Israel's govt to invest $80 million in biotech fund

Israel's Ministry of Finance and Office of the Chief Scientist has published the tender for the government biotechnology fund, announced six months ago, which shows that  the government will invest $80 million in the venture, reports the local business newspaper Globes.

Sources involved in the tender said that a study by the Ministry of Finance and Office of the Chief Scientist found that the government investment could be leveraged four-fold. Previously, the fund's organizers mentioned two to three-fold leverage, and capital markets were skeptical about the target.

The tender is slightly different from the call for proposals published two months ago, as well as from the original format defined for the biotech fund. The main difference is that the fund's manager will have to invest $75-$100 million in pharmaceutical and biotechnology companies, says Globes. The fund manager will be able to investment the balance of the fund in life sciences companies, including medical devices companies, at its discretion. The original breakdown called for at least 75% of the fund to be invested in pharmaceutical and biotechnology companies and only 25% in medical devices companies.

The deadline for candidates to submit bids for managing the biotech fund is February 9, 2010, and the winner will be announced on March 1. The preferred candidates are venture capital funds or holding companies. Pharmaceutical companies with more than $500 million annual revenue may not participate in the tender, the newspaper noted.