TEL AVIV, Israel ¿ Clal Biotechnology Industries and its co-investors committed $100 million to biotechnology companies in the hope of ¿initiating a new cycle in the Israeli biotech industry,¿ said David Haselkorn, CEO.

Clal is structured as a company, not a fund. This single source would nearly double the total investment in the Israeli biotech sector in 1998, estimated at about $55 million. The Clal-led group has already put $10 million into D-Pharm, $15 million into Compugen and $2.5 million into NeuroSurvival Technologies.

One major impediment to the success of biotechnology in Israel is that no major multinational pharmaceutical giants have established research and development centers, similar to those created by American information technology corporations (such as Intel and Motorola) in the 1980s, to jump-start the information and communication technology industries. These are even more essential to the success of biotechnology, with its lengthy clinical trials and complex approval procedures.

The suggestion to solicit big pharmaceutical companies¿ support came out of a report by Ilan Koziatin, commissioned by the Ministry of Industry and Trade, on the creation of a National Development Plan for Biotechnology, which Koziatin described as ¿offering a long-term perspective that would best access and aid the biotechnology sector,¿ and give some ¿if/then¿ scenarios for the industry.

The Ministry of Industry and Trade¿s chief scientist, Orna Berry, who is notably supportive of biotechnology, has commissioned a study of the sector from the Monitor Group, a consultancy headquartered in Cambridge, Mass., with a branch in Israel.

Haselkorn, who was managing director of Biotechnology General Corp. in Rehovot, is not optimistic about attracting major drug companies. The problem is that they cannot advertise their connection with Israel for political-economic reasons, he said. ¿The documentation for new drugs has to state very clearly where they were developed and tested, and a drug identified with Israel would be precluded from selling in Muslim countries, such as Indonesia, Malaysia, as well as the entire Arab bloc,¿ he said

Haselkorn suggested an alternative: to ¿develop very unique and innovative platform technologies or drugs in Israel, [so] that the need met by them and market demand would overwhelm any political obstacles, making it worthwhile for the world pharmaceutical giants to create some strategic partnering as a means to considerably increase mutual value.¿ Thus, Israeli companies could retain more rights and benefits from their intellectual property by selling finished products or technological processes, rather than selling out.

Haselkorn anticipates larger investments in fewer companies. In January 1999, Clal made a joint investment of $2.5 million in NST, a biotech start-up in Petah Tikva that is focused on the key steps to control and delay apoptosis, or programmed cell death, which is central to the onset of most degenerative conditions such as Parkinson¿s disease, Alzheimer¿s disease, and cancer.