Dear Friends, April Edition

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Vernon Leonard
6 years ago
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These firms have the important role of turning promising ideas generated by the University s renowned researchers and students into IP protected patents and commercial products.

1 April Edition Dear Friends, An investment in knowledge pays the best interest, said the late Benjamin Franklin. Israel was one of the first countries to adopt this concept and encourage researchers to collaborate with the business community to establish academic knowledge commercialization companies. These firms have the important role of turning promising ideas generated by the University s renowned researchers and students into IP protected patents and commercial products. This month, we interviewed Yaacov Michlin, the CEO of Yissum, the Hebrew University s technology transfer company; along with Yissum s VP of marketing Dana Gavish- Fridman. They spoke about the art of turning scientific ideas into blockbuster drugs or multibillion dollar technology companies. The Hebrew University is also featured in other sections of this edition of Doing Business in Israel, as being involved in the biggest exit in Israel s high-tech history, and also in creating an innovative technology that uses mobile phones as cutting edge x-ray machines. Our cultural bite brings a taste of another world renowned academic establishment the Clore Science Garden at the Weizmann Institute in Rehovot, which is the first open-air science museum in the world. I hope the warmer weather has put a spring in your steps. As always your feedback is most welcome. Jonathan Lavender Head of Markets KPMG Somekh Chaikin, Israel jonathanlavender@kpmg.com

2 Table of Contents Doing Business in Israel April 2017 Latest Transactions Focus Area Israeli Innovation Cultural Bite

3 Latest Transactions The Biggest Exit in Israel s History: Intel Acquired Mobileye for $15 Billion Led by Amnon Shashua, Mobileye developed a camera-based technology used for warning of road hazards. Today Mobileye is working with many of the world s biggest auto manufacturers to pave the way for autonomous cars and trucks. China s Midea Bought Servotronix Midea, a Chinese robotics and electronics giant, has acquired control of the Israeli automation solutions developer, a company valued at $170 million. Servotronix develops automation solutions focused on motion control for a diverse range of industries and has subsidiaries in Germany and China. Kalytera Bought Israeli Cannabis Company Talent Biotech The Canadian therapeutics firm will pay more than $10 million for the Israeli GvHD treatment developer. Talent is a privately held company that evaluates the use of CBD to prevent and treat Graft versus Host Disease (GvHD) - which sometimes arises following hematopoietic stem cell transplantation. Israel s Wix Bought Online Design Community DeviantArt In its first overseas acquisition, Wix, which helps small businesses build and operate websites, paid $36 million for the Los Angeles-based online community for artists and designers. DeviantArt has more than 40 million registered members and over 325 million pieces of original art Apple s Fourth Israeli Acquisition U.S. tech giant Apple has bought Israeli startup RealFace Technology, a leading developer of artificial intelligence based facial recognition technology. The deal is estimated to be worth a couple million dollars.

01 Focus Area Scientific Excellence Goes Hand-In-Hand with Commercial Viability For the past 53 years, Yissum, the Hebrew University s tech transfer Company, has been bringing brilliant ideas from

4 01 Focus Area Scientific Excellence Goes Hand-In-Hand with Commercial Viability For the past 53 years, Yissum, the Hebrew University s tech transfer Company, has been bringing brilliant ideas from the lab to the market. From cancer drugs to nano-materials, Yissum s CEO explains why creating the right academia-industry partnerships is a win-win game for all parties involved Turning knowledge and science into money is a rather intricate task. That is where university knowledge commercialization companies come into play. They assist by licensing and patenting the discoveries and inventions made by the researchers and partnering with commercial partners, and allow universities to cash in on their intellectual power. Yissum, the knowledge commercialization company of the Hebrew University of Jerusalem, is one of the pioneers in the area of academic technology transfer. Founded in 1964, it was in fact the third company of its kind established in the world (after Wisconsin University s WARF and Weizmann Institute s YEDA). Our initial goal was to take the knowledge, inventions and

5 We basically see the university as a huge R&D operation. Since Israel has such an elaborate entrepreneurial ecosystem, the atmosphere in the campus enables scholars to be both researchers and entrepreneurs. discoveries that come out of the Hebrew University s labs, give them proper Intellectual Property protection and turn them into products - medicine, seeds, nano-technology, software technology, algorithms etc. by partnering with commercial companies, says Yissum s CEO Yaacov Michlin. Besides the great benefit to the public, another important by-product is the additional money for academic research. During its 53 years of operation, Yissum has registered over 9,820 patents covering 2,750 inventions; has licensed out 880 technologies and has spun-off 120 companies the biggest superstar among them is Mobileye, who was recently sold to Intel for $15 billion. Products that are based on the Hebrew University s technologies and were commercialized by Yissum generate today over $2 billion in annual sales. This delicate match-making between science and business generates an average of new startups a year, as well as dozens of licensing deals and partnerships with commercial companies. We basically see the university as a huge R&D operation, says Dana Gavish-Fridman, VP Marketing at Yissum. Since Israel has such an elaborate entrepreneurial ecosystem, the atmosphere in the campus enables scholars to be both researchers and entrepreneurs. It might look trivial against the Israeli backdrop, but it is very different in most other parts of the world, where universities stay away from dealing with patent licensing. Delegations from many countries visit here to see how we do it, says Gavish-Fridman, the university president tells them in a very straightforward manner, that scientific excellence can actually go hand-in-hand with commercial viability. Twenty years ago this situation would be considered science fiction. On their mission to find the best partnerships between science and business, Yissum s staff works in two main channels: 1) regularly tracking the university researchers work for projects that might raise interest in the industry, as well as 2) maintaining strong relationships with the business community in Israel and abroad and dealing with numerous collaboration requests from the industry. Gavish-Fridman explains: After the company makes the initial investment, we give them the license to develop the technology. They maintain close contact with the researcher that sometimes even becomes one of the company founders. It s a worthwhile endeavor for companies. Not only do they get access to the brightest minds, the expenses are also by far lower than doing the research in-house our by outsourcing. Among the many areas of expertise within the Hebrew University s applicable science departments, most of the patents come from the areas of pharmaceutics, healthcare and biotech. Two examples of big market blockbusters drugs that were developed in the Hebrew University s labs are Exelon (for the treatment of confusion and dementia related to Alzheimer s and Parkinson s disease) and Doxil (anti-cancer chemotherapy drug). Sometimes we make only one of the components in the product, like with Nano-Dimension s 3D printers, says Gavish-Fridman. Nano-Dimension has developed a revolutionary technology that enables 3D printing in-house by using printed circles based on Nano-Ink developed by Professor Shlomo Magadassi from the Hebrew University. This printer could not have existed without this component, and we receive royalties from the sales. According to Michlin, who will soon be stepping down from his position as CEO after 8 fruitful years, the biggest challenges for taking these developments to the marketplace in Israel is the small number of early-stage investors. Our market has so much supply of early-stage technologies but not enough good candidates to take on the initial investment. In order to boost the lab-to-market process, Yissum created three internal funds, each one specializes in different research area. These funds have private investors that not only benefit from our pool of technologies that enable them to spread the risk and increase their ROI, but they also get the right of first investment for future pipelines. They receive first access to review the new technologies and turn them into startups. Michlin emphasizes that Israel s dominance in Biotech, Agrotech and Advanced Materials is exceptional in the global scene both in academic research and market products - especially for such a small country. The combination of a strong academy and solid tech transfer capabilities creates a fertile ground for seed stage companies. They both agree that the best part of it all, is to see the large number of students that are hired by the partnering companies and startups. They are the ones who know these technologies up close and this is one of the great perks you get from tech transfer.

6 Academic Knowledge Commercialization in Israel 50% of governmental investment in R&D is directed towards academic research 8commercialization companies associated with research universities 509 patent applications filed by commercialization companies 98% of revenue from sales of intellectual property and gross royalties were from the companies associated with universities NIS 1 Billion royalties generated in a year by Israeli technology transfer companies Source: The Israeli Bureau of Statistics

02 Israeli Innovation A Breakthrough Technology that Turns Smartphones into X-ray Machines Dr. Ori Katz from the Hebrew University of Jerusalem is turning our smartphones into high-end x-ray machines.

7 02 Israeli Innovation A Breakthrough Technology that Turns Smartphones into X-ray Machines Dr. Ori Katz from the Hebrew University of Jerusalem is turning our smartphones into high-end x-ray machines. The invention Dr. Katz is developing in his Advanced Imaging Lab is a revolutionary new light-based technology that will eventually provide us with the ability to see through semi-opaque surfaces without being exposed to radiation projected by large x-ray machines. The technology is based on analyzing the scattering of the light. Dr. Katz discovered that even though scientists always claimed that light scattering is random, light can actually give a lot of significant information and help us look deep into important objects, such as the human body. This new way of using light to see through surfaces like frosted glass or skin (considered a semi-opaque surface) has the potential to not only provide better microscope images, but also help diagnose diseases in a noninvasive way. This technology is based on a careful and proper analysis of the correlations within the image. For example, Dr. Katz and his team took a photo of an object hidden behind a frosted glass window using a smartphone camera. The image showed the light that came out form this object, and by analyzing the correlations they managed to retrieve its shape. Dr. Katz s vision for this new technology goes beyond the medical world to fields like security, where it can be used for tracking down thieves, for example, by observing the way light bounces off the walls. Source:

03 Cultural Bite The Clore Garden of Science at the Weizmann Institute The Weizmann Institute in Rehovot is not only a world renowned academic establishment, but also home to the first open-air

8 03 Cultural Bite The Clore Garden of Science at the Weizmann Institute The Weizmann Institute in Rehovot is not only a world renowned academic establishment, but also home to the first open-air science museum in the world. The Clore Garden of Science is a Museum where visitors are encouraged to touch, experiment and play with every exhibit that they come across; and there are over ninety of them. While strolling along the 800 square meters of green lawns, this hands-on science museum demonstrates the scientific principles behind many natural phenomena (waves, motion, rainbows, gravity, solar energy etc.). In order for the exhibits to come to life, the visitor is required to twist, push, bounce and piece them together. You can investigate the park independently or join one of the guided tours in small groups. Visitors are welcome to spend an entire day in this relaxing environment, and even have a picnic with food and beverages brought from home. The Clore Garden gained international fame when it was awarded the 1999 Award for Innovation by the Association of Science-Technology Centers (ASTC) in partnership with BBH Exhibits, Inc. We are sure children will enjoy it tremendously, and adults even more.

Technology transfer industry shows gains

Technology transfer industry shows gains in patents filed and granted, university-created startups and commercial products; slippage in federal research funding cited Highlights of AUTM s Canadian Licensing