State to subsidize biotech investment funds
Treasury, Chief Scientist's Office trying to repeat high-tech success
The state will try to repeat its success in high-tech investing by establishing joint public-private funds for Israeli biotech investments. The Industry, Trade and Labor Ministry and the Finance Ministry intend to publish an international tender soon, including state subsidies for such investments in biopharmaceuticals and other life-science ventures. The treasury plans to put up NIS 300 million, which will be used for two or three different investment funds for a period of up to five years.
The Chief Scientist's Office in the Industry, Trade and Labor Ministry is trying, along with the treasury, to copy what it did in the 1990s with the state-supported Yozma investment fund, one of the main engines behind the Israeli venture capital industry.
The funds have two goals: To raise money for the Israeli biotech industry, which has difficulty finding capital; and to import international knowledge and managerial experience in the industry, and thereby create the infrastructure for a biotech investment industry. Israel is facing a shortage of both funds and experience in the industry - and Israeli investors are hesitant to invest.
The tender will be open only to major international biotech investment firms, with experience in the sector. It seems that the primary consideration in examining the bids, after the professional consideration, will be the amount of money the investors are willing to put up. In other words, how much will they be willing to leverage the state funds. The treasury is hoping for at least three times the state investment, for a minimum of NIS 1.2 billion total.
The money can be raised both in Israel and abroad. The state would like to see much of the money raised locally from local institutional investors, who have so far shied away from the Israeli biotech industry.