Chairman Daniel Chain, who is CEO of Mindset BioPharmaceuticals Ltd.
Mindset, which has a platform technology for central nervous system gene therapy, has relocated into the JBC and initiating funding for the endeavor of more than $500,000.
"From a tenant-leasee perspective, the JBC provides ease of entry into a working space, and per-usage availability of sophisticated facilities that a small company needs on a part-time basis, and might not be able to afford," said Paul Bendheim, executive vice president of Mindset. "Through the venture lease, we can also preserve capital that would not be possible otherwise."
About 26 percent of the funds invested will be matched by the Jerusalem Development Authority.
"They want to create economic growth and see the enormous potential for the numerous life scientists in Israel in this effort, hoping to make Jerusalem a center of biotech companies," said Adrian Harel, CEO of JBC.
JBC's 5,000 square meters is in a newly built complex in the Har Hotzvim Technology Park near the Hebrew University of Jerusalem and the Hadassah Medical Organization. The center currently is undertaking a private placement of $7 million to expand and develop the facility, estimating that approximately $10 million is needed over the initial five years of operation.
"We hope to enable young companies to advance in their R&D programs without the cost and delay involved in raising funds and building sophisticated facilities of their own," Harel said.
Israel is particularly rich in start-ups fueled by the investment and venture capital funds targeting biotechnology, such as Tel Aviv-based Clal Biotechnology Industries and Medica Ltd., each having allocated more than $100 million to biotechnology.
Three companies already have agreed to join JBC and are in final stages of negotiation to enter into the venture-lease agreement.
Harel told BioWorld International, "In addition to independent operational laboratories, companies gain access to shared supporting research and animal facilities as well as to on-site specialists in business development, preclinical, clinical, regulatory, patent and legal issues, on a fee-for-service basis."
He contrasted the JBC model with that developed by Jerusalem Global in its Innovation Centers (for medical devices, etc.), and the private incubator of Max Herzberg's Eager-BioGroup in Ashdod, which is based on a clustering approach focusing on specialized areas, currently cardiovascular disease and alternative drug delivery systems. He also noted the problems for biotechnology of the incubators in the National Technology Incubator Program under the Office of the Chief Scientist of the Ministry of Industry & Trade.
"None of the 23 government incubators was designed with the physical or developmental needs of biotechnology in mind," Harel said. "JBC is not limiting these scientists by time or facilities. After spending last week in the U.S., I was amazed that over 80 percent of the venture-lease companies are successful, growing to 30 to 50 staff, self-supported by their own sales."
In the meantime, private industry is coming to the fore for government-sponsored biotechnology. A consortium of Israeli biotechnology companies, including Compugen Ltd., Interpharm Ltd. and Biotechnology General Ltd., are offering to finance three of seven academic biotechnology centers, contingent on the Ministry of Industry and Trade (MoIT) co-contributing. The offer was made Dec. 17 by Michel Revel, the chairman of the National Biotechnology Steering Committee, after the Ministry of Science, Sport, and Culture said it could not afford the $4.5 million a year to operate the seven centers.
Revel said that by law MoIT couldn't finance the centers without contributions from the private sector. The centers are dedicated to human genome research, bioinformatics and proteomics. Revel added that he is trying to obtain funding from the Agriculture Ministry for genetic research on plants.
These state-supported biotechnology centers serve as labs and transition centers for basic academic and industrial research.
"We hope to achieve cooperation between the ministries," Revel said, referring to the "historic mistake" of linking sports and science together, since the Science Ministry gets just 3 percent of the entire budget of the joint portfolio.
The chief scientist of the MoIT, Carmel Vernia, said it is looking into funding the neglected centers.