BioBoost, a consortium of OrbiMed Advisors LLC, Johnson and Johnson (NYSE: JNJ) and Takeda Pharmaceutical Co. Ltd. (TSE: 4502) has won the tender to establish the life sciences incubator as part of the Office of the Chief Scientist's incubator program.
The franchise for the biotech tender, like the franchise for all incubators since the reform, is for eight years. The consortium members will receive NIS 6.9 million in financing over three years, more than franchisees of incubators in other fields, as part of the government's wish to provide special support for the life sciences. Most of the incubator's companies will develop drugs, and a few will develop medical devices.
BioBoost beat a consortium of Minrav Holdings Ltd. (TASE: MNRV) and AstraZeneca plc (NYSE; LSE; OMX: AZN). The threshold condition for establishing the incubator was a big pharma company as one of the franchisee's partners, together with a financial partner. BioBoost includes two big pharma companies, one of which, Japan's Takeda, has no operations in Israel.
Orbimed Israel senior managing director Dr. Nissim Darvish said, "The intention is to create a network of companies, each of which stands on its own, but will have ties between them. We are not limiting ourselves to any field, especially not fields in which Johnson and Johnson and Takeda operate. We are aiming for companies that will make money. The incubator is not designed to fill the corporations' products pipeline."
As for follow-on investments in the portfolio companies, Darvish said, "We will not let the companies that graduate from the incubator enter the 'valley of death'. Each of the incubator's partners has already allocated a substantial amount to support the good companies, after three years at the incubator. We cannot disclose the amount, but if the Chief Scientist demands x, we'll double or triple it."
Under the tender's terms, the Chief Scientist required an investment of at least NIS 50 million, which means that BioBoost's partners have promised at least NIS 100 million in follow-on investment in the companies.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2013
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