Pitango's Ruti Alon urges more gov't biotech funding

The Pitango general partner claims the biotech industry needs over $3 billion.

"I ask myself, what are the prospects for tomorrow? Where is the next generation of the Israeli biotech industry? How do we build an industry here?" said Pitango Venture Capital general partner Ruti Alon yesterday during a panel on "Trends and Targets for the Israeli high-tech industry" at the Ra'anana Conference for National High Tech Policy. Alon, who oversees the firm's investments in biotech and medical device companies, was commenting on what she claims is a lack of funds for investment to help start-ups in the field grow.

Alon said that according to a simple calculation she made, it takes between $50-70 million in investment to penetrate a new product into the healthcare market. "If you take the 500 companies in the medical device sector and want 10% of them to succeed, you would need $2.5-3.5 billion over the next five to seven years. This will requires us to invest, on average, more than $500 million a year, most of which comes from venture capital funds. If we need to find this amount every year to push this activity forward, I think we face a serious economic problem."

According to Alon and the other participants, the solution is funding from government budgets. Chief Scientist Eli Opper, another panel member, who strongly supports the selling of start-ups to foreign companies, expressed his dismay at the lack of a pharmaceutical industry in Israel. "If you look at the output in terms of biotechnology, we barely have an industry," he said. "We are not short of manpower in these fields, but some graduates want to make a future for themselves overseas, since there's no work for them here. So we need to invest in the building of a life sciences industry in Israel."

Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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