The Bayer pharmaceutical company, a global leader in agriculture, has signed an agreement to invest $10 million in agricultural ventures in partnership with Trendlines Ltd. (SI:42T), an Israeli investment company dealing in medical equipment and agricultural technologies.
Under the agreement, Trendlines will manage the investments in the early stages and raise additional capital for the companies. The joint fund will focus primarily on development of seeds and plant protection, and invest mainly in early stage companies, although it can also consider investments in companies at a later stage. The fund will not invest in Trendlines' existing portfolio.
This model of cooperation is becoming increasingly popular among international corporations. Roche invested in Israel through the Pontifax venture capital fund, Novartis is currently looking for investments together with BiolineRX Ltd. (Nasdaq: BLRX); TASE:BLRX), and now Bayer is doing it with Trendlines.
Bayer's global leadership extends to pharmaceuticals, veterinary medicine, and agriculture. The company already has a number of activities related to Israel. Bayer has a number of R&D centers in Israel, and seeds production business in the fields of Israeli growers amounting to several million dollars in payments to the growers. According to Bayer Israel managing director Tomer Feffer, the seeds grown in Israel account for 10% of all the seeds sold by Bayer at certain times and for specific strains. Bayer also cooperates with agricultural companies Evogene Ltd. (NYSE: EVGN; TASE:EVGN) and Kaima Organic Farm. In the pharmaceutical sector, Bayer has a cooperation agreement in cancer drug development with Israeli company Compugen Ltd. (Nasdaq: CGEN; TASE: CGEN), a long-standing development agreement with Medgenics Ltd. (AIM:MEDG; NYSE MKT: MDGN) to develop an implant that emits protein drugs into the body, and a joint development agreement with Israeli developer of products for skin diseases Foamix Pharmaceuticals Ltd.(Nasdaq:FOMX).
Trendlines has founded two incubators in Israel: one for medical devices and one for agriculture. Last year, Trendlines held its IPO on the Singapore Stock Exchange, after giving up on its attempt to hold an IPO on a Canadian stock exchange. Trendlines' market cap is $84 million.
Despite Trendlines' success in building technological incubators and the fact that it has won an award from the Chief Scientist's incubator program several times, the company did not succeed this year in renewing its franchise for the Agtech incubator in the incubators program (because of the intense competition for this franchise). The agreement with Bayer constitutes a successful alternative that will provide Trendlines with the capital it needs to continue investing in innovation, and will provide the company with a view of the market from the perspective of a leading international company in that market.
Trendlines' agricultural companies, which are already posting revenues, are filters company Advanced Memtech; fishpond company Bio Fishency; and pest protection company Eden Shield, which cuts back on the odor of crops like flowers and cannabis in order to reduce visits by pests. The company has other activity at the technological development stage, including Steak TzarTzar (grasshopper steak), which makes exactly what its name indicates.
"Israel is a focus of innovation and technological development, and Trendlines brings with it a deep knowledge of the Israel scene, together with experience in agricultural investments. That is why it is such a suitable partner for us," says Bayer Global Head of Research & Development (R&D) and Bayer CropScience Excecutive Committee member Adrian Percy.
Feffer adds, "Bayer is a decentralized company, and its investments in Israel are therefore decentralized. This is the first time that Bayer is setting up a platform for early stage investments, but we have an orderly process of scouting for investments in Israel, which we are planning to expand and tell more about parts of it soon. Bayer is in second place this year in investments by foreign pharma companies in the Israeli market, including an investment in clinical trials in Israel. We regularly place in the top five in this category."
Trendlines Agtech CEO Nitza Kardish says, "Above all, I regard the agreement we have signed with Bayer as an extraordinary opportunity for Israeli entrepreneurs in the field, both those in academic institutions and others. I call on everyone to come and cooperate with us, to found the next big thing with us, and to establish agtech in Israel. I have no doubt that this is a milestone on the way to realizing the vision of an agtech industry in Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2016
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