Israeli Moves To Boost Health And Biotech Sectors

Recent months have seen a number of proposals by Israeli governmentministries and officials which suggest that the country's capabilities and needs in the health care and biotechnology fields are beginning to receive long-overdue recognition.

Science Minister Michael Kitan is investigating the possibility of establishing a venture capital fund for the biotechnology industries. Prime Minister Benjamin Netanyahu has given approval in principle for a $100 million fund, for which the government would provide 20%, the rest coming from private investment groups.

Such a fund was recommended by a Ministry-appointed team of experts, chaired by Pharmos' chief executive Haim Aviv and including Biotechnology General chief executive David Hazelkorn, to discuss incentives for biotechnology firms. The timetable for establishing the fund has yet to be determined, and the Ministry will have a hard time convincing the Treasury. Also, the Minister for Industry, Commerce and Trade has expressed interest in the financial and industrial implications of funding R&D in this area. If Mr Kitan does raise resources for the fund, he has to find a suitable structure that does not conflict with privatization, a main plank of government economic strategies. One solution would be for an existing government holding company to siphon off the money to private investment funds.