Uriel Heilman - Israel at the Forefront of Medical Innovation
Small State, Big Medicine: Israel Emerges as a Global Force in the Health Field

Small State, Big Medicine: Israel Emerges as a Global Force in the Health Field

At first glance, the Iron Dome missile-to-missile anti-rocket system that Israel first deployed in early April.late March in the western Negev Desert near Gaza would seem to have little to do with one of the most successful medical devices ever developed in the country.

But, upon closer inspection, the innovations are remarkably similar: They share the same dome-shaped top, are guided by cutting-edge electro-optical technology and were both designed by innovators from Rafael, the principal weapons development company for the Israel Defense Forces. They also share a common purpose: to save lives.

The medical device, a tiny camera embedded inside a pill capsule, has become an indispensable tool for doctors to explore the gastro-intestinal tract. Until the development of the PillCam, the only way physicians could view intestinal areas short of surgery was using an endoscope, usually via a patient’s esophagus or rear end. Aside from the obvious discomfort and the risks of bleeding or infection, endoscope probes don’t provide a great picture of some of the harder-to-reach areas of the small intestine.

With the PillCam, doctors for the first time could see these inaccessible intestinal areas, allowing them to better detect and treat illnesses like Crohn’s disease and even cancer. And all the patient had to do was swallow a pill.

The PillCam is just one of a growing number of innovative technologies coming out of Israel that are changing the way medicine is practiced worldwide.

The Jewish state is in the top five countries worldwide when it comes to patents per capita, and in recent years it has topped the list when it comes to patents per capita for medical devices. Today, there are 56 life sciences companies—covering the fields of medical devices, biotechnology and pharmaceuticals—listed on the Tel Aviv Stock Exchange, up from just two in 2006. In all, there are an estimated 1,000 life science companies in Israel, with approximately 70 new startups every year.

The PillCam was designed more than a decade ago by Gavriel Iddan, a former engineer from Rafael who applied rocket science to medicine in inventing the breakthrough contrivance.

“When he looked at a missile, he saw a lot of resemblance with what he was doing and what the capsule should be,” says Nachum (Homi) Shamir, CEO of Given Imaging, the company that makes the PillCam. “That’s really how it all started.”

The PillCam won U.S. Food and Drug Administration approval in early 2001, and Given Imaging went public later that year—becoming the first newly listed company on NASDAQ after the attacks of Sept. 11.

Over the last 10 years, some 1.5 million patients worldwide have swallowed the capsule cameras, which are excreted naturally and do not need to be salvaged because the data collected areis transmitted wirelessly. Today, the capsules can hold a tiny color video camera, a light-emitting n LED light diode, a battery and a wireless transmitter.

The PillCam is just one of a growing number of innovative technologies coming out of Israel that are changing the way medicine is practiced around the worldwide.

The Jewish state is in the top five countries worldwide when it comes to patents per capita, and in recent years it has topped the list when it comes to patents per capita for medical devices. Today, there are 56 life sciences companies—covering the fields of medical devices, biotechnology and pharmaceuticals—listed on the Tel Aviv Stock Exchange, up from just two in 2006. In all, there are an estimated 1,000 life science companies in Israel, with approximately 70 new startups every year.

“When people talk of concern for Israel’s public image, science is a case where nobody would disagree that the impact of Israeli innovation on the world is tremendous,” says Professor Daniel Zajfman, president of the Weizmann Institute of Science.

Teva Pharmaceutical Industries Ltd., Israel’s pharmaceutical powerhouse and now the world’s largest producer of generic drugs, has produced two drugs in the last few years that have revolutionized the treatment of multiple sclerosis and Parkinson’s disease. Both of the drugs, Copaxone for MS and Azilect for Parkinson’s, slow the degenerative effects of the debilitating diseases.

Medinol, a company started in Jerusalem by a former fighter pilot with a doctoratePhD in brain research, revolutionized the development of stents beginning in the mid-1990s by producing a collapsible stent that could be inserted through blood vessels and then easily erected in the appropriate place like a scaffolding. The groundbreaking stent, named the Nir NIR after an Israeli officer killed in the bungled attempt to rescue kidnapped Israeli soldier Nachshon Waxman in 1994, became the basis for the most popular drug-coated stents in the United States.

Israel has been a leader in everything from stem -cell research to in -vitro fertilization treatments for women having trouble getting pregnant to transcatheter aortic valve implantation— – which, like the Nir NIR stent, involves sliding collapsible artificial heart valves through the blood vesselarteries to avoid having to do open-heart surgery. Similarly, a company called Super Dimension superDimension recently developed a catheter thatn can probe the lung with 360-degree flexibility so doctors can to avoid cutting through the ribs to poke around in the lung.

An Israeli bandage made by a company called First Care Products Ltd. was used in the aftermath of the Jan. 8 shooting in Arizona that left killed sixeight people dead and injured 132 injured, including U.S. Rep. Gabrielle Giffords. First responders credited the unique bandage, which has a built-in applicator that applies the equivalent of 30 pounds of pressure to the wound area, for saving lives in the attack.

More innovations are in the pipeline.

Argo Medical Technologies Ltd., Aa small Israeli high-tech company, named Argo Medical Technologies recently unveiled a contraption to enable disabled people to stand, walk and even climb stairs by wearing an exoskeleton of sorts that straps onto their legs and back. Called ReWalk, it looks a little like a Robo-Cop suit.

Dune Medical Devices Ltd., a company based in Caesarea, has invented a pencil-shaped device called MarginProbe that surgeons can use in the operating room to determine whether or not skin tissue is cancerous rather than waiting for the pathologist’s analysis. This can reduce the need for follow-up surgeries, radiation and chemotherapy treatment.

“You touch a piece of tissue, and it will tell you immediately if it’s cancerous or not,” saysid Amos Goren, chairman of the company’s board and a partner at Apax Partners, an investment group with a focus on health care. The product has been approved for use in Israel and Germany and recently completed U.S. clinical trials.

These companies are not outliers. They’re part of a cascade of Israeli medical advances that have made the Jewish state a hub for medical innovation— – and a target for investors.

The Scientist magazine has ranked Israel as the best place in the world to do practice science, and Israel consistently ranks in the world’s top 15 countries when it comes to academic research. In 2010, three Israeli universities were among the top eight grantees of the European Research Council: tThe Hebrew University ofin Jerusalem, the Weizmann Institute of Science in Rechovot and the Technion – Israel Institute of Technology, located in Haifa.

Israel is the world leader in research and development as a percentage of gross domestic product, with roughly 4.5 percent of Israeli GDP devoted to R&D. By contrast, the United States comes in at about 2.5 percent.

The Jewish state is in the top five countries worldwide when it comes to patents per capita, and in recent years it has topped the list when it comes to patents per capita for medical devices. Today, there are 56 life sciences companies – covering the fields of medical devices, biotechnology and pharmaceuticals -- listed on the Tel Aviv exchange, up from just two in 2006. In all, there are an estimated 1,000 life science companies in Israel, with approximately 70 new startups every year.

“Israel has one of the most advanced pools of talent, measured in research and development, patents per capita, academic degrees and so on,” saysid Haim Shani, director general of Israeli Finance Ministry.

Then there are the Nobel Prizes. The work of Technion professor Aaron Ciechanover, who won the Nobel Prize in chemistry in 2004 for his work on the digestion of proteins, forms the basis of a broad swath of cancer research underway today. In 2009, an Israeli again won the prize: Ada Yonath, a Weizmann Institute professor whose research on the structure and function of the ribosome, the cell’s protein factoryies, has been key to developing advanced antibiotics.

“When you talk about the intellectual capital, it’s not just M.D.s and Ph.D.s,” saysid Jonathan T. Silverstein, a general partner atin New York-based OrbiMed, a health care-dedicated investment firm. “There are extraordinary people in the country.”

Why Israel?

It is often said long has been accepted wisdom that Jews make good doctors. But this is hardly sufficient to explain the outsized role that the Jewish state, population 7.4 million, has played in the area of medical innovations.

“If you look at the impact the State of Israel has, it’s way beyond the natural size of the country,” Zajfman saysid.

Morry Blumenfeld, who spent 30 years as an executive at General Electric before leaving Milwaukee 12 years ago to become managing director of GE Medical Systems in Israel, said the rate of innovative scientific activity in Israel is mind-blowing.

“One of the things that enticed me to stay here was the level of innovation I kept seeing when I was at GE,” Blumenfeld said told B’nai B’rith Magazine in a telephone interview from Jerusalem. He left GE several years ago and has since co-founded a venture capital group in Jerusalem called MediTech Partners. “It was astounding, and I’ve been involved with innovative stuff my whole career.”

There are several reasons why Israel has been especially successful in certain medical and scientific fields, particularly in the areas of medical devices, interventional cardiology, orthopedics and imaging, for several reasons.

First, there’s the culture. Located in a hostile neighborhood with no natural resources to rely upon, Israeli ingenuity has been a necessary existential ingredient for survival. It’s ingrained in the ethos. So is boldness— – what some might call chutzpah. This quality propelled Israel’s pioneers to build their country from scratch in the midst of a sea of Arabs, and it persists in Israel today.

This is not a rule-bound society marked by order and deference where success is achieved by gradually ascending the corporate ladder or status conferred by gaining acceptance into a blue-blood institution. It’s an impetuous place where rules are constantly broken and where no one wants to wait their turn.

These qualities may be annoying when you’re trying to navigate Tel Aviv traffic, but they’re key elements for innovation. They’re what spur the kind of outside-the-box thinking that can lead a weapons specialist to think he can invent something no physician has after a casual dinner conversation with a gastro-intestinal doctor, as in the case of Given Imaging’s Iddan.

It’s what enabled a group of eight guys working out of a refurbished restaurant in the dinky industrial area of the Israeli town of Or Yehuda near Tel Aviv to build their own optics lab from scratch and invent a device that allows dentists to use 3-D digital scanning to build crowns for teeth and other oral equipment without having to make molds of patients’ mouths. That company, Cadent, Inc., which was started in 2000, was sold in March for $190 million to Align Technology of San Jose, California.

It also helps that Israel is such a small place, says Apax’s Goren.

“It’s very crowded, it’s very tight, and it’s a relatively small community of people,” Goren said. “There is a very strong interaction between clinicians and engineers and scientists because they live near each other and know each other and talk to each other. In the U.S. you don’t have that interaction. You kind of have to force it to happen.”

Another reason for Israel’s unusual success in life sciences is the military factor. Most Israelis spend considerable time in the army— – the draft mandates about three years for men, two for women— – and many soldiers serve in fields where they pick up extensive technical know-how in areas they can later apply to civilian life, like engineering and medical imaging. These skills are particularly valuable for high-tech enterprises such as designing medical devices.

Likewise, Israel’s expertise in treating trauma patients, including those maimed in combat or terrorist attacks, has made Israel a leader in reconstructive orthopedics. In 2004, Hadassah Hospital became the world’s first hospital to do a computer-guided hip replacement.

Both the military and cultural explanations for Israeli ingenuity were heralded in a popular 2009 book that sought to unpack the ingredients for Israel’s extraordinary success in innovation and entrepreneurship: “Start-Up Nation: The Story of Israel’s Economic Miracle,” by Dan Senor and Saul Singer.

“When an Israeli entrepreneur has a business idea, he will start it that week,” Mark Gerson, an American investor in Israeli startups, is quoted as saying in the book. “The notion that one should accumulate credentials before launching a venture simply does not exist.”

But it’s not just about the culture.

The massive influx to Israel of Russian-speaking immigrants in the 1990s flooded the Jewish state with new scientists whose expertise has guided or influenced Israel’s scientific advances.

The design of Medinol’s groundbreaking stent was the brainchild of Russian engineer Grisha Pinchasik, who immigrated to Israel in 1990 and met Kobi Richter, the fighter pilot with the doctoratePhD, by chance one day on the street in Tel Aviv. They went on to found Medinol together.

Israeli universities were some of the main beneficiaries of the Russian aliyah, and their stepped-up investments in sciences haves made Israel a research leader.

“Young investigators that 10 to -15 years ago would never have gotten labs of their own are now getting research labs of their own,” saysid Dr. David Israeli, who spent many years in the United States working for Medtronic, one of the world’s largest medical device companies. “They’re getting opportunities from university administrators and they’re bringing in the grants.”

Israel’s universities have also established technology transfer companies to focus on transforming gains in the laboratory into commercial products.

Often, the track from research to breakthrough to successful product takes decades. In 1966, Weizmann scientists Ruth Arnon and Michael Sela were doing molecular research when they discovered they could exert some control over lesions caused by multiple sclerosis. It took another 30 years until the resulting drug, Teva’s Copaxone, hit the market.

Many in Israel hope the country’s prolific work in stem- cell research eventually will yield breakthrough therapies in diseases from diabetes to cancer. It was no accident that Christopher Reeve came to Israel to learn about stem- cell therapies in 2003, a few years after the horse-riding accident that left him paralyzed.

Over the last few years, government investment, too, has helpedbeen no small factor in boosting life sciences in Israel.

The Office of the Chief Scientist, a branch of Israel’s Ministry of Industry, Trade and Labor, supports Israeli research projects while encouraging entrepreneurs. It runs an incubator program in partnership with private companies that offers early-stage support to entrepreneurs looking to commercialize products— -- everything from office and laboratory space to professional guidance, administrative assistance and financing.

Israel has more than two dozen such incubators, each of which receive financing ranging from $350,000 over two years to $1.8 million over three years for biotech companies. The investments give the government a small stake in future revenues.

In November 2009, Israel’s fFinance and labor ministriesMinistry and Labor Ministry announced that the government would invest up to about $80 million in matching funds for science-related projects as part of a program to bring a much larger amountmore of investment into the Israeli life sciences sector.

Even the Ministry of Immigrant Absorption Ministry is getting involvedinto the act, offering Israeli scientists who have moved overseas generous tax incentives and other inducements to move back to Israel.

“In previous years it was an occupational hazard that the most talented ones were lured to good salaries and good positions at top U.S. universities,” saysid David Israeli. “Now I’m seeing more and more people coming back.”

For the Israeli government, it’s not just a matter of pride. The more successful companies there are, the more jobs, local wealth and tax dividends they generate.

Selling out, or cashing in?

The problem, some say, is that Israeli companies are selling out too early.

Rather than becoming powerhouses themselves, they are gobbled up by behemoths like Johnson & Johnson, Siemens, Philips, Medtronic, Boston Scientific and Abbot. Theose corporations’ representatives are frequently can be found in Israel mining the country for promising start-ups and innovations.

“When we look at the life sciences industry in Israel, we see it has no parallel in the entire world,” Avi Hasson, Israel’s Cchief Sscientist, boasted in April. But, he lamented, the industry is “unable to leverage its achievements to financial success. The ones who benefit from the scientific achievements of the Israeli life sciences industry are foreign and international companies that acquire Israeli innovation.”

There’s a reason for that, and it’s not just because Israelis lack patience. While Israel is a major R&D center, it’s a tiny market. Achieving success in the biggest single healthcare market in the world, the United States, takes money— – lots of it.

Once a company has a great drug or medical device, there are still many hurdles. Tthe product still must go through clinical trials, get FDA approval, and secure reimbursement approval from insurance companies. If all those obstacles are overcome, the sales and marketing efforts begins. In Europe, the same process is required, but because the market is fractured into smaller segments, each with its own regulatory process, language and culture, it takes more money for smaller payoffs.

This does not play to the strong suits of Israeli innovators.

“Some of the more laborious elements involved in biomedical product commercialization involves skill sets and a certain methodology that is not natural to many Israeli entrepreneurs,” says Jonathan Goldstein, CEO of Strata MedVentures, a consulting company that advises foreign groups investing in the Israeli health care industry. “The style and personality of entrepreneurship that Israel excels in is highly creative and non-bureaucratic. That’s not what you need when you’re managing regulation, clinical trials, and medical marketing sales cycles.”

So, when they can, Israeli inventors tend to sell. That’s also the preferred route for most investors— – venture capital funds that invest sums averaging $3 million or so into a company in the hopes of profiting on the investment within seven to7- 10 years. They don’t have the money or time for a long-term goal.

“In the main, this will continue to happen because to start distributing products takes a lot of money and potential failure, and that is huge. Better to make an alliance with someone who already has that distribution,” Blumenfeld said. “There are people that say this is a bad thing, and others that say this is a good thing because it allows people to be serial entrepreneurs. They go on and do something else new.”

Sometimes, an Israeli company will get acquired before its device has even gonemade it through clinical trials. That’s what happened when Ventor, a Netanya-based outfit working on unique heart valve technologies for the treatment of aortic valve disease, was snapped up by Medtronic for $325 million in early 2009 before it had made a single shekel.

As with the rest of the high-tech industry, the main motivator behind these innovations is money. But traditionally, that’s not how scientists have measured success. And for many in Israel, it continues to be not about the money, but about the human element, not the money.

Teva argues that it does both well., which bBy combining science, manufacturing, legal wrangling, marketing, finance and sales it has managed to become the world’s largest producer of generic drugs, argues that it does both well. The company is an exception to the Israeli rule of small firms built around R&D that leave the selling to someone else. Teva does its own marketing, and last year it had sales of did annual sales ofsold approximately $16.2 billion. At the same time, the generic drugs it produces arguably do a human good by provideing lower-cost treatments to millions of patients worldwide.

“There can be no better contribution from the Jewish community to the world,” Zajfman said of the human element. “Christians, Muslims, Jews— – we’re all using the same drugs. They cure everybody.

“We develop new ideas and give them to the world,” he said. “That’s our best asset.”


Sometimes, it’s not rocket science.

In the case of one Israeli-run nonprofit organization, the key factor in developing a groundbreaking medical innovation started with a novel idea, not new technology.

That idea took the form of a light bulb. Literally.

Actually, 10 light bulbs.

Most rural Africans live without basic infrastructure like running water and electricity. When it comes to health care, that deficiency can be deadly. Without electricity, doctors cannot staff medical clinics after dark, medicines requiring refrigeration are unavailable and pumping stations cannot access clean water.

A few years ago, Sivan Borowich Ya’ari, a staffer for the U.N. Development Program who traveled frequently to Africa, decided to do something about it.

In typical Israeli fashion, she didn’t let her age – she was still in her 20s – or her lack of organizational support stand in the way.

Starting with a health clinic in Tanzania, Ya’ari installed a basic Israeli solar panel that could produce enough energy to power a refrigerator and 10 light bulbs. Suddenly, the clinic was able to do business in the evening and stock badly needed medication for polio, yellow fever and tuberculosis.

Soon, Ya’ari had mobilized friends and friends-of-friends to fund solar panels for schools, orphanages and water pumping stations in Tanzania, Uganda and Malawi, each at a cost of about $5,000 to $10,000. In just over three years, the organization she founded, Jewish Heart for Africa, has launched 38 projects in four countries in Africa – all with Israeli technology, and most with funding from American Jews.

“In Israel they’ve been using solar energy for many years,” Ya’ari, 33, told B’nai B’rith Magazine. “Bringing Israeli innovation and knowledge to a continent like Africa makes good friends for Israel.”

When Uganda saw an outbreak of polio in September 2010 and the country needed to vaccinate 2 million children under the age of 5, the government turned to Jewish Heart for Africa for help. Over the course of three weeks, health clinics with solar-powered refrigerators from the organization administered about 65,000 doses of the polio vaccine.

“Once you install the fridge, they’re able to use the vaccines and the medicines, and they’re able to save lives,” Ya’ari said.

To keep the projects self-sustaining, each installation doubles as a cellphone charging station where Africans without electricity at home can pay to charge their mobile phones. That provides enough income to cover the cost of replacing the $150 solar batteries when they die every year or two.

Ya’ari can check in on the projects from her home in Israel thanks to a remote monitoring system invented and donated by an Israeli company called Solar Edge that alerts Ya’ari when a solar battery needs to be replaced, if someone has tried to steal the solar panels or even whether it’s raining or sunny at the site.

What makes Jewish Heart for Africa all the more remarkable is that Ya’ari has been able to pull it off on shoestring budget – about $336,000 in 2010. She credits this to a large volunteer base in New York, where the project was started, the low cost of doing business in Africa, and a minimum of bureaucracy.

“The donor gives money, and the project launches within three weeks,” she said. “It takes one to two days to install the systems.”

Ya’ari’s work has not gone unnoticed – in Israel, Africa or the United States, where she raises most her funds from Jews like her, in their 20s, 30s and 40s.

“Our mission is to help Africans, but also to help Israel’s image,” Ya’ari said. “I am always amazed by the welcome we get when we say it’s from Israel and a Jewish donation. We just want to do tikkun olam, to help and to improve the image of Israel.”

© Uriel Heilman 2012. All rights reserved.