Billionaire Marius Nacht, the co-founder of $17 billion cybersecurity firm Check Point Software Technologies Ltd., has set his sights on Israel’s healthcare technology. Having set up aMoon, a life sciences venture capital fund that invests in innovative health technologies, after he saw his father agonize in a battle with cancer, he has now founded a nonprofit organization that aims to make Israel a global leader on the healthcare map.
Set up 10 months ago, the 8400 Health Network run by Nacht and co-founder Yair Schindel aims to gather the brightest brains at the intersection of health and technology to help Israel become a life science powerhouse.
The medtech revolution he hopes Israel will be leading is set to see robots performing surgery in developing countries, customized 3D-printed pills, and laser-focused treatments.
Global healthcare expenditure is forecast to reach $9.5 trillion in 2018, according to World Health Organization data, and tech giants such as Apple Inc., Intel Corp, Facebook and IBM have all started investing in the field, according to New York based data firm CB Insights.
“Technology is meeting healthcare and science in a big way,” Schindel said in an interview with The Times of Israel at aMoon’s offices in Raanana, in central Israel.
The idea is to create a network of 400 people over eight years, said Schindel; hence the NGO’s name, 8400 (it also recalls the legendary elite 8200 army intelligence unit, which has spawned many of Israel’s tech entrepreneurs). Schindel, who is a co-founder and managing partner at aMoon, was also the CEO of Digital Israel, in charge of setting out the digital policies of the government, and the founder of Maoz, a nonprofit organization that aims to create Israeli leaders in the public sphere.
Cybersecurity is one of the country’s key growth engines, Schindel said, and Israel is estimated to get some 20 percent of global private investment in cybersecurity technologies, according to government data. Out of 6,000 startups operating in Israel there are some 350-400 cybersecurity firms, said Schindel, a former CEO of Start-up Nation Central, a nonprofit organization that matches Israeli startups with investors.
But there are 1,500 -1,700 healthcare and life-sciences firms, he noted, and Israel is known as a research and development hub for startups in the medical and biotech industry. So the impact of these companies on Israel has the potential of being even greater, he said.
Israeli venture capital funding in digital health startups jumped by 30 percent last year, to almost $340 million, compared with 2016, according to data from Start-up Nation Central.
Israeli innovation is behind almost half of the healthcare revenues of the 350-year-old German pharmaceutical and chemicals firm Merck, Kai Beckmann, CEO of Performance Materials at the firm, said in an interview in February.
“We have five times the talent and creativity in the healthcare industry that we have in cybersecurity,” Schindel said. The inroads Israel has made in the field to date are just the tip of the iceberg. The potential is huge, and still largely untapped.
Israel has pipeline of ’20 Copaxones’
Referring to the success of Teva Pharmaceutical Industries Ltd. , the $21 billion Israeli maker of the branded Copaxone drug for multiple sclerosis, Schindel said that the aim of 8400 is to “build three to four Tevas. You just need one blockbuster drug,” he said.
Israel has “20 more Copaxones” in the pipeline, he said. They just need a shot at being developed.
The 8400 program has already recruited some 50 volunteers as part of its first cohort of healthcare professionals, entrepreneurs and government officials who will join forces and help promote the industry. These include the director of Israel’s Clalit Health Services research institute, the technical director of Maccabi, government officials, members of academia, local hospitals and university tech transfer divisions, highly qualified entrepreneurs and investors.
The idea is to get these brains together and learn the best practices of life-sciences ecosystems around the world, and map out the bottlenecks and break down silos: remove any regulatory hurdles, help entrepreneurs overcome cultural gaps when dealing with potential investors from abroad, and most of all, help startups bridge the huge funding gap they face when developing their technologies.
Healthcare firms need a lot of money and there is a lot of risk involved in developing a medical product or drug, which could fail at any stage of its development if the clinical trials don’t produce the expected results.
“Once you get to the Phase III clinical trial stage you need a big check of some $20-$40 million,” Schindel said. And there are very few investors in Israel who can cough up that kind of money. In Palo Alto, for example, getting that kind of money is not an issue, he said, adding that Israel has brilliant scientists and developments, so they should be able to get access to funds. aMoon, the VC fund he co-founded with Nacht, invests in early- and late-stage life sciences firms, he said.
Others issues that the 8400 members will tackle will include finding ways to help technologies leave academia and make their way to industry; solve managerial skills problems, and set up a network of mentors.
Earlier this year, at the World Economic Forum meeting in Davos, Switzerland, Prime Minister Benjamin Netanyahu said that Israel is planning to set up a NIS 1 billion ($292 million) project to develop, over the next five years, personalized and preventative digital medical technologies. Netanyahu asked the German software firm SAP to join forces with Israel on the program, a statement by the Prime Minister’s Office said.
“We will be working in partnership with the government to take the right decisions for the nation,” Schindel said. “The potential to grow our national gross domestic product is enormous. Some 10 percent of the Israel’s 1,700 healthcare startups are in the late stage of development. Not all will become multi-billion dollar global corporations like Check Point or Teva, but many more of these can, and will.”