Experienced veterans in Israel’s biomed sector can name a long list of familiar drugs that have been born out of academia, including Copaxone, Rabif, and Interferon. However, success in the industry has slowed down in the last decade due to a lack of interest from larger pharmaceutical companies and the gap between academia and industry. To combat this, commercialization companies have tried to bridge the gap by commercializing technology to Israeli start-ups, promoting applied research, and establishing programs to encourage entrepreneurship in universities. Companies have also started collaborating with researchers to develop future intellectual property, instead of just existing patents. Additionally, universities have established research centers in hot scientific fields to provide scientific services to startups and more mature companies. However, tensions can arise between the industry and commercialization companies over the price charged for early-stage technologies. Despite this, the focus in Israel is on the entire volume of activity, rather than individual success stories.
The veterans of the biomed sector in Israel know how to recite a list of many familiar drugs born in academia. Copaxone, Rabif and Interferon are just an example in a long line of developments that enriched the scientists and universities behind them, even if few of these drugs were brought to the market by Israeli companies. These successes also built Israel’s image as a country that has impressive science and international companies must operate in it.
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But it seems that the spring of success has dried up a bit in the last decade. Large pharmaceutical companies became interested in more mature assets, and thus ideas began to disappear in a kind of “valley of death” that opened between academia and industry. At the same time, the global competition increased and in the major universities in the USA a close relationship was formed between the academy and the local medical industry.
Bring industry to academia
The commercialization companies, which are responsible for taking the knowledge out of the universities to the public and the market, and getting paid for this knowledge, tried to overcome the problem in several ways. First, they worked to bridge the “valley of death” by commercializing the technologies to start-up companies, usually Israeli. Indeed, the number of start-ups founded on the basis of developments from the academy is increasing.
Some of the universities even established funds to support start-ups. At the same time, programs were developed by the Innovation Authority, the National Academy of Sciences, as well as by the universities themselves, to promote applied research, designed to allow science to emerge from the laboratories.
The activity in the field of entrepreneurship in universities is very lively and includes a wide variety of ventures that operate at the same time, sometimes in cooperation and sometimes separately from each other. The universities are partners in technology incubators, establish accelerators with the participation of large companies and establish training programs for entrepreneurship. This is in addition to the establishment of industrial complexes near the universities, such as the Gav-Yam complex and the Navy House project near Hadassah Hospital, or the high-tech campus near Ben Gurion University.
The commercialization companies themselves are partners in training researchers in entrepreneurial thinking, encourage large companies to establish R&D centers within or adjacent to the university, and promote the funding of applied research within the laboratories. Thus, for example, an application company of the Hebrew University asked international companies to bring to it problems for which they are looking for scientific solutions .
One of the inquiries was from a soft drink company, which asked for help solving a bottle sealing problem. The university contacted all the relevant laboratories that would offer a possible solution and the company finally chose a few that seemed particularly interesting. These researchers wrote a full research proposal, and the company chose to fund a research project in one of the laboratories. If the project does lead to solving the problem, the company will purchase the intellectual property from the laboratory.
Future intellectual property instead of an existing patent
Collaborative applied research between companies and researchers is not a new thing, but in the past it was not the common model of commercializing companies. They preferred the model where a scientist writes a patent and they commercialize it. However, beyond the “Death Valley” problem, a mismatch between the industry’s needs and the researchers’ developments was discovered. The assumption of the new model is that when the researchers think a little more like the companies, their developments in the first place will be more suitable for the market, and the valley of death will be less deadly anyway.
Keren Primor, CEO of Ramot (Tel Aviv University’s commercialization company), testifies to the change: “Today, most contracts are signed not around existing intellectual property but around future intellectual property.”
Tamar Raz, CEO of Hadassit (the commercialization company of Hadassah Hospital), adds: “Of the 179 startups that the Academy helped establish this year, 74 are based on registered patents, and 105 hope to use researchers to develop intellectual property together. It has always existed in commercial companies, but the emphasis on it has increased.”
The recently published ITTN (Israel Tech Transfer Network) report shows how relevant the new model is to the life sciences sector (see graph). The trend is noticeable, not surprisingly, also in the commercialization companies of the hospitals, whose status was regulated in the early 2000s. Only 18% of the start-ups they founded were based on existing intellectual property.
“The idea of future intellectual property is very relevant, for example, to the hot field of bioconvergence,” Raz says. “The engineering component can come from all kinds of places, while the biology component often requires academia. The commercialization companies can connect factors that don’t even know they need each other.”
Less success stories, more activity
Another type of collaboration, which existed in the past but is getting a twist today, is the provision of research services to companies. Universities have started to establish infrastructural research centers in hot scientific fields, usually with the support of the state, which can provide advanced scientific services to many companies, to start-ups as well as to more mature companies.
Examples of this are the Synthetic Biology Laboratory at Reichman University, the Center for “Organs on a Chip” at Hadassah Hospital, where companies can test drugs on advanced animal tissues, or the 3D Printing Center at Tel Aviv University, which has the only printers of its kind in the country.
“In such a case, the researchers do not necessarily have to touch the intellectual property of the company, but the university both receives payment and is exposed to the advanced science done in the companies, and to the way in which the abilities of its researchers are used in the real world,” says Raz.
“When a company comes to print at our 3D center, another connection is created between the researchers and the companies. From there, more startups can grow,” adds Perrymore.
Keren Primor, CEO of Ramot, Tel Aviv University / Photo: Inbal Marmari
A well-known example of such a relationship is the information centers of the hospitals, which offer start-ups to come and conduct research on the information collected by them. There is also an inverse relationship here: researchers receive information from industry. For example in the field of life sciences, researchers can receive information that a company collects within a medical application or medical device.
“The idea today is not the one-off success stories (although there are those as well), but the volume of the entire activity.”
The question is about the amount of the price charged from companies
In the US, university graduates who establish successful companies also tend to donate their capital back to the universities that raised them. Therefore, it is customary in the American commercialization companies to say that they should spend intellectual property at almost any price, because at some point the investment will return to them. In Israel, the graduates who donate are still few, and the universities They do try to monetize the ideas that come out of them.
This may sometimes create tension with the industry, as a source from an international company who works with commercialization companies says. “Basically, we are very satisfied with the process that the companies are going through. There is more openness, we can feel it, even at the Weizmann Institute, which was known as a strict and closed place. The main challenges are the price. When it comes to technologies in very early stages, the price that the commercialization companies charge in Israel is higher than the price charged in the world , sometimes even double.
“I think that there is very advanced and unique science in Israel, so we sign some of the deals even at these prices, but some do fall through because of the price, and especially between the gap between the price and the early stage in which the technology is, it is not clear if the researchers really understand it. And sometimes the deal goes through In practice, but the best company that could be, with the best people, is not established.
“Another challenge is that sometimes the commercialization companies themselves are still not deeply familiar with all the technologies in their institutions, and I recommend that companies that really want the newest science also establish an independent relationship with the laboratories that interest them.” Nevertheless, the same factor favors commercialization companies. “The entire commercialization market has moved to start-ups, and start-ups are a difficult business. But the successes can leave more activity in Israel, assuming that Israel will remain more or less the same.”
The change in the commercialization of technologies is also gradually changing the university’s way of thinking about the role of its people. “Today, sometimes you get academic credit even for patents,” says Perrymore. “VAT also began to understand the issue. These days, data is being collected to see how to strengthen this direction, without distorting the existing models of academic credit and promotion in universities.”
Cooperation with risks on its side
The advantages of connecting industry to science in the first stages are many. The public will benefit from science sooner, and in the world of medicine this is of course critical. The universities will receive an important source of funding. The researchers will see their products reach the market and will also be financially rewarded. Students will have diverse future employment opportunities.
But there are also drawbacks or at least concerns regarding the influence of companies on science. The immediate concern is that the researchers’ dependence on industry will lead to a conflict of interest in clinical trials. There are many mechanisms designed to protect the transparency and independence of clinical trials, so at least this issue has a certain answer, but there is another future concern regarding the freedom of science and intellectual diversity.
If the needs of the market direct the science, significant breakthroughs may be missed that the market is not yet ready for and does not know it needs. It is possible that a certain convention regarding the question of what is a commercial application and what is not commercial will permeate the academy. Diversifying the ways of thinking of different professions is critical to true innovation.
Raz agrees, but claims that in the past the disconnection was so great that even after the scientists and the researchers came closer together, each side can still maintain its independence and its unique way of thinking.
Tamar Raz, CEO of Hadassit, Hadassah Hospital / Photo: Yeh”c
“Until a few decades ago, they still said, how is it possible to do good science if it is also applied? If it is somehow related to a commercial company?” Raz says. “Today we understand that the disconnection from the industry took a toll: a lot of work was done in directions that were not really applicable, and while also disconnecting the laboratories from themselves, which prevented cross-fertilization. In medicine especially, this means the lack of maximizing the potential of science for the benefit of humanity.”
“The intention of the universities is not to tick off money from the industry, but to create companies that contribute to the ecosystem, that create jobs, that ultimately strengthen us all,” adds Perrymore.
What is the exact role of commercialization companies in this process? After all, a large part of the groundbreaking and well-financed innovation ventures are actually not subject to commercialization companies.
Primor suggests not eulogizing them yet. “The commercialization companies still manage the commercial relations between the parties. Only they can understand everyone’s language and create the document that regulates the relations in a way that is acceptable to all.”