In recent years, Israel has proven to be a hot spot for med-tech innovation. The country boasts more than 1,500 companies in the health care and life sciences sectors, roughly 70% in medical devices and digital health. More than a hundred new companies focused on medical technology launch each year.
Israel, with a health care technology market valued at $6.2 billion, according to the U.S. International Trade Association, has combined its entrepreneurial spirit with technological curiosity and savvy to create life-altering and life-saving solutions. Contributing to its strength is its interdisciplinary capabilities, which bring together medicine, clinical expertise, materials science, electronics, software expertise and engineering skills.
“Israel is an incredible powerhouse for innovation and entrepreneurship,” Maurice Ferré, chairman and CEO of Insightec Ltd., told BioWorld. “I think this is largely rooted in the culture – a fairly young country that has survived many challenges. Using technology as a catalyst for transformation permeates throughout the country, from agriculture, to energy, to health care.”
The country’s world-renowned research universities and medical centers also serve as valuable partners, contributing to the development, testing and application of novel technologies.
Tirat Carmel-based Insightec produces magnetic resonance (MR)-guided focused ultrasound equipment. The company’s Exablate Neuro incisionless neurosurgery platform is the first such device to gain U.S. FDA approval for two movement-related neurological indications – medication-refractory essential tremor in 2016 and medication-refractory tremor from Parkinson’s disease in 2018. The platform is CE-marked for both indications, as well as for neuropathic pain.
Last March, Insightec inked definitive agreements for a $150 million series F financing led by Koch Disruptive Technologies (KDT), a subsidiary of Koch Industries. The round had a post-money valuation of $1.3 billion.
Brett Chugg, managing director at KDT, saw potential in Insightec early on. “We recognized that Insightec was going to be very disruptive, with an order of magnitude better outcomes and order of magnitude lower costs for patients and health care providers,” he told BioWorld. “Insightec’s technology puts patients’ wellbeing first by disrupting the traditional approach to treating neurological diseases – like essential tremor, the most common movement disorder – that can have a significant impact on quality of life.”
In August, KDT added a second Israeli med-tech venture to its portfolio, leading a $71 million series D round in Sight Diagnostics Ltd. Based in Tel Aviv, the company makes the first direct-from fingerstick complete blood count analyzer approved by the FDA. The system’s artificial intelligence (AI) engine uses machine vision that assesses blood imagery to identify cell types and anomalies – essentially turning a sample into more than 1,000 images – at the point of care.
Israel’s innovation prowess has earned it the nickname Silicon Wadi. “In a country that is fairly low in natural resources, we have had to pursue innovation in many industries to successfully compete in the global market,” Rafi Fisher, spokesman for Orcam Technologies Ltd., told BioWorld. “While much of Israeli innovation previously focused on ‘classical’ high tech – cybersecurity, telecommunications, software development, etc. – over the last decade or so, med tech has become a focal point of Israeli innovation.”
The industry also benefits from defense-based R&D. Many startups employ former military personnel from the renowned 8200 intelligence unit, and more and more of those are finding a home in med tech, Fisher said. Orcam itself boasts a team of nearly 200 experts focused solely on assistive technology development for people with various physical impairments.
Orcam harnesses highly advanced AI-driven computer vision and machine learning to provide increased independence to people who are blind or visually impaired, have reading challenges or hearing loss. The finger-size Orcam Myeye device affixes to eyeglasses and communicates elements of the visual world, such as printed or digital text and currency, to the user via near real-time audio. It also recognizes faces, products and colors.
To date, Orcam has raised $130.4 million. The company is planning for a pre-IPO funding round sometime in 2021, Fischer said.
The sector has also seen some big IPOs. That was evidenced by the $625.2 million raised by medical imaging startup Nano X Imaging Ltd. (Nanox) in its August public debut. The company’s low-cost Nanox.Arc is a “full-body, multipurpose, tomosynthesis X-ray system that we believe is capable, once approved by the applicable regulatory bodies, of delivering medical imaging for a wide range of clinical procedures, inside and outside of hospitals and larger imaging centers,” Ran Poliakine, Nanox’s founder and CEO, told BioWorld, noting the company has contracted deployments of 5,150 systems with nine service providers in 13 countries, contingent upon regulatory approvals. Additionally, Nanox has inked agreements aimed at deploying another 5,500 units in the U.S., South Korea and Vietnam, using its managed software as a service (MSaaS) business model.
The technology is derived from field emission display technology that was originally developed by Sony.
Nanox is awaiting a decision on its 510(k) submission to the FDA for a single-source version of Nanox.Arc and plans to file an application for a multi-source version by mid-2021. Efforts to obtain CE marking are also underway.
“Our goal is to globally deploy 15,000 Nanox.Arc units by the end of 2024,” Poliakine said.
More success stories
Meanwhile, numerous other ventures are solidifying Israel’s reputation as a med-tech hot spot, some of them leading to major collaborations.
Rehovot, Israel-based Todos Medical Ltd. is developing blood tests for the early detection of cancer and neurodegenerative diseases using Fourier-transform infrared spectroscopy. Last year, it announced plans to apply the technology in diagnosing infections, including COVID-19.
Another example is Haifa-based Bluewind Medical Ltd., which has built the Renova Istim implantable neuromodulation system for the treatment of overactive bladder, a problem that affects an estimated 20% of people worldwide. The company is enrolling patients in the U.S. and Europe in a pivotal trial.
In December, Zebra Medical Vision Ltd., of Shefayim, won FDA clearance for Healthpoint, an AI solution to extract bone measurements from X-ray scans. The tool is intended to aid in planning orthopedic surgical procedures.
Also last month, Emedgene Technologies Ltd., of Tel Aviv, unveiled a nonexclusive partnership with San Diego-based Illumina Inc. and the integration of automated interpretation into Illumina’s Trusight Software Suite for rare genetic diseases. The company’s Clinical Rare Disease application is one of a line of AI-powered applications for high-throughput genomic interpretation across clinical and research use cases.
And Envizion Medical Ltd., which has developed electromagnetic fields-guided feeding tube placement technology, reported in September that it was partnering with a major U.S. hospital chain to bring the FDA-cleared Envue navigation device to 150 hospitals nationwide to help meet demand during the coronavirus pandemic.
One of the technological sources for electromagnetic navigation is based on knowledge and devices sourced from the Israeli army, Envision CEO Doron Besser told BioWorld. “Add highly experienced investors, accumulated experience and a supportive government, you get the perfect recipe!” he wrote.
All are examples of promising Israeli startups that could help to reduce the country’s dependence on imported medical devices. Helping to move med-tech innovation forward is an array of accelerators, incubators and government-funded programs.
Adi Jacobson, vice president of marketing at Zebra Medical Vision, said incubators and accelerators are a valuable source of services, tools and funding for startups. They play “an important role in ‘sipping’ out the best concepts from the sea of young Israeli startups and give them an early days edge,” he wrote in an email. “If you look closely at those startups who succeeded in growing to profitable companies, you’ll see that a strong visionary founding team and a product fit to a real market pain point is common to them all, which accelerators bet on in an early stage.”
“Israel is a great testbed for new and upcoming innovations: It has a population with high consumption of health services, it’s healthcare system is relatively concentrated (with 4 HMOs serving most of the country, so decisions are taken in a centralized fashion,” Einat Metzer, CEO and co-founder of Emedgene, told BioWorld. “The cultural mindset stresses the importance of being at the forefront of progress, and so decision-makers would always have an interest in getting the latest and greatest in any field of medicine. This means that health care entrepreneurs have relatively easy access to explore their concepts and perform early validation.”
Israel’s concentrated health care system also helps to support rapid innovation. “Most people stick with their HMO from cradle to grave, giving each HMO tremendous access to patient date,” Fisher said. “All of this data is recorded by each HMO’s completely interoperable electronic health record system.”
This rich trove of patient data contributes both to Israeli innovators’ ability to rapidly develop AI- and machine learning-based solutions and the ease with which they can be rolled out.
“We absolutely see other opportunities for investing in Israeli med-tech ventures,” said KDT’s Chugg. “If you look at what’s going on right now with the coronavirus pandemic, it has exposed many weaknesses to our health care system and shows how much opportunity there is to improve in terms of quality of care, reducing costs, or both.”