Jerusalem: The Biotech Capital

Merck and Pfizer consider opening research centers in the city.

A number of major international biomedical companies are negotiating to open research and development centers in Jerusalem. Among the big names in contact with the Jerusalem Development Authority are Pfizer, Merck and Bristol-Myers Squibb.

The CEO of the JDA, Moty Hazan, and Chen Levin, the executive director of the Bio-Jerusalem project confirmed the contacts.

biotech - Haaretz - July 20 2011

For a decade, Israel has attempted to bring large pharmaceutical companies to open R&D centers here, but not with much success. Large R&D centers would give a big push to the biotech industry. Today, the Israeli biotechnology sector is characterized by well-developed academic research, but local industry has not been able to fulfill the potential of the academic research. The state expects the new R&D centers will create a new environment and push the local biotech and biomed industries to reach international levels.

"My dream is to turn Jerusalem into the Israeli and international center for biotechnology within five years," said Hazan. "Jerusalem has a lot to offer multinational companies, who are looking for the best minds in the world. When they come to Jerusalem, we show them Yissum, the Hebrew University's technology transfer company, and Hadasit from Hadassah Medical Center, and the university and the surrounding labs," he added.

The state, in conjunction with the Jerusalem municipality and the JDA will invest NIS 71 million in a program to strengthen the biotech sector in the capital over the five-year period 2011-2016.

Jerusalem's biomed industry employs over 3,500 workers, about 12% of all employment in the city. Forty-three percent of all the basic biomedical research in Israel is conducted in the capital, and the city has 150 companies operating in the sector - a 50% increase over the past three years. Fifty percent of all clinical research in the country is conducted in Jerusalem, and some 1,800 students in life sciences graduate from Hebrew University very year.

"The city has the status of a national priority area, and there are grants and high salaries here. We are in contact with about 10 multinational companies, and the goal is that when they open research and development centers in Israel, they will do it in Jerusalem," said Hazan.

The Bio-Jerusalem project will provide economic incentives for companies and employees for moving to Jerusalem. The sums can reach NIS 80,000 per worker for two to three years.

Mid-sized and large companies will receive grants only for R&D employees, while startups can receive grants for all workers. There is an extra 20% grant for those employees actually living in the capital, and not just working there.

The program will support the construction of labs for rent for the first time in Israel. These labs will be for small and medium-sized firms. The first such facility is now being planned, and the developer will be offered a subsidy covering almost the entire cost of construction. There are other grants for buying equipment.

One of the biotech companies that moved to Jerusalem is Omrix Biopharmaceutical, which was bought out by Johnson and Johnson in 2008 for $438 million. Omrix is now spending $20 million on a new plant in the capital that will employ 60.

Rafa Laboratories, which sells 5% of all the medicines in Israel with local revenues of $70 million, is building a new factory at a cost of $38 million. The company will employ 300 workers in the capital when the new plant opens in 2013.

Teva Pharmaceutical Industries, which has been Jerusalem in various forms since it was founded in 1901, opened a new plant in the Har Hotzvim industrial area in 2005, with an investment of $80 million. Teva has two manufacturing facilities in Jerusalem that together employ 1,000 people.

Sigma-Aldrich also opened a new plant in the capital in 2010, and is planning on expanding it. Sigma's two facilities in Jerusalem employ 100 people.

Israel's first biomed park for startups was built in the Hadassah complex in Ein Karem.The Bio-Jerusalem project will turn the capital into the center of the Israeli biomed industry, said Chen.