Focus on Israel-Innovations in Medical Technology

by Dr. Rachelle H.B. FishMan

There is virtually no area of medicine to which Israeli devices have not made significant contributions. Cardiology, genetics, neurology and ophthalmology are but a few of the medical sciences benefiting from advanced Israeli technology. From neonatology to gerontology to the latest in telemedicine, Israeli scientists, universities and companies are working to benefit the entire health system, from physician, to patient, to medical administrators and insurers.

Israeli medical and biotechnological firsts include state-of-the-art surgical lasers; fully computerized no-radiation diagnostic instrumentation for breast cancer; an intelligent medical sensor that can be used to track and direct instruments to an exact three-dimensional location in the heart or other organs via a real-time virtual image; the fully flexible waveguide fiber for endoscopic surgery; unique computerized monitoring systems for critical care patients; pain-relieving transcutaneous devices; a revolutionary autoclave design to combat AIDS and other infectious diseases; and many more.

Three of the biggest commercial plays were scored in medical devices and technologies: ESC and Laser Technologies merged into one company, valued at one billion $US. Medinols cardiac stent was purchased by agreement with Boston Scientific Corp.; and Biosense Ltd. was purchased by Johnson and Johnson, each in deals closing at about 400 million $US.

The most important resource in Israel is its human capital, including the flood of Russian-speaking scientists, engineers and programmers, who immigrated in the 1990s from the former Soviet Union. Many of them excel in maths, physics, material sciences and medical electronics.

In addition, over the years, close cooperation has developed between medical research institutions and industry. This cross-fertilization has bridged the once impenetrable gap between basic and applied science and has made it easier for innovative technology to arrive at your doctors office. Few today would argue against the rapidity of advancements by medical manufacturers, based on the most updated research and development that has taken place in the countrys universities and research institutes.

Each of Israels universities and research institutes has established its own research authority. These authorities assist professors in finding, applying for and administering grants and funding for their research. Each has generated a commercial limb that also initiates investor searches, helps private launches, assists commercial exploitation of research by drafting and filing licensing agreements, actively guides technology transfer and encourages patenting of new discoveries before they are submitted to peer-reviewed journals, to prevent the current worry publish and perish.

Thus these research and development enterprises give the universities a chance to profit from and reinvest the fruits of their research by working through subsidiary companies while at the same time increasing the potential for new development in industry. For instance, medicine and medical equipment are the dominant start-up sectors at most Israeli universities and at the same time provide the technological expertise for most of these industries.

Ben Gurion University of the Negevs Ben Gurion Negev Technologies and Applications Ltd., for example, offers support in both medicine and bioengineering. It has pioneered the Neuromedical Electrical Stimulation Systems Ltd. (NESS), a glove-like device that can stimulate movements in a paralyzed hand or arm. Another commercial innovation is the Savyon Diagnostics rapid diagnostics kit for fungal infections.

Bar-Ilan Universitys Bar-Ilan Research and Development Co. Ltd. spawned Medis El Cell Scan an advanced electro-optical blood cell sorting device to diagnose and detect early stages of cancer.

Hadasit Medical Research Services and Development, an enterprise of the Hadassah Medical Organization Ltd., in Jerusalem, has facilitated innumerable licensing or joint ventures in cancer therapies, osteoporosis, diabetes, cardiovascular disorders, orthopedics, diagnostics, medical devices and laser technologies.

In 1966, The Technion Israel Institute of Technologys Technion Research and Development Foundation, founded Elbit Ltd., as a start-up company, considered the original progenitor of the medical device industry in Israel. Today, it is a giant healthcare and diagnostics conglomerate with sales of 970 million $US annually.

Tel-Aviv University Ramot, with its Rad-Ramot high-tech incubator in Tel Hashomer Hospital, has generated several start-up companies. The now well-established Orgenics Diagnostics Ltd., produces ultra-high sensitive and fast diagnostic kits, and recently merged with American giant, Selfcare Corp. Another younger success is Combact which has a unique technology for rapid bacterial analysis.

Established in 1959, Yeda Research and Development Ltd., of The Weizmann Institute of Science, pioneered the concept of pure research benefiting from its own applications. It has spawned thousands of successful medical technology initiatives.

Yissum Research Development Company Ltd., of The Hebrew University of Jerusalem was established in 1964. In 1997, it signed 130 contracts, half of them with companies abroad. One of its products is a tiny, biodegradable chip developed by the Faculty of Dental Medicine, which treats gum disease by slowly releasing chlorhexidine. It was acquired by the local conglomerate Israel Chemicals and is now valued at 140 million $US.

To avoid missing out on rapid developments across disciplines, and to keep from becoming too competitive with each other, the autonomous university research authorities formed an alliance, FURAD (Forum of University Research Authority Directors), that pools and strengthens their technological and administrative resources. FURAD helps to assure that the Israeli academic community responds to rapidly-evolving changes in the research funding environment, both in Israel and abroad, and stays in touch with the networks of regional and global partnerships (with the European Union, for example) and interdisciplinary research projects. Jointly, the Research Authorities maintain and update a comprehensive national database of Israeli academic research and development, lobby government ministries for funding, expand global partnerships, and contribute to and implement national scientific research policy.

The government is also actively involved in the medical technological sector. Nearly half of the approximately 200 nascent technologies under development in government supported incubators are medical technologies, not to mention those in biotechnology and software.

Magnet, a program of the Chief Scientist of the Ministry of Industry and Trade, has a five-year budget of over 200 million $US to support carefully targeted generic technologies or pre-competitive concepts, such as electro-optics or biomedical diagnostics, by coordinating groups of academics and businesses.

Healthcare and medical technology especially electronics has been identified as the most promising growth sector by the Healthcare Department of the Israel Export Institute. Partner to making that possible is the business and marketing effort of the 24 American-Israel Chambers of Commerce, first created in 1953, and Associated in 1993, representing over 3,000 American business and professional members, based largely in Minnesota and in the Chicago and Boston areas.

Growth of medical technology depends not only on insights and ideas, but on proof through rigorous testing for safety and efficacy. Speed, not haste, is the motto when weighing public health needs versus public health protection.

Testing of devices is controlled by the medical device assessment department in the Ministry of Health, which over the years, has adapted a process which corresponds with that of the U.S. Food and Drug Administration (USFDA). This harmonization allows laboratory, animal and clinical (those involving human beings) studies conducted in Israel to qualify as proof for approval, as if they were conducted in the U.S. The result is a streamlined approval process and a shortcut to marketing Israeli medical technology in the U.S., making healthcare delivery more efficient and up-to-date. The USFDA recently modified its procedures to make the approval process more efficient by actively guiding inventors and researchers in formulating their testing protocols to meet USFDA licensing demands; thus, the focus was shifted from a test of the trials to a test of the products themselves.

In contrast, Israeli government regulations require only those medical devices which release radiation, contain components derived from animal sources, or are coronary stents, to have ministry approval for marketing in Israel. Expanded legislation to empower the Ministry of Health to examine and/or approve all medical devices is currently being formulated and is expected to be in effect by the turn of the century.

Israels system of ethical standards, established to meet international criteria following the Helsinki agreements, is exacting. Proposals to initiate clinical trials, for instance, must be reviewed by a system of ethics committees, which convene in every hospital and medical institute. Considerations are based on ethics, moral and religious implications and social impact, as well as on health and safety grounds. Examples of the complex questions the committees might ask could include: Could a new contraceptive device be used to abort as well as prevent pregnancy? or How would technology to determine brain death which often occurs before the heart stops beating affect declaration of the moment of death and thus, decisions about when organ donations may be made?

Technological growth is geometric, not linear, with one industrys previous inventions spawning new developments in another. This trend comes into play, for example, with medical technologies which have profited from previous developments in the electronic defense industries. Opgal Medical Systems, a subsidiary of El-Op Electro-Optics Industries Ltd. in Nes Ziona, specializes in thermal imaging, remote sensing, lasers, and displays. Opgal Medicals IVA-2000 Thermal Imaging System for cardiac surgery is based on thermal coronary angiography (TCA), a technology originally developed for military uses like night vision and heat-seeking surveillance. The improved accuracy in angiographic imaging, and in image storage improves decision-making in the surgical operating theater and benefits the entire health system, from physician (user), to patient (consumer), to medical administrators and insurers, and back to the patient (consumer). Medical insurance costs have been reduced because the number of re-do operations is significantly reduced: the system documents the procedure, reducing malpractice insurance; operating theaters are freed; and the reduced recovery time from minimally invasive procedures cuts bypass costs by half.

Once a device is created, its use during applications invariably spins off other developments. A new thermal sensor, invented at the Jerusalem College of Technology, for example, makes thermal imaging readings more precise during an angiogram. The sensor will be incorporated in the next generation of the OpGal line of products. Applications in ocular surgery, neurosurgery, peripheral vascular surgery, cancer detection, and dialysis control with this device are under discussion in Europe, the U.S. and Israel.

Economic forecasts indicate a bright future for the biotechnology and biomedical sectors in Israel. The medical technology and devices sectors stand out with the highest growth of any sector during the late 1990s. No fewer than 40% of the 1,500 start-up companies in Israel are in the medical and life sciences arena, with no indication of a slowdown well into the next millennium, according to a survey conducted by the Science and Technology Forecasting Center at Tel Aviv University. By the year 2003, forecasters say, Israeli biomedical and biotechnology industries will have sales of 1.8 billion $US, almost six times the sales in 1997; and investment in this sector will grow to 430 million $US in the year 2000, and to 980 million $US in 2003. During this time, the number of expert workers in the industry will increase to 3,400, a nearly three-fold increase in six years.

According to Ernst & Young, investment analysts, the very best prospects for the industrys growth, are in the medical devices, bio-electronics, diagnostics and smart drugs sectors. Pure biotechnology, on the other hand, requires greater investment and a longer development time more than twice the two-to-four-year average estimated development time for medical devices.

The international accounting firm, Kesselman & Kesselman PricewaterhouseCoopers showed in their Money Tree Survey that the average medical devices sector venture capital investment increased in 1998 by 42% to 2.2 million $US from 1.5 million $US in 1997, with most medical device-based companies located in Haifa and northern Israel. Despite the 4th quarter slowdown, 1998s 91 million $US in venture backed investment was a massive 86% increase over the previous year, continuing a trend started in the mid-1990s.

In spite of the need to overcome seemingly insurmountable odds, such as distance, language, cultural differences, and fluctuations in the continuing peace process, Israel has become a prime site for international venture capital and technology-seeking funds, especially since the beginning of the 1990s. Since 1992, more than 50 venture capital funds are investing in medical technologies, raising nearly 1.5 billion $US, about half of which was invested within six years. Medica Investments of Medica Venture Partners, like the private Medmax, is a unique fully-dedicated healthcare fund. Because of the high expertise and longterm view, Medica takes a pro-active brokering interest in the business and the science in all of the 11 biotech and medical device investments in its 15 million $US portfolio. Interest in Israels medical technology by giant multinationals like Bristol Myers-Squibb, General Electric, GEMS (General Electric Medical Systems), Johnson & Johnson and Siemens has grown increasingly competitive as Israels reputation for high-tech innovation and ingenuity spreads. More industry is being developed locally, for example ELGEMS, a joint venture formed in 1997 with Elscint, for the design and manufacture of medical imaging products.

During 1995-97, Israels healthcare exports spiraled upwards from 623 million $US to 990 million $US. The electro-medical equipment sub-sector made the largest contribution to the industrys growth during this time, accounting for a full 59% of total exports, followed by pharmaceuticals and chemicals; biotechnology and diagnostics; and medical supplies.

BIRDF, the U.S.-Israel Binational Industrial Research and Development Foundation, matches Israeli high-tech companies with strategic partners in the U.S. Instrumental in establishing the commercially successful Israeli electronics, communications, and software sectors, BIRDF recently prioritized new biomedical technologies and the links among the biosciences and electronics and computer sciences. And BIRDF is not alone. Recognizing this new and emerging realm of endeavor, in April 1998, a joint seminar of BIRDF and BSF, the U.S.-Israel Binational Science Foundation, focused on three spheres that combine the expertise of cell physiology, electronics and biomedicine: bio-chips and gene-chips; bio-sensors and neuro-sensors; and nanotechnology.

Whatever the means of development or method of marketing, locally or internationally, with or without foreign partners, medical devices need special expertise for patent protection before they venture out of the laboratory. Israel has special skills in this area too, boasting some 100 active patent attorneys. The primary protector firms are Luzzatto & Luzzatto, Reinhold Cohn & Partners and Dr. Mark Friedman Ltd., which, since arriving just five years ago, handles more than 50% of all new high-tech patent applications actually written and filed in Israel.

The Achilles heel of the medical device, diagnostics and biotechnology sectors is its youth and the commensurate lack of managerial experience. But help is on the way.

The Israeli Biotechnology Organization, an industrial arm working in cooperation with the Israel Manufacturers Association, is trying to re-import managers, i.e., to convince Israeli executives working in successful biomedical companies in the U.S. to participate in an advisory and teaching capacity in Israel. A similar effort to fast-track management is being made in the U.S. The U.S.-Israel Biotech Committee (USIBC), a nonprofit Washington, D.C. organization, has set up a Directors Program to encourage qualified Israeli administrators and U.S. industry veteran directors to serve as board members for young Israeli start-up companies, matching them according to need and expertise.

Another innovative means to infuse good management skills is to interface young high-tech companies with an entirely new industry in Israel: high-tech management companies, offering skills in building management staff and creating management strategy in combination with investments or strategic partnering. The addition of clinical research organizations has facilitated the work to get medical developments through the regulatory channels.

Management of Israeli medical technology means marketing its products internationally. Being connected to the market, sensitive to market needs, and also being able to persuade public opinion shapers to adopt innovative technologies are challenges facing the new companies. Partnering at the right moment is the key to success, but Israeli high-tech companies have not done this as much as they could have.

Some medical technology firms tend to sell their technologies to international investors at an early stage, rather than risk going on to develop a larger company that would bring foreign currency into the country. The concern is that if Israel becomes an R&D laboratory of the mega-conglomerates of the world, the country, from a national standpoint, is getting the minimum rather than the maximum value per engineer a pre-marketing company brings in 10 percent of the profits a company with customers can obtain. Worse still, investors who buy companies at the technology stage tend to identify the key people and persuade them to leave Israel. But sometimes, the only way a smaller niche product in the development stage will ever reach the market at all, is to sell out to a bigger and more experienced company.

More and more companies are convinced of the value of retaining R&D in Israel. Multi-billion dollar Siemens AG recently singled Israel out, next to the U.S., as a target for high-tech cooperation plans with future potential. More than 50 Israeli companies, including many start-ups, produce many of the companys components.

Another multi-billion dollar mega-corporation, General Electric Medical Systems (GEMS), has invested several hundred million dollars in business ventures and acquisitions in Israel, setting up a local umbrella company to focus on imaging, ELGEMS. GEMS has established two global Centers of Excellence for advanced applications development of Magnetic Resonance Imaging and for Nuclear Medicine products, hoping to propel the company into the number one spot in radiation and imaging worldwide.

Some of the other international companies currently conducting business with Israel include Imagyn, Johnson & Johnson, Pfizer, Purotec International, Univision Technologies and Uro-care Laboratories.

In the international arena, shared device testing can aid peace efforts as well as medicine. The Heart Knows No Borders project has effectively formed a network between Jordan, Israel and the Palestinian Authority for testing two cardiac devices invented in Israel.

In 1996, two giant American medical device companies with their Israeli developed products, Medtronic Vascular-Instent and Scimed/Boston Scientific-Medinol, met with the U.S.-Israel Science & Technology Commission, and the Devices Branch of the USFDA, to discuss funding a proposal that would improve patient recruitment for investigational device evaluation (IDE) clinical trials, and at the same time, reap a peace bonus by joining professionals and patient populations in the Middle East.

Submitted by the Duke Clinical Research Institute, the proposal would combine patient recruitment into trials of the Medtronic/InStent beStent-crimper combination and the Medinol/Boston Scientific NIR 5-cell Primo stent for small vessel stenting. By making patient characteristics sufficiently different conflict over competitive recruitment of patients into each protocol is avoided and can actually help shunt into each others trial inclusion groups.

Ten interventional cardiology sites in the region and in the U.S. are participating in the studies, including the Rappaport Faculty of Medicine, the Technion-Institute of Technology at the Rambam Medical Center in Haifa, the Heart Institute at the Shaare Tzedek Hospital in Jerusalem, the Queen Alia Heart Institute-King Hussein Medical Center and the University of Jordan.

Equally important, a pilot test of the potential of transmitting digitized angiographic images in parallel with standard cine film image analyses is being assessed for speed and accuracy at the Washington Heart Center, a leading U.S. laboratory. If paperless data analysis can be proven, this sub-study would revolutionize angiography, another aspect not lost on the USFDA. Devices and medical products are becoming global, moving in international commerce between countries, a challenge that USFDA has been addressing more than in previous years. Paperless case reporting would significantly improve international harmonization and standards while saving resources.

By encouraging neighboring nations to work together, the Heart Knows No Borders project facilitates the solution of shared common problems, collective public health priorities that can best be addressed by cooperative efforts...[and is] a healthy way to normalize relations, said Shimon Peres, former Prime Minister of Israel, founder of the Peres Institute for Peace, who was instrumental in bringing the project to fruition.

In other areas of biomedical research, the U.S. National Institute of Health (NIH) has granted funds for projects in Israel ranging from angiographic research to X-ray crystallography. Sometimes, new procedures can be developed more quickly in Israel to the benefit of all patients.