What Makes Israel's Life Sciences Ecosystem Successful?

Israel's biotech sector has been considered secondary to its thriving Medtech field for decades. Still, the turn of millennia brought a significant shift to the biotech landscape in the country.

Part of the growth originates from Israel’s focus on building a solid education with roughly 6% of GDP being spent on this sector. Israeli biotech field caught the attention of pharma giants and other corporations, such as Pfizer, GE, Johnson & Johnson, and more, to build R&D centers and startup incubators in the country. During the COVID-19 pandemic, Israel was among the fastest to vaccinate its population due to data-sharing deals between the Israeli government and Pfizer.

Nowadays, biotechnology is one of the most dominant sectors in the country, with life science companies raising nearly $7 billion in the last decade on the NASDAQ. Garnering recognition on a global scale, helping other countries solve their problems, and cultivating innovation within its borders have propelled Israel to the center of biotech, and this is just the beginning. So let us take a look at the current state of the Israeli biopharma field and explore some of its recent events.

As mentioned before, Israel draws the particular interest of large pharmaceutical corporations. Last year four of them - Pfizer, AstraZeneca, Teva, and Merck KGaA - backed an Israeli startup incubator looking to wield artificial intelligence (AI) in the discovery and development of new drugs. In September 2022, they announced the launch of their first company. An alliance of global pharma and technology leaders and investors, AION labs is now raising the curtain on OMEC.AI, a venture tasked with employing machine learning to help predict the success of potential drug candidates in human trials. OMEC.AI aims to build a next-generation computational platform that can both identify hidden safety liabilities and lack of efficacy for drug candidates and suggest experiments to close the identified gaps. In addition to funding, support, and mentorship, AION Labs and its pharma partners will provide OMEC.AI with pharmaceutical data for model training and advanced machine learning development.

In 2017 American pharma giant Pfizer teamed up with an Israeli startup CytoReason to use the company’s AI-powered platform and disease models for its drug discovery and development work. The firm, which was founded only a year before this collaboration, has developed a platform that takes in real-world data from pharmaceutical partners and then uses that information to construct tissue- and cell-specific models that simulate individual diseases. The company’s machine learning algorithms can then be used to explore those models and highlight differences between various patient groups and treatments, potentially identifying more practical routes of attack for new drug candidates. And in September 2022, Pfizer announced an extension of its collaboration with CytoReason for the next five years that could bring the company around $110 M of investments. This funding will be used to develop high-resolution AI-driven models of even more diseases, supporting Pfizer’s development of drugs for immune-mediated and immuno-oncology diseases.

The development of cell therapies is a highly complex process relying on skilled manual labor. The Israeli startup Adva Biotechnology, founded in 2016, aims to use automation, optical sensing, and AI to remove the manual component from the process. ADVA X equipment developed by the company uses sensors and artificial intelligence to handle the fine adjustments that are often required when growing cells, such as monitoring and tweaking levels of nutrients in the cell culture medium. According to Adva, the kit can culture up to 20 billion cells in the same chamber and can grow CAR-T cells, natural killer (NK) cells, exosomes, and viruses.

Another remarkable representative of Israel’s biotech field is Anima Biotech, the company advancing a novel platform for discovering selective small molecule mRNA drugs and their mechanisms of action mRNA Lightning. Since the company's founding in 2014, mRNA lightning has been the subject of partnerships with Takeda and Eli Lilly, amounting to more than $1.12 billion. The platform helps overcome the common barriers in traditional drug design, having the potential to elucidate new therapies for previously “undruggable” diseases across 18 different discovery programs in various therapeutic areas. In July 2022, the company announced the achievement of a milestone in its collaboration with Takeda related to one of the two newly initiated programs as part of the multi-target collaboration. This achievement entitles Anima to an undisclosed milestone payment.

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The growth of the Israeli biotech sector is empowered by several funds and startup accelerators fueled by governmental solid support. The Ministry of Innovation, Science and Technology defined bioresilience as one of the top 5 priorities in Israeli R&D.

Hilla Haddad Chmelnik, Director-General of the Ministry of Innovation, Science, and Technology, noted:

"Israel’s scientific-technological leadership is critical for its civil resilience, and it is imperative that we sustain and strengthen it. Mapping and defining the national priority areas, based on an understanding of the international arena, as well as the relative local scientific advantages is crucial for strengthening the various sectors of the economy that are based on innovation and advanced technologies"

Israel Biotech fund, the Rehovot-based country’s central biotech hub, invests exclusively in Israeli and Israel-related biopharma companies developing drugs. The biotechnology industry in Israel is growing with enormous potential, and the company aims to realize the full potential and actual value of the sector. IBF is now hosted by companies from various fields in their portfolio, from oncology (Ayala Pharmaceuticals, Biond biologics) to cell therapy (Gamida cell) and metabolic (Peles Therapeutics). Another organization supporting biotech startups in Israel is Start-Up Nation Central, aiming to boost them by providing business and investment opportunities, data, and insights along with networking events to foster collaboration.

With its thriving biotech startup scene stemming from vital education, governmental support, and investments from big pharma corporations, Israel remains a crucial region to watch in the global biotech industry.

The above mini-review is a small part of Israel's Life Science ecosystem. To delve deep into Israel's drug discovery and biotech market, with its opportunities and challenges, contact us to learn more about strategy consulting services and market reports: info@biopharmatrend.com.