Innovation Out of Necessity: Incubating Solutions in Israel

Wednesday, April 29, 20094:00 p.m. - 5:15 p.m.

2

Milken Institute Israel Center:Accelerating Innovations and SolutionsSince The Last Global Conference

3

Milken Institute Israel Center:Accelerating Medical Innovations

“Tomorrow” – Israel’s President conference Financial Innovations Lab

4

Less than a year after a Financial Innovations lab…

February 4, 2009

“…The idea gathered momentum with Michael

Milken's think tank that he set up for president

Shimon Peres, around Peres's 2008 Presidential

Conference. Milken's group included Ministry of

Finance officials.”

Israel’s Ministry of Finance announces $300 millionbiotech support fund.

5

Milken Institute Israel Center:Accelerating Renewable Energy Adoption

Hezi Kugler,Director GeneralMinistry of National Infrastructures

Alumna Noa Yehezkel,Ministry of Finance

Major General Moshe Kaplinsky CEO, Better Place Israel

6

Milken Institute Israel Center:River Revitalization Revolving Fund

SRFSRF

INVESTMENTS

CASH

CONTRIBUTEDCAPITAL

LOANS

November 6, 2008: Financial Innovations Lab, tour and seminar for the MOF

7

Milken Institute Israel Center:Regional Water Management Financial Entity

November 5, 2008: Financial Innovations Lab

8

Milken Institute Israel Center

Accelerating Financial Policy Reforms

9

Milken Institute Israel Center

Leading Plenary Sessions at Israel’s largest business conference

10

EconomicDevelopment andJob Creation forNorthern Israel

11

Milken Institute Israel Center

Building a risk retention model for Northern Israel

12

Milken Institute Israel Center:Private-Public Partnerships and Mission Related Investment

•Presented various tool for

Private-Public Partnerships.

•Identified relevant mission

related Investing tools

•Future work: localization for

urban areas (Jerusalem)

13

Milken Institute Israel Center:Koret-Milken Institute Fellows

• More than 12 pieces of legislation

have been enacted (over 5% of

the total bills passed by the

Knesset)

• Research has been leveraged to

channel millions of dollars into the

Israeli economy

• The Fellows have gone on to great

success in the “Real world” Class of 2008-2009 at Milken House in Jerusalem

14

Milken Institute Israel Center:Market Liquidity Business Finance

November 2008,

Financial Innovations Lab

at the

Tel Aviv Stock Exchange

15

Milken Institute Israel Center:Affordable Housing

Fellow Merav Elgar opens

a key real-estate conference

16

Milken Institute Israel CenterEducation Reforms

Policy Brief examines innovations

for both higher and elementary

education, including:

• Human capital contracts

• Voucher systems

• Charter schools

17

Isabel Maxwell

Director and ChairSocial EntrepreneurFellowship ProgramIsrael Venture Network

www.israelventurenetwork.org

Contact:imaxwell@israelventurenetwork.org

18

IVN’s Mission

Investing in Entrepreneurship, Israel Venture Network (IVN)strives to promote social change in Israel by strengtheningeducation and the economy in the geographic and socialperiphery.

Established in 2002, IVN is a network of business executives, corporations &philanthropists in Israel & the US, sharing the values of venture philanthropy.

IVN's main advantage lies in its ability to identify needs, initiate/incubate vehiclesof change and bring them to a sustainable and scalable level:

•Entrepreneurships initiated by IVN

•Entrepreneurships incubated by IVN

19

Change through Entrepreneurship

Entrepreneurships initiated by IVN

IsraCorps The program works to strengthen Israeli society throughinstilling volunteerism as a tool for empowerment and as agreenhouse for nurturing the next generation of social leaders.

The Institute for School Leadership (ISL) A nationalprogram for school principals, training them as the primarychange agents. The program combines active learning withdirect mentorship of the principals in their schools.

IVN’s Economic Reconstruction Initiative (IERI) The programstimulates business growth in Israel's periphery, through a scalablemodel of coaching/mentoring and lending for small and medium-size

businesses, combined with strengthening regional businessconsultants and MATI's.

20

Entrepreneurships incubated by IVN

Social EntrepreneurshipProgram supports and incubatesSocial Entrepreneurs dedicated todeveloping and implementinginnovative and sustainablesocial/economic solutions, growingand expanding the projects andbringing them to a sustainablelevel.

21

Ron H. Maron, Ph.D.,BIRD Foundation

Delivering Healthcare Solutions through StrategicAlliances - the Role of Foundations.

22

Israel Innovation Force …“Israel is noted for its entrepreneurial spirit”…

Source: World intellectual property organization.

Medical Technology Family, by Region, 2001-2005

23

….“Israel's entrepreneurship quickly transforms start-upcompanies into profitable and competitive companies. This isevident by the fact that Israel has the largest number ofNASDAQ listed companies outside the United States….

Apart from Silicon Valley, the highest concentration of high-tech companies in the world is found in Israel, with 4,000businesses.”

Source: Ministry of Foreign Affairs of Denmark.

24

Israel Innovation Force …“Israel is noted for its entrepreneurial spirit”…

BIRD Foundation Mission is“To stimulate, promote andsupport joint industrial R&Dof mutual benefit to Israeland the United States.”

Source: Yadin Rubin, Untitled (4), 2006, oil on canvas, 90X110 cm Chelouche Gallery, IL.

25

Source: 1The End of Medicine by Andy Kessler, 2006.

Health IT is critical in the process of bringing the expertise from theDoctors’ brains into technology enabling in the very long run

reduction of Health Care costs.

Medicine is a service business.One on One. Doctors hold theexpertise. It's embedded in theirbrains.1"

"There's a huge differencebetween medicine and the realworld. Almost every other industryis about R&D creating productsthat are consumed by payingcustomers.

26

The convergence of Physics and Technology with Medicine brought

for the last several decades monumental development of Medicine.

The current internet grid, spreading globally, is a major enabler.

Medicine is on the verge of joining many other

industries and become more of an

“information industry.”

Healthcare and Information Technology

27

Many of the physician decisions are information dependent:

Current lab test results compared with previous ones,

Which treatment was given in the past to the patient?

The genomic constituents of the patient and his family members.

28

•Patient to Caregiver:

Wearable sensors of all kinds

Cardiac

Glucose

Cognition

Compliance reporting devices

•Caregiver to Patient:

Medical records

Laboratory and other tests results

Health information

Two Way Communication as Aging In Place Enables Transformation

29

The BIRD Foundation, is currently funding

collaboration between an Israeli startup and a major

US Medical Center in the deployment of an operating

room decision support center.

30

Prof. Yitzhak Peterburg

Senior Visiting Fellow, Milken Institute

Former CEO, Clalit Health Services

Former CEO, Cellcom

31

Israel, an Emerging Powerhouse for Life Sciences

• Life-Sciences represents about 35% of Israel civilian research activities in its 7 universities

and 4 medical schools

• Israel has one of the world’s highest per capita ratios of scientists in life sciences, one out

of every three Israeli scientists specialized in life sciences

• Israel ranks as a top country for scientific publications per capita, almost 60% of its

publications are in Life Sciences

9.4 11

14.6 14.916.3 17.8

27.531.2

3840.2

Ireland Taiwan Russia Japan US Germany UK Finland Sweden Israel

R&D Expenditure (GDP Basis)

4.6 %Israel

3.5 %Europe

3.0 %Japan

Number of Scientific articles per $1B GDP

32

Israel’s Life Science Industry: 1997-2007 A Decade of Growth

Number of Companies Founded (898)

0

100

200

300

400

500

600

700

800

900

1000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

From 275 companies in 1997 to almost

900 companies in 2007

An average of 65 new companies being

formed per year over the last decade

Almost half of all Life Science companies

operating in Israel today are less than 6

years old , 80% in the last decade

Source: ILSI Data Base – 2008.

3333

Life Science Industry: Fast Growing IndustryYoung, Creative and Innovative Industry

Sectors Companies’ Developmental Stage

Source: ILSI Data Base – 2008.

34

Medical Device Patents per million Capita

0

20

40

60

80

100

120

United S

tatesJapan

Germany

United K

ingdom

Canada

FranceIsra

el

Sweden

Taiwan

Nu

mb

er

of

Pa

ten

ts p

er

Ca

pita

Source: www.uspto.gov. Analysis: ILSI ©:

35

Number of BioPharma Patents per million Capita

0

20

40

60

80

100

120

140

160

180

USA

Japa

nG

erm

any

UK

Fran

ceCan

ada

Sw

itzer

land

Italy

Net

herla

ndDen

mar

kSwed

en

Isra

elBel

gium

Aus

tral

ia

Nu

m.

of

Pa

ten

ts p

er

millio

n C

ap

ita

Source: www.uspto.gov. Analysis: ILSI©.

36

Life Science Patents % of Total Patents Registered

0

5

10

15

20

25

30

35

Uni

ted

Sta

tes

Japa

nG

erm

any

Uni

ted

Kin

gdom

Fra

nce

Can

ada

Sw

itzer

land

Isra

elSw

eden

Italy

Net

herlan

dSou

th K

orea

Belg

ium

Tai

wan

% L

ife

Scie

nce

Pa

ten

ts f

rom

th

e T

ot

Average

17.9%

28.3%

World average of approval in ~ 18%; in Israel ~ 28%

Source: www.uspto.gov. Analysis: ILSI ©.

37

Israeli Originated BioPharma Molecules

CompanyName

Drug Disease No. ofpatientsUS

MarketSize

Phase Sales

Johnson &Johnson/Schering

Doxil Cancer

Kaposi'sSarcoma/Ovarian

Market $533M

Serono Rebif MS 0.2million

$3B Market $1000M

Gonal F Infertility 1 million Market $500M

Teva Capoxon MultipleSclerosis

0.2million

$3B Market $1700M

Aventis Exelon Alzheimer's 4 million $3.0B Market $400M

Total $4.13Billion

38

Health IT

State of the Industry

• EHR: 100% coverage

• HIE: more than 50%

• Extensive use of clinicalindicators

• Telemedicine solutions

140 companies

• EHR/PHR solutions

• HIE

• Research infrastructure

• Production floor

• Monitoring

• Telemedicine

39

Dorit InbarHead of The New Israeli Foundation for Cinema andTelevision;VP for the Israeli Broadcasting Authority

Dorit@nfct.org.il

40

• About 14-18 full length feature films a year

• About 400 hours of T.V fiction drama a year

• About 120 hours of documentaries a year

• About 10 hours of animation a year

• Over 300 new Israeli commercials are being produced every year

Volume of Israeli Local Production

41

Co- Production

• About 3-5 co-productions of feature films a year (fiction) mainly

with Europe, Canada & Australia.

• About 5-10 co-productions of documentaries a year

42

More details…

• About 14-18 full length feature films a year

• 8 full length feature films sold abroad a year

• About 200 new feature films are imported to Israel a year

• Total number of admissions in 2007-2008 was about 9.7 million in

each year. Out of which 14% were for local features.

43

Foreign Competition

• 200 international festivals

• Over 100 international awards

• Nomination to the Oscar Award in 2008-2009

• Tens of T.V. channels around the world

44

Governmental budget for the cinema

industry is around $18 million per year

45

• Heavy regulations concerning local productions

• 8 major broadcasting organizations:

• Cable Television

• Satellite Television

• Channel 2

• Channel 10

• Channel 9 – The Israeli-Russian Channel

• Channel 24 – the Israeli Music Channel

• Public Television

• Educational Television

46

Israel’s Official Film Co-Production Agreements

The Government of Israel has signed co-production treaties with the

following countries:

Belgium France Germany Italy

Sweden Poland Canada Australia

Hungary

47

Tax Incentive Rules

• To this end, the law offers generous tax benefits that reduce the cost

of production by up to 20%

• A Co-Produced film between an Israeli production company and a

foreign production company is entitled to tax benefits of an actual

reduction of 15% in the costs of the production in Israel

48

Other Advantages

• Professional and talented personnel

• Facilities

– About 120 independent production companies

– About 10 production studios

– About 30 post production studios/ facilities

49

Budgets

The average budgets of a production in U.S. Dollars:

• The average budget of a feature film is about $500,000-$1,000,000

• T.V. fiction (drama) production has an average budget of $130,000 per hour

• T.V. series average budget is about $100,000 per hour

• Documentaries average budget is $150,000 per hour