Innovations roguin.27112014

Israel: Modelo de innovación biomédica
Ariel Roguin MD PhD
Head, Interventional Cardiology
Rambam Medical Center,
B. Rappaport - Faculty of Medicine
Technion - Israel Institute of Technology
Haifa 31096 ISRAEL Mobile
aroguin@technion.ac.il

WAZE navigation
Google 2013: 1,200,000 Million US$

 El modelo Israelí,
 Como se trabaja allí
 Como se ha llegado a conseguir ese nivel
de superespecialización en innovación,
 La relación de los médicos con la gestión
de i+I+D [investigacion, desarrollo e
innovacion tecnologica]

5
Israel Facts and Figures
Israel
HAIFA
Established 1948
Area: 22,072 km2
ES:504,645 km2 [X23]
Density: 387/km2
ES: 92/km2 [X4]
Population ~8 millions
ES: ~48 millions [X6]
Unemployment: 6%
ES: ~25% [X4]
GDP per capita 38,000 US$
ES: 33,000 US$
GDP growth 3.3%
ES: 2%
Natural resources. 0
Security challenges ++++

• No. 1 in patent / capital
• 750 life science companies
• 7.1 million people = Silicon Valley
• 20 x less investment money
• Second generation entrepreneurs
• Tenacious spirit, focus, and chaos
Israel and Innovations in Life Science

Major Israeli Medical Innovations
 Teva Industry
• Copaxon, Azilect
 Stents
• InStent, BeStent, Nir, Express,
InspireMD and more
 Biosense
• Revolutionized EP
 Given Imaging
• Revolutionized GI diagnosis
 Ventor
• Novel Transapical Medtronic Valve
Haifa
Yokneam

Major Israeli Medical Innovations
Multislice CT angiographay [Elscint, Picker, Marconi, Philips]
MRI imaging [GE R&D] [investigacion, desarrollo]
Echocardiography 3D and strain [GE ultasound]
Hybrid CT/SPECT [GE Nuclear]

Health System in Israel
• Medical insurance plan is obligatory.
• All entitled to basic health care as a fundamental right.
• In a survey of 48 countries in 2013, Israel's health system was ranked
fourth in the world in terms of efficiency.

• In 2011 there were 3.3 practicing physicians per 1000 population in Israel
or 25,300 practicing physicians.
• Almost all employed by the government or HMO – fixed salary!
• Five university medical schools.
• 25 General hospitals with ER [all with CCUs], in 23 cath labs with 24/7
service for Primary PCI.

• In 2011 there were 3.3 practicing physicians per 1000 population in Israel
or 25,300 practicing physicians.
• Almost all employed by the government or HMO – fixed salary!
• Five university medical schools.
• 25 General hospitals with ER [all with CCUs], in 23 cath labs with 24/7
service for Primary PCI.
• Most senior physician are also affiliated with one of the 5 universities:
Beer Sheva, Haifa [Technion], Jerusalem, Tel Aviv, Zefat [Bar Ilan].
• No protected time for academy.

Ariel Roguin MD PhD
Head, Interventional Cardiology
Rambam Medical Center,
B. Rappaport - Faculty of Medicine
Technion - Israel Institute of Technology
Haifa 31096 ISRAEL
aroguin@technion.ac.il

18
Maimonides / the RAMBAM
Nació en Córdoba (España), 1138 –
Médico, rabino, filósofo y teólogo judío
de al-Ándalus de la Edad Media.
Estatua de Maimónides en Córdoba, España.

Innovations in Israel- patents
Source: USPTO

Innovation climate in Israel
Scientists & Technicians per 10,000 Workers
140
83 80
60
55 55
45 43
33 33 32
25
0
20
40
60
80
100
120
140
Israel US Japan Germany Canada Switzerland Taiwan UK Ireland Italy Singapore Spain

 Julio came to the US to pursue academic career.
 Initial attempts- Make a stent with Radio Shack copper wire
and soldering materials.
 Funds: turned down by a number of companies
 Schatz and Palmaz joined entrepreneur Phillip Romano, who
provided seed money to create a company.
 Up to 1986, Palmaz, Schatz, and Romano were turned down by
virtually everyone.
 Vision and support came eventually through (J&J).

DNA for Israel High Tech Success:

Money for start up medical company
 University
 Institution/hospital
 Chief Scientist
 Incubator
 Venture Capital
 Device Company
 Private [your own]
 Angel – private investor

Fudan 201030
30
Haifa
Tel Aviv
Universities in Israel
Beer Sheva
Technion
University of Haifa
Ben Gurion University
Tel Aviv University
Bar Ilan University
Weizmann Institute
Hebrew University
of Jerusalem
Jerusalem
Rehovot

Synergy for Success
Haifa Bay Area
Rambam Medical Center
Technion, Israel Institute of
Technology
University of Haifa
Rappaport Faculty of Medicine
Rappaport Institute for Medical
Research Technion
MATAM High Tech

Synergy for Success
MATAM High Tech

Technion faculty member
Patent
Company InStent [Private sponsership]
Animal experiments in Technion
Approval for human use
Rambam - Human FIM

Synergy for Success
Haifa Bay Area
Technion, Israel Institute of
Technology
Rappaport Faculty of Medicine
Rappaport Institute for Medical
Research Technion
MATAM High Tech

 Inspire MD
 Patented
 Private investors
 Venture Capital Investment
 NYSE stock

 Stages in Development
◦ Founded in Haifa(1993)
◦ Idea, technology
development, preclinical
studies, Initial human
studies (1995)
◦ Private investor
◦ Acquired by J&J (1998)
500 million US$
◦ Mapping and ablation
strategies for complex
arrhythmias and AF
Shlomo Ben Haim,
Founder

Electro anatomic Mapping
BioSense- Cordis
Industry with Strong
University Involvement

Trans femoral
Trans
apical
Transcatheter AVR
PVT- Edwards Engineering
by Israeli industry
Clinical studies in France
Sapien AV
Medtronic
CoreValve

TAVI image based analysis:
Perpendicular Projection Selection
 Each point along the curve is perpendicular to the aortic
annulus direction
 Minimizes errors in positioning
+ =

Coronary Application
CRT-D application

Angio-CT Hybrid Imaging
• Founded by the government – chief scientist
• And PHILLIPS
• CT coronary reconstruction
Government
funded
Patented
IP

prox. LAD
Stenosis due to large plaque with calcified core
Virtual IVUS
feature shows
clearly plaque &
lumen

How is it that Israel:
• a country of 7.1 million people,
• only sixty years old,
• surrounded by enemies,
• in a constant state of war since its founding,
• with no natural resources
produces more start-up companies than large, peaceful, and
stable nations like Japan, China, India, Korea, Canada, and the
United Kingdom?"

DNA for Israel High Tech Success
• Mandatory military service
• Immigration

3 years for Boys
2 years for Girls

Israel Defense Forces
• Leadership and management skills at very early age
• More mature persons
• IDF culture “learn and correct”
• IDF service provides potential entrepreneurs with the opportunities
to develop a wide array of skills and contacts.

Israel Defense Forces
• Leadership and management skills at very early age
• More mature persons
• IDF culture “learn and correct”
• IDF service provides potential entrepreneurs with the opportunities
to develop a wide array of skills and contacts.
• responsibility in a relatively un-hierarchical environment where
creativity and intelligence are highly valued.
• IDF soldiers have minimal guidance from the top, and are expected
to improvise, even if this means breaking some rules.
• If you're a junior officer, you call your higher-ups by their first
names, and if you see them doing something wrong, you say so.
• Neither ranks nor ages matter much "when taxi drivers can
command millionaires and 23-year-olds can train their uncles.

Medicine Studies in Israel
Military Service -> Medicine
Medicine [atuda] -> Doctor in the army for 5
years as officer with multiple responsibilities

Immigration
• 9 out of 10 Jewish Israelis today are immigrants or
descendants of immigrants the first or second generation.
• Since 1990, 1 million immigrants mainly from Soviet union.
• Many hard working engineers.
• In 2014: 1 in 4 academic position speaks Russian.
• This specific demographic, causing fragmentation of
community that still continues in the country, is nevertheless
a great incentive to try their luck, to take risks because
immigrants have nothing to lose.

• Israelis think “out of the box”

How did Israel become a High tech success?

71
Phases in Israel’s economic development
1948-1968 Agriculture
• Export mainly agriculture
•Building the science based capabilities:
- Technion 1924
- Hebrew University 1925
- Weitzman Institute 1934
•Innovations and entrepreneurship in Agriculture
(Kibbutz) and the Defense area

72
1969-1992 [Self support market]
• Arms embargo after six day war in 1967
• Army R&D and “atudaim”
• Building defense-industry-university complex
- 65% of R&D defense related
- Defense as % of GDP grew to 25% in 1980
- Indigenous industry for planes, tanks, electronics warfare
• Spin-offs from defense e.g. Elscint, Scitex, Orbitech
• Multinationals entering Israel (e.g. Intel, Motorola)
• Due to historical labor-socialist tradition deep antagonism toward
individual entrepreneurship
• Establishment of Office of Chief Scientist in 1968

73
1992-2010: take-off high-tech sector
• Yozma, a government initiative in 1993 jump-started VC
availability by leveraging (foreign) risk capital with
government investment fund
• Between 1993-2005 about 80 VC’s raised $ 13,2 bln.
• Numerous government programs to bridge gap between
ideas and first VC investment and to compensate for
market failures

74
Converging factors acting as tipping point for
sustainable hi-tech growth in Israel during the 90’s
VC/PE raised in
Mln dollars
average per year
New High-Tech
Companies
average per year
77From 1969- 1992
1,214307From 1993-2005

Agriculture Nation
Defense and security Nation
High Tech Nation
Tourism Nation
Israel – key phases
?

KEY POINTS
• Established R&D Centers (investigacion, desarrollo)
• Venture Capital
Investments by venture capital funds constitute an added value above financial
contributions - in management, world market familiarity, strategic guidance and
economic credibility.
• Government Support of R&D Expenses
The Chief Scientist of the Ministry of Industry, Trade and Labor offers conditional
R&D grants of up to 50% of approved R&D programs. If successful the developers
are obligated to pay back royalties, up to the amount of the grant.
DNA for Israel High Tech Success

Expenditure on R&D
(as % of GDP,2008)
Source: Ministry of Finance

Unemployment Rate
(harmonized, 2009)
Source: Ministry of Finance

Government Support
• Competitive government assistance for R&D projects
• Tax holidays for up to 10 years for foreign investors
• The reform law for the Encouragement of Capital Investment
will simplify bureaucratic processes related to the approval of
investments through the establishment of a "green lane".
• In addition a "Strategic Track" will offer multinational
companies significant benefits.

Supportive Business Environment
• Worldwide taxation and customs treaties
• Protection of trademarks, patents and intellectual property of
all kinds
• Comprehensive legal protection of foreign companies

Government Reforms
• Liberalization of foreign currency
• Deregulation of foreign trade
• Privatization of government companies

Privatization
• The privatization process began in 1986 and was
accelerated in 1997
• During this time 82 companies have ceased to
be state owned
• 2003:National airline El-Al begins privatization
• From 1986- 2002 $8.6 billion was raised through
privatization

Trade Agreements
• Membership in world organizations: GATT (since 1962), WTO
(since 1995) and an active part in OECD
• Israel has free trade agreements with:
EU (25) EFTA (4) Romania
US Mexico Bulgaria
Canada Turkey

Joint R&D Foundations
• BIRDF – with the U.S.
• USISTC – US-Israel Science and Technology Commission
• BRITECH - with Britain
• CIIRDF – with Canada
• KORIL-RDF – with Korea
• SIIRD – with Singapore
• FRANCE
• GERMANY
• ITALY
• SWEDEN

92
Chief Scientist
Activities in Israel International Activities
R&D Fund Bi-National Funds
Magnet Programs U.S-Israel Science &
Technology Commission
Tnufa BI-National Agreements
Technological Incubators EUREKA
Seed Fund
European Union Programs
Office of the Chief Scientist
Generic R&D
Research Institutes Global Enterprise R&D
Cooperation
Grants: $ 400 mln; Royalty Income: $ 150 mln.

Technological Incubator Projects
23
200
735
54%
technological incubators operate
projects operate currently
projects have left the incubators in the last decade
have received further private investment

Incentives for R&D Centers
National Priority Zone A
National Priority Zone B
Central Israel
Tax relief program: “Cost +”
Three priority areas: A, B, C
Area C
Center of Israel
Area B
preferred regions
of Israel
Area A
most preferred
regions of Israel
2 years - tax
exemption
6 years - tax
exemption
10 years - tax
exemption
8 years – only
10% taxes
4 years – only
10% taxes

Grant Program Priority Zone A Priority Zone B Priority Zone C
Tax Exemption 2 Years Not Applicable Not Applicable
Reduced Company Tax
Israeli Investors 5 Years 7 Years Not Applicable
Foreign Inventors 8 Years 10 Years Not Applicable
Grant Benefit Path
Grant Rates
for Fixed Asset
Priority Zone A Priority Zone B Central Israel
Industrial Projects
(Up to 140M NIS)
24% 10%
Industrial Projects
(Above 140M NIS)
20% 10% Not Applicable
Fixed asset benefit level pending zone
Tax Benefit

Tax Exemption Path
Tax Program Priority Zone A Priority Zone B Priority Zone C
Tax Exemption 10 Years 6 Years 2 Years
Reduced Company Tax
Israeli Investors Not Applicable 1 Year 5 Years
Foreign Inventors Not Applicable 4 Years 8 Years

International Centers for R&D
About 60 foreign R&D centers are located in Israel
AND MORE…

Tax Benefits Table (in %)
Tax Benefit Example
Not an
Approved
Enterprise
Approved Enterprise
Percent of Enterprise owned by Foreign Investors
0-49% 49-74% 74-90% 90-100%
Taxable Income 100 100 100 100 100
Company Tax 34 25 20 15 10%
Balance 66 75 80 85 90
Dividend Tax Percentage 25 25 20 15 10
Dividend Tax 16.5 11.25 12 12.75 13.5
Total Tax on Distributed
income
50.5 36.25 32 27.75 23.5

Fudan 2010100
100
Haifa
Herzliya
Tel Aviv
Jerusalem
Yakum
Multinationals in Israel
Rehovot
Kiryat Gat
Yokneam
Outside of healthcare, multinationals with
significant activity in Israel include:
Over 110 foreign companies have established R&D centers in
Israel, collectively employing over 35,000. Source: Invest in Israel

101
Israel as R&D base
Employment in Foreign R&D Corp.
As a Share of Total Employment in R&D Companies
Source: OECD
4%
3%
5%5%5%
9%9%
6%
5%
19%
17%
15%
20%20%
44%
43%
46%
45%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2002 2003 2004 2005 2003 2004 2002 2003 2004 2001 2002 2003 2004 2000 2001 2002 2000 2001
Israel UK Sweden Italy France Finland

102
102
The Israel Case
since the 90’s growth driven by high-tech sector
University of Haifa
Tel-Aviv University
Bar-Ilan University
The Hebrew University of Jerusalem
Ben-Gurion University
Technion
Weizmann Institute of Science
100 km
• 24 incubators
• over 3000 start-ups
• over 80 VC/PE’s
• 63 companies on Nasdaq
• leading multinationals
• matured Israeli high tech
ECO system
Israel (2009)
7.4 Mln inhabitants (in 1948: 0.8 Mln)
GDP $ 204 Bln
GDP per capita
$ 27k

103
The Office of the Chief Scientist Incubator program
• 28 incubators between 1990-1993 (still operating 23)
• Most incubators now privatized
• 1000 companies started in incubator and 45% after a
two years incubator period, attracted follow up financing
• The program has helped to legitimatize tech-
entrepreneurship and lowered entry barriers by
funding and managerial, expert support

gMPS System
gMPS Sensor
2-D / 3-D “Map” and sensor
position
Low power
magnetic field
The MediGuide gMPS System
Technion Incubator
300 million US$ in 2008

Excellent Human Resources
• Highly educated workforce
• A multilingual population with cultural, historic and business
ties to almost every other nation
• Over 1 million highly educated immigrants from the former
Soviet Union since 1989
• 275 engineers per 10,000 employees

Fudan 2010107
Human Capital -
Israel’s Biggest Asset
Percent with academic degrees (ages 25-64)
Source: the ministry of finance
0
30
60
90
120
150
0%
5%
10%
15%
20%
25%
26% in Science&Engineering

Excellent Human Resources II
• Well established and strong academic infrastructure
• An outstanding entrepreneurial spirit
• Success stories breed success. Everyone wants to be an
ICQ, WAZE or Medinol
• Highly trained graduates of the Israel Defense Forces have
turned cutting edge defense technology into civilian
applications.
Israel leads in encryption software, a by-product
of it’s military industry, as are so many
technologies in which it excels.
“Forbes” June 2002

Modern Infrastructure
• State of the art telecommunications
• World renowned research and educational institutions
• A highly advanced banking and financial sector
• A large volume of high-tech and science based industry
• Early adopters of technology

Fudan 2010110
• Informal, non-hierarchical and collectivism culture conductive to
networking
• Sense of common purpose beyond individual (company) interests
• Network spillovers from army service
• Institutionalized availability of expertise in advisory boards and coaching
• Networked infrastructure of VC,s, Angels, Corp. VC’s, Accountants,
Lawyers, etc.
• Recruitment by referrals and “friend brings friend”
Social Capital

“YES WE CAN”
Israel entrepreneurial culture
“Donttellusitcannotbedone”

112
Entrepreneurship:
The Israeli context and culture
• Informality is a way of life
• Risk taking is endemic
• Three years army service (leadership, teamwork,
technology, risk-taking and improvisation); breeding
ground for entrepreneurs
• Pioneering Ethos and a sense of common purpose
• Immigrants part of the process
• International networks and experience
• Non-hierarchical society
• A real community (high collectivism)
• Building startups has become the national sport;
entrepreneurs-the new cultural heroes (legitimacy)
• Everyone questions authority

Israel High Tech Capital Raised
• Foreign investors have considerably increased their investments in Israeli high-tech and account for a vast majority – 76% -- of capital
investment in Israeli companies.
• The majority of investments over 2013 – two-thirds – was follow-up investment, with first-time investments constituting only one-third
of the total.
• The life-science sector led funding rounds in 2013, attracting 23% of total funds raised, or $522 million. Trailing just behind it was the
software sector, which raised 21% of total capital. Both cyber security and data reached peak investment levels, as did cloud
infrastructure and big data.

IVC Research Center - the leading source of accurate, comprehensive, and
focused information on Israel’s high-tech industry.

Robotic Coronary Cardiac Set-up
Corindus,
Previously Navicath

The Concept of Remote Control Coronary
Interventions
•.
 Bed Side Unit Control unit.
Remote Navigation System for Coronary Catheter based
Interventions
Patented 1998

First 10 patients: The Institute Cardiovascular in Fundeni hospital
Dr. Dan Delano, Bucharest, Romania
Pilot Clinical Trial

• 1998 First Patent filed (today, 19 granted and 38 pending)
• 2002 Company founded (TEIC, Israel)
• 2004 FIM in Romania
• 2006 Corindus Vascular Robotics founded (VC)
• 2010 CorPath 200 FIM results, Corbic Columbia
• 2011 PRECISE trial, 9 centers, 164 pts.
• 2011 Alliance with Phillips
• 2012 July, FDA clearance, Commercial installations

Problems in the High tech Market of Israel
• Looking for “EXITS”.
• Reach a certain level and then sell.
• Good at early stage.
• No large NOKIA etc.

“Rambam Health Care Campus”:
 Rambam Medical Center
 Rappaport School of Medicine
 Rappaport Institute for Research
Technion IIT
University of Haifa
High Tech IndustryEngineers
Physicians
Scientists
Synergy for Success

Collaboration and Technology
Transfer
Physician
s
Scientists
Funding
Synergy for Success

Rambam Innovation Fund
Engineers
Physicians
Scientists
Funding
• Each year, 5 innovation grants will
be provided to physicians/
scientists with novel ideas on a
competitive basis
• The grants will fund concept
development, prototype building
and patent protection
• This will form the basis for the next
phase of development
Innovations
Engineering
Science
Medicine

Rambam New Campus - Building the Future
Strategic Plan
Ruth Rappaport Children’s Hospital
Biomedical Discovery Tower
Cardiovascular
Hospital
Joseph
Fishman
Emergency Department

West Campus
Ruth
Rappaport
Children
Hospital
Biomedical
Discovery
Tower
Fishman
Oncology
Center and
the CV
Hospital

Biomedical Discovery
Tower Research and Innovations
Clinical Research Institute
at Rambam (CRIR)

The history of the manuscript began in La Coruña (Corunna), north-western Spain, in 1476 when
Isaac, son of Don Solomon de Braga commissioned a famous scribe, Moses Ibn Zabara to write
the Tenach (Old Testament) together with Rabbi David Kimchi’s (Radak) grammatical treatise
Sefer Mikhlol.
La Coruña Bible
(24th July 1476)

the most lavishly illuminated Hebrew Bible to survive from medieval Spain and
combines Islamic, Christian, and popular motifs

Small country - great spirit!
 Israel has an entrepreneurial spirit
 Israel has the mentality of early adopters
 Israel has a creative fusion between
academy and business
 Israel has a defense technology
commercialization
 Israel has highly skilled workforce
 Israel has a powerful VC community
 Israel has investment and R&D incentives
Israel's technology advantages:

Ventri VCT
GT
Industry based
Clinical Research

Rambam-GE Collaborations in
Imaging

NEOVASC (Banai et al):
CT Angiography of Reducer in CS
Stent Induced coronary
sinus stenosis to enhance
venous perfusion and
collateralization

Israel’s Life Science Industry
Industry Drivers
Technology Transfer Organizations (TTOs)
Commercialized defense technology
Healthcare system
Strong entrepreneurial spirit
Powerful VC community
Highly skilled workforce
Institutional incentives

• Get the right idea
• Secure protection, Secure initial
financing
• Product development
• Preclinical testing
• Clinical Testing

 An enthusiastic and devoted innovator
challenged by obstacles (hospital, university.
private company, other).

 Get the adequate financial
resources to move forward.
 Can proceed in an institutional or
commercial environments.
 It almost always comes with the
requirement to protect the idea
from being copied and duplicated
(patents).

 Get the right team!
 Develop the device towards first-in-man
studies
 Expect a few modification based on
preclinical experience

 Validate the technology with appropriate
in-vitro and animal models before First In
Man.

 Proof of the technology in patients
for a specific indication.
 Phases:
◦ first-in-man
◦ Intermediate size registries
◦ large scale randomized controlled clinical
trials, designed to prove safety and
efficiency.
 This is where ethics and the need to
control conflicts of interest has
becomes a major consideration.

 Compelling clinical need
 Safety and efficacy
 Physician training
 Ease-of-use
 Economic factors (reimbursement)
Commercial
Acceptance

 Encourage industry- academia collaborations
by national programs,
 Mechanisms to promote innovations-
competitive translational grants
 Encourage FIM and innovative clinical studies
in Israel
◦ Shorten and simplify IRB application process
◦ Limit the time to approval

154
Israel- The High-Tech Ecosystem
• Technology Hotbed (20% of Nasdaq companies Israel founded)
– Recognized as an excellent source of technology innovation
– Largest concentration of high-tech companies outside of the US
– Created category leaders in various industries
– Tremendous concentration of global technology leaders
Global
Hi-tech
Companies
Availability of
Technical
People &
Management
Expertise
Existing
Technology
Infrastructure
Experienced
2nd time
entrepreneurs
University
Computer Science
Students
Foreign
Technology
Firms
Incubators
Defense
Corporate
R&D
Leading
Academic
Institutions
& ResearchCorporate
Spin-
Offs
Seasoned VC Community
Government
Support

Innovations roguin.27112014

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