"Attack is the best form of defense," history supposedly teaches us, "for if you attack, the other side is forced to defend." This applies particularly to the culture that has developed in Israel since the state was founded and wound up being run by the people least qualified to do so. There can be no such thing as a situation in which we, the Israelis, are guilty of something. The first refuge is always anti-Semitism. The alternative is anti-Zionism.
A foreign investor comes along, and examines and compares investment possibilities around the world. He makes his examination and comparison in Israel too, and eventually discovers that Israel is the most worthwhile place for him to invest. He believes that here is where he will derive the greatest profit.
The investor passes through the whole legal Via Dolorosa, and ultimately the investment is made and is a success. At this stage he wants to invest again, and this time he sees that it would be more worthwhile for him to invest in India. The moment he decides, on business grounds, that he is transferring to India, in Israel he becomes a thief, a swindler, a con man, and all the other terms of endearment we have invented for people of this sort. Had the same person begun development in Israel, latched on to every available form of state support, and then sold the fruit of his development to Cisco for $100 million, he would have been considered a national hero.
This is the story of Swiss company Serono, its entry into Israel, its decision to leave, and the closure of its facility in Ness Ziona. Serono's management (now practically considered anti-Semitic), unlike other overseas company managements, those in which Jews are involved, was the only foreign management to enter Israel because of the know-how to be found in this country, and not out of Jewish or Zionist-inspired motives. The late Fabio Bertarelli, father of current Serono CEO Ernesto Bertarelli, became enthusiastic about the know-how he found at the Weizmann Institute in the 70s of the last century and decided to invest in Israel. The decision came not because of Interferon, which gave rise to the multiple sclerosis drug Rebif, which now competes with Teva's Copaxone. It was rather because of the ability of a professor by the name of Bruno Lunenfeld, in whose laboratory a breakthrough was made in the enhancement of women's fertility, an area in which what was then Ares-Serono had specialized for many years. Professor Lunenfeld, together with his then assistant Dr Aliza Eshkol, developed a way of using material extracted from the urine of post-menopausal women for encouraging fertility in infertile women.
Fabio Bertarelli came to Israel with his son Ernesto and others, and joined up with Professor Michel Revel, himself a genius who made his name with Interferon, and a company was set up called InterPharm Laboratories. Israel Makov, who now heads Teva, was CEO. Makov was well acquainted with the Weizmann Institute and the people who worked there, and my assumption is that Bertarelli sought a businessperson to lead the operation because, with all due respect, and brilliant as they may be, there are few professors capable of running a business. Israel Makov brought with him his deputy from Abic, Eitan Harduf, also a salesperson who specialized in medicine and biotechnology, and that in fact was the beginning of InterPharm as we stock market players got to know it in the 80s.
Investment under Israeli law
To the best of my recollection, Serono invested $1.5 million out of its own pocket (which, outside of the US, was a very serious sum for high-tech investments in those days), and the Chief Scientist also invested $1.5 million, out of our pockets. That was the company's initial capital, and this took place in 1978, a time when the only real investments in Israel were in the textiles industry, all in underhand ways.
Bertarelli put his hand in his pocket and invested here, and, in accordance with Israeli, not Swiss, law, he was then entitled to 50% of the total investment from the Chief Scientist, who approved the project. The zealots forget to mention that Serono transferred the production line for the growth hormone from Switzerland to Israel. This was InterPharm's only revenue source at that time. Makov persuaded Dr. Avri Havron to come from the US to manage the project of exploiting the growth hormone.
In 1981, InterPharm was floated on Nasdaq in one of the hottest IPOs of those days. The company raised $6 million. It brought the money to Israel, not Switzerland, a contribution that it is very important to remember. Moreover, since 1978 Serono-InterPharm has been considered an extremely important employer in the Ness Ziona area. I won't go into the machinations and stock market tales surrounding how the company went from being public to being private, but one thing can be said for sure: nothing illegal or detrimental to the State of Israel was done at InterPharm, and nothing was stolen from here, because what was taken out of Israel wasn't Israel's when it was taken out but the company's.
The finale we are now seeing is the usual Israeli uproar about Serono, which is removing its facility from Israel for precisely the same reason that it came here: because it makes business sense. True, one feels sick at heart about it, but we can't blame Bertarelli the son or his advisers. In the world that Minister of Finance Benjamin Netanyahu aspires to, that's how things work: if it's economically worthwhile, you come; if it isn't, you don't come or you leave. Who is to blame if not us? Please ask the Minister of Industry, Trade and Labor why Serono didn't get the grant it applied for. Unless I'm mistaken, it was a matter of $60 million, and I heard that Ernesto Bertarelli came here to try to persuade the authorities to approve the grant, and failed. Just don't tell me that he didn't deserve it.
In the end, in the case of InterPharm, both sides should be happy. Serono admits that it's happy, and even says it will continue looking for pearls in Israel. And the state? Why should the state be happy? The state is never happy about anything, which is why we read about former senior officials claiming that InterPharm screwed Israel and so on. The goyim from Switzerland didn't screw anybody; the Jews from Jerusalem shot themselves in the foot, and they even enjoy the fact that they can carry on mudslinging. They've shot themselves in the foot so many times that it has stopped hurting and become a habit.
The media's share
This may not be the right example, but the US taxpayer gave the world the internet for free, and the genome map for free, and lots of other things too. Is anyone in the US claiming they were swindled? Ask any businessperson, industrialist, or anyone who really knows how to run things, what they think should have been done, to give InterPharm the grant or let them go. I challenge you to find me even one person who would say, let them go. The problem is that here no-one ever asks anyone who understands business.
The media also have a share in what goes on. We praise to the skies those entrepreneurs and technology developers who from time to time manage to sell their developments to the Ciscos of this world. The management at Cisco and at the other companies mock us in their hearts but encourage the trend. Why not? As long as Israelis carry the sellers of technologies shoulder high, "the idiots" across the ocean will exploit this to their benefit.
Published by Globes [online] - www.globes.co.il - on September 28, 2004