2020 was a record fundraising year for Israel’s life sciences industry, with health tech firms raising a record $2.5 billion, up 55% over the previous year, according to a report by Israel Advanced Technology Industries (IATI) , is an umbrella organization of the highest order. Tech firms operating in Israel.
Data shows that in the first quarter of 2021, Israeli life science companies raised $900 million, the best first quarter in a decade and the second quarter after the fourth quarter of 2020.
The life sciences industry is generally divided into four major subsectors – digital health, medical devices, biotechnology and pharmaceutical therapeutics.
There were 211 life science companies involved in investment deals in 2020, and 42 in the first quarter of 2021. Average funding per deal in 2020 was $11 million, a record high for the past 10 years. The report said it averaged over $21 million in the first quarter of the year, which is similar to the average amount raised in the fourth quarter of 2020.
“The life sciences and health technology (health technology) market is considered the largest in the world and Israel has unique assets that constitute the potential for global leadership,” IATI CEO Karin Meyer Rubinstein said in a statement.
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The data shows that by the end of 2020, there were approximately 1,750 life science companies active in Israel, employing more than 84,000 people. Over 1,500 life science companies were established in Israel over the past decade, or an average of 150 companies each year. Half of these are still active.
Karin Meyer Rubinstein, CEO of Israel Advanced Technology Industries (IATI) (Sivan Farag)
But with only 92 companies set up in 2020 as compared to 152 in 2019, the shortfall that started in 2017 continues. In 2016, 192 companies were established.
The sharp decrease in 2020 can be explained by the outbreak of the COVID-19 pandemic, which hit Israel at the end of the first quarter of that year, causing a “sharp drop” in the number of companies established that year.
According to the data, the industry is still heavily biased towards medical devices, representing about 40% of life science companies in 2020, a figure that has not increased over the years. Biotechnology and digital health are the next largest sub-sectors with 468 and 476 companies representing approximately 53% of all life science companies, respectively.
Over the past six years, 47 Israeli life science companies were acquired in merger and acquisition deals for a total of more than $9 billion. Major was robotics Speak Bought in 2018 by Irish-American firm Medtronic for $1.6 billion, making it the largest acquisition in the history of Israel’s life sciences industry. Lumenis was Received For $1.2 billion in 2019, by funds affiliated with Baring Private Equity Asia (BEPA), it became one of the top five largest M&A deals in Israel that year.
M&A deals in the life sciences sector in 2020, however, fell to only $900 million in 11 deals, compared to $2.08 billion in 21 deals in 2019 and $2.7 billion in 20 deals in 2018. Last year was the first year that did not bring any major acquisition deals worth more than $1 billion, after three consecutive years of such deals, the report showed.
The 2020 M&A figure was the lowest in three years, and this can be attributed to buyers being sidelined by the coronavirus pandemic. The report said that there were five acquisitions in the first quarter of 2021 for a total of $396 million.
A back surgeon looks at a 3D model of a patient’s spinal column in preparation for surgery using the Mazor regenerative system (courtesy)
IATI called on the government to establish a local body with functions similar to those of the US Food and Drug Administration, to ensure that Israeli companies can develop their drugs and medical technologies in Israel and in greater numbers locally. to conduct clinical trials. compared to abroad.
“The establishment of the Israel FDA will boost Israel’s life sciences industry and be a magnet for global companies operating in the field. With a strategic need, the economic potential of tens and hundreds of billions of dollars is projected,” said IATI CEO Mayer Rubinstein he said.
The Abraham Agreement, signed between Israel and the United Arab Emirates last year, also promises economic opportunities in the health tech sector, the report said.
“The new agreements open up a new market for Israel’s healthcare ecosystem,” the report said. This new market is “eager to adopt new technologies, while also serving as a potential link for additional new Arab markets.”
In addition, Israeli startups and VCs can benefit from the UAE’s extensive funding capabilities, while Israeli universities and research and development can undertake joint research projects with new UAE partners, “building on the UAE’s thirst for new knowledge.” “
