Rehovot HiTech Opportunities: Israeli Investment in Foreign Products

Israel's medical equipment market continues to present significant opportunities to U.S. exporters. [In 2003] the market was estimated at $520 million annually with over three-quarters of this market represented by foreign imports. The U.S. industry holds a strong position, accounting for over 50% of total imports. Israel's mandatory National Health Insurance (NHI) provides a basic package of health services to all Israeli citizens regardless of age or medical condition. The NHI defines a comprehensive list of medical services to which each citizen is entitled. Thedemand for high-end medical equipment and supplies have been growing due to the advances in medical practices and the constant addition of new procedures to the NHI. The medical equipment market is considered stable with an annual growth of 4%. U.S. companies with find good opportunities in diagnostic equipment, reagents and kits, computerized health care systems, imaging systems, cardiology equipment, and various disposable products in Israel's medical equipment and supply market.

Some Basic NHI Health Services and Related Equipment

Clotting
Drugs
Dental Applications
Stem Cell Research
Genome Research
Vaccinations
Medical Diagnostic Equipment
Preventative Medicine
Surgery and Transplants
Obstetrics and Fertility
Injuries Caused by Violence
Treatment of Chronic Diseases
Medical Diagnosis and Treatment

Public and private research and development expenditure on a wide range of projects has increased yearly reaching over $500 million in 2002. Sales of laboratory scientific instruments have risen in the biotechnology and pharmaceutical sectors. With a number of on-going and proposed high-tech investment projects and a strong line of pharmaceuticals, advanced electronic products/components, information appliances and telecommunications products, the demand for laboratory scientific instruments will be further stimulated. The market for imported laboratory scientific instruments, such as glassware and plastic ware, spectrometers, chromatographs, and electrophoresis instruments, estimated at over $200 million annually. This demand will continue to grow as theGovernment of Israel continues to actively promote industrial upgrading and emphasizes the need for increased research and development over the next five years. In addition to the equipment identified above, the U.S. Department of Commerce (U.S.DOC) previously suggested that the best sales prospects for U.S. firms in the laboratory & scientific instruments sector include:

Laboratory automation technologies
Associated HPLC software
Thermal analysis equipment
Low-priced consumables
High performance liquid chromatographs (HPLC)

Furthermore, the U.S. DOC states that U.S. exporters of integrated workstations with the ability to automate a wide variety of tests have a distinct advantage in this market.

For the Table of "Israel Market of Laboratory and Scientific Instruments", that provides the numbers (for years 1999, 2000, 2001 & 2002) of Total Market Size, Total Local Production, Total Exports, Total Imports, and Imports from the U.S, please see the original document, or request it from MyRehovot via email.

More than 150 commercial companies are engaged in biotechnology in Israel, with many products already being produced and marketed throughout the world while hundreds more are in the pipeline. Some of these companies have already become internationally known players in the biotech field, including Biotechnology General, Hazera, Interpharm, Orgenics, Pharmos, QBI, Compugen, and Teva.

Sales of biotechnology products in 2001 were approximately $800 million, mainly from therapeutics, agricultural applications, and diagnostics, with most of the revenue resulting from export. A forecast published by Ernst & Young Israel indicated that the products currently under development have the potential of generating annual sales of US$3 to 4 billion by the year 2008.

Israeli developments in the biotech industry include therapeutic drugs for the treatment of multiple sclerosis, ophthalmic products, and human growth hormone. Other therapeutic products in various stages of development address the treatment of diabetes, various cancers, epilepsy, stroke, scleroderma, lung and liver fibrosis, as well as Alzheimer's disease and central nervous system (CNS) injuries. A number of firms, including start-ups, have developed simple-to-operate mass-market diagnostic tools. Other technologies currently being developed include: drug delivery techniques, bio-electronics and biosensors for human diagnosis, high throughput screening, computerized technologies for understanding life processes, more effective natural methods for environmental clean-up, bionutraceutical natural health foods, and genomics.

Promising Outlook and the lack of Funding

Early-stage biotechnology co-development agreements with U.S. companies present an opportunity. Despite the growth in Israel's life science sector, early stage biotechcompanies, especially therapeutics companies, face limited funding opportunities. Furthermore, these companies, however technologically sound, face infrastructure and severe management constraints. However, future co-development opportunities with U.S. counterparts could provide the leverage to streamline academic researchinto marketable therapies. A tremendous proliferation of innovation, strong scientific personnel, and intellectual property make Israel the ideal place for strategic collaboration opportunities.

Source: Andrea Zvonicek, Jim Miwa. Country Market Report Israel: Market Opportunities in Biotechnology 2003. California Technology, Trade & Commerce Agency Office of Export Development