The Ministry of Finance and the Ministry of Industry, Trade and Labor signed an agreement today to set up a fund with OrbiMed, an international company that currently manages investments in excess of $5 billion in life sciences companies. The scope of the Israeli fund's activities will amount to $200 million at the initial stage and is likely to grow in the future.
The fund will invest in life sciences companies, with a significant proportion of the investments being directed toward the biopharma sector, which the State has identified as a field in which Israel has an excellent but not fully tapped infrastructure. The new fund will be one of just a few specializing in the biopharma sector.
OrbiMed Group qualified to make a bid for establishing the fund having met the tender's high threshold conditions, and at the second stage was required to raise an amount of at least $76 million. OrbiMed succeeded in raising $160 million on the private market, more than double the minimum required. This is an especially noteworthy achievement in view of how hard it as at present to raise venture capital. The amount raised leverages the government investment to the maximum. As part of the agreement, the State will invest $40 million in OrbiMed Israel. The total amount that the fund will manage, which, as stated, comprises the amount raised by OrbiMed and the State's investment, will make the fund into one of the largest venture capital funds in the Israeli industry.
OrbiMed's entry into Israel is expected to boost international investment in the life sciences industry in Israel by $200 million, through co-investments with foreign funds.
Following the award of the tender, OrbiMed has opened a representative office in Israel and its activities will be headed by three Israeli partners - Dr. Nissim Darvish, Erez Chimovits and Anat Naschitz. OrbiMed Israel will work in coordination, and will fully cooperate, with OrbiMed International thereby enabling the portfolio companies to benefit from the experience and practical knowledge accumulated over many years by OrbiMed International, as well as from its global reach in the USA, China and India.
Minister of Finance, Dr. Yuval Steinitz said that, "this particular moment signifies great success - it testifies to the government's ability to identify a malfunction, to propose a solution and to forge an alliance with the private sector; I hope that our efforts will bear fruit and that the biotech sector will continue to progress and develop".
Minister of Industry, Trade and Labor, Shalom Simhon stated that, "the biotech fund set up jointly by the Ministry of Finance and the Ministry of Industry, Trade and Labor is a shining example of the confidence that the government has in industrial R&D, which it sees as being one of the principal growth engines of the Israeli economy".
Director General of the Ministry of Finance, Mr. Haim Shani said that, "the establishment of investment funds is one of the ways that the Ministry of Finance and the Chief Scientist at the Ministry of Industry, Trade and Labor advance their growth policy, which is intended to assist in maintaining Israel's status as a technological power that makes a significant contribution to GDP growth".
Accountant General in the Ministry of Finance, Mr. Shouky Oren said that, "the way in which the tender was constructed was instrumental in the decision of one of the world's leading funds to set up a representative office in Israel, jointly with an Israeli team. I believe that this is one of the better models of government involvement - making use of private, specialist entities and attracting investments by changing the risk profile of the investors. I am certain that companies in the life sciences sector and the hi-tech industry will benefit from the process".
Chief Scientist at the Ministry of Industry, Trade and Labor, Mr. Avi Hasson stated that, "the objective of the investment funds is to bridge the funding gap, thereby removing the obstacles to investing in Israeli biotechnology companies that currently exist in Israel. We have been aware for some time of the potential of the Israeli biotechnology industry and its contribution to the economy, and the setting up of this fund is the crowning achievement in a long line of measures implemented by the Chief Scientist's Office in recent years aimed at establishing and expanding the activities of companies in this sector".
Managing Partner of OrbiMed Israel, Dr. Nissim Darvish noted that, "the fund will invest in a broad range of topics in the life sciences sector, such as: medical equipment, biotech, diagnostics, and the like. Starting at the seed stage, the fund will invest at every stage of the lifecycle of the companies in the various fields".
Managing Partner of OrbiMed International, Mr. Jonathan Silverstein said that, "the decision to operate in Israel resulted from the recognition of Israel's vast potential in the life sciences sector in the coming years. In the last two years we have witnessed tremendous momentum in this sector in Israel and major growth in the number of companies at various stages of clinical trials. OrbiMed has examined the government programs of other counties around the world and has concluded that the combination of the programs of the Israeli government together with the potential of the local industry is the most attractive".
Site Editor 10.04.2011 16:02 |
Ministry of Finance and Ministry of Industry, Trade and Labor Today Signed Agreement
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