The Israeli Life Science Industry is young, growing and exuberant. Of the existing 898 companies, more than 70% were founded during the last decade. A closer look reveals that more than one third of the Industry was established in the last five years. Figure 1 depicts the trend and growth experienced by the industry in the 1998-2007, period. 246 companies were established prior to 1998, with the oldest one, Teva Pharmaceutical, founded in 1901. From 1998 to 2002, the industry experienced significant annual growth equaling 19%. In total, the industry grew by an additional 319 companies in the 1998-2002 period. In the past five years, industry growth has remained stable with approximately 75 new companies, annually. Please note that data regarding the companies established in 2007 is incomplete. Altogether, the industry experienced a 14% compounded annual growth in the decade of 1998-2007.
Figure 1
The Israeli Life Science Industry
Number of Companies Founded
Source: ILSI Database 2007
Companies Developmental Stage
72% of the companies were created within the last decade. Yet, 31% or 284 companies are revenue generating entities. Of those, 178 companies are mature and were created prior to 1998. More impressive is the fact that 21 companies or 7% of all revenue producing companies were established within the last five years. Approximately 39% of the life science industry or 347 companies are at the seed stage, 11% or 102 companies are at the preclinical stage and 127 or 14% of the companies are at the clinical stage.
Figure 2
Companies Developmental Stage
Source: ILSI Database – 2007
Industry Areas of Focus
The Israeli industry focus is on unique opportunities of major diseases for which existing therapies are largely ineffective. Thus many Israeli companies are working on treatments for cardiovascular and peripheral vascular disease (109 companies), oncology (57), neurodegenerative disease (44), and other age related diseases such as ophthalmic (28) and orthopedic (37) (see Figure 3).
Figure 3
Main Medical Fields
Number of Companies (439 Total)
Source: ILSI Database – 2007
Israel’s Life Sciences Industry - Sectors
The Israeli Life Science Industry is heavily biased towards the medical device sector, with 500 companies or 55% of the total. Biotech is the second largest sector with 184 companies or 21% and Pharmaceutical is the third with 109 companies or 12% of all life science companies operated in Israel (see Figure 4). Presently, AG-biotech is poorly represented in the database with only 26 companies or 3% of the total.
Figure 4
Israel’s Life Sciences Industry - Sectors
Source: ILSI Database – 2007
Medical Device
The largest sub sector in the medical device arena is the one containing therapeutic devices, both implantable and disposable. The latter comprises 40% of the total medical device body of companies, followed by medical equipment, diagnostic, imaging and monitoring companies contributing 12%, 11%, 9% and 7%, respectively (see Figure 5).
Figure 5
Israel’s Medical Device Companies - Subsectors
Source: ILSI Database – 2007
The devices developed are concentrated in several main areas of which cardiovascular is the leading one with 84 companies or 20%, followed by internal and general health (9%) and Orthopedics with 31 companies or 7%. Figure 6 depicts the various medical applications. The medical device companies focus their product offering in over 20 applications. The leading ones being; cardiology, gynecology, oncology, neurology and neurodegenerative disease, ophthalmology and orthopedic. A smaller number of companies focus on medical fields such as endocrinology, wound management and infectious diseases.
Figure 6
Medical Device Sector - Applications
Source: ILSI Database – 2007
Biotechnology
The biotechnology sector is the second largest with 184 companies. The sector is fluid with new companies being established and old one being abandoned. Of the universe of 184, 55 companies, or 30% of total are
revenue generating. It is interesting to note that most are selling diagnostic kits or research equipment. 64 companies or 35% are in the seed
stage, 33 companies in preclinical stage (18%) and 20 companies in
clinical stage (11%).
Figure 7 depicts Israel's biotech companies categorized by sub sectors. Diagnostic kits and Tissue Engineering & Cell Therapy are the largest subsectors with 23 companies or 17% of the total biotech sector each. Bioinformatics/Drug Discovery comprise 24 companies or 15% total.
Figure 7
Israel’s Biotech Companies - Subsectors
Source: ILSI Database – 2007
Pharmaceutical
Pharmaceutical is the third sector with 109 companies. Although smaller in number of companies, it is by far the largest and most established sector in the Israeli Life sciences industry. It is the largest revenue producer with 28 companies such as Teva, Agis, Taro and Dexcel Pharma, which are also the largest employers in the Israeli industry. These companies are generally mature and focus their business on generic drugs. Concurrently, 78 pharmaceutical companies are younger and small with less than 10 employees.
Although Israel’s Pharma companies are well known for their generic drug emphasis, 25% of the sector is involved in the development of “New Chemical Entity (NCE)”. Several others are involved in the development of drug delivery and vaccines while others are focusing on the development of new drugs using natural compounds (see Figure 8).
Figure 8
Israel’s Pharma Companies - Subsectors
Source: ILSI Database – 2007
AgBiotech
Israel’s agriculture research is a major success story dating to 1909 when Aaron Aaronson discovered the wild ancestor of domestic wheat. Agriculture and scientific developments have produced increasingly sophisticated and efficient agriculture systems with considerable economic impacts. Israel began with an agriculture – dominated economy largely based on citrus exports. Today, Israel’s agriculture biotech related products and research fall into the following categories:
Replacing usage of toxic pesticides that endanger both man and the environment by biological control
Developing plants with desired characteristics based on molecular genetic technology
Developing poultry and farm animals vaccines
As mentioned earlier this description is incomplete due to the small and potentially non-representative database of 26 companies.
Patents
Israel’s patent position is very strong and impressive:
Israel’s total number of granted patents in the medical device area positions it in first place, worldwide in patents per capita and number seven in absolute number of patents (see Figure 9). Moreover, the number of medical device granted patents increased at a compounded annual growth rate of 20% during the years 1999-2003, placing Israel number three globally after Taiwan (1ST) and United Kingdom (2nd). This high growth rate is indicative of the innovative activity in the Israeli medical device field (see Figure 10).
Israel’s total number of granted patents in the biopharma field puts it in fourth place worldwide in patents per capita and number 12 in absolute number of biopharma patents (see Figure 11)
Israel’s total number of Life Science patents as percent of total patents written by Israeli inventors, places the country in first place worldwide (see Figure 12)
