Venture capitalists' pessimism over prospects for Israeli biotechnology

The biotechnology industry in the USA and possibly elsewhere may be poised to have one its best years for a long time, particularly with regard to raising venture capital investment to new peaks. However, indications seem to point to Israel not joining this investor-led boom/cycle, the reality seeming to fall far short of expectations built up over the years.

Only Interpharm (of the Ares-Serono group) with Rebif (beta interferon) and Biotechnology General (now Savient) with the recombinant human growth hormone Biotropin (somatropin) remain as examples of Israel's pharmaceutical biotechnology industry; both were established in the first wave of start-ups in the 1980s.

Israeli start-ups which try to break into the biotechnology field find insurmountable obstacles, such as the absences of infrastructures and financing. Investors, both local and foreign, have a range of excuses as to why they do not invest in Israeli firms, eg, academic research is not sufficiently application-oriented, and the lack of research funds and experienced management. Moreover, many are beginning to state publicly that Israel will not, in the coming years, develop a true pharmaceutical biotechnology-based industry.