Kibbutz Hatzerim is known for irrigation technology company Netafim, which was founded in 1965 and was an Israeli and global agritech pioneer. In 1990, the kibbutz started a new business growing jojoba and producing jojoba oil, mainly for export. In 2017, Netafim was sold for $1.5 billion, which opened up a variety of new investment opportunities for the kibbutz, which over the years had become a diverse holding company with investments in industry startups, venture capital funds, and partnership in a technology incubator. One of the kibbutz's below-the-radar (until recently) investments is in medical diagnostics company Picodya.
Picodya is currently run by Tzvika Barkai, a member of Kibbutz Hatzerim, who came to the post after a long career in management posts, among other things seventeen years at Netafim. Barkai is also chair of Kibbutz Hatzerim's economic management committee and leads the kibbutz's investment activity, and he explains: "We started to found our industrial companies in order to deal with the challenges of desert agriculture, and from there our activity broadened. In our jojoba business, we also examined over the years tangential investments connected to healthcare, and so we know the field well."
"Covid-19 brought us out of the closet earlier than planned"
"Picodya showed up on our radar in 2017. We met the investor of the technology, Yehuda Yavets-Chen, just after we sold Netafim," Barkai relates. Yavets-Chen is an autodidact inventor, who in the past worked at the company that became Orbotech, and invented patents that form the basis of several startup companies, such as Faro Innovations, Phinergy, and Advanced Robotics. "We didn't understand most of what he said at first," admits Barkai, "but it intrigued us enough to look into it, and after a few months during which we examined the company ourselves and through experts, we set up Picodya together in 2018. We formulated the business model together. Together we chose the name Picodya - a combination of pico, the size we deal with, and Wikipedia, because of the quantities of data that we would generate.
"We were under the radar until we had something to show, among other things because of stories like Theranos (which touted a new approach to diagnostics but failed to develop the product and in the end deceived its investors and customers as to its diagnostic capabilities - G. W.). The coronavirus hit us in March 2020 and brought us out of the closet earlier than we planned, and accelerated some of the processes. After two years of work, we have a product, a prototype that works in the laboratory and does what we promised. In Covid-19, we succeed in carrying out serological tests using the method we developed."
The kibbutz is now basically an investment company?
"We are more oriented towards industry. With Picodya, Kibbutz Hatzerim provides the organizational and management framework for the company, which now employs eighteen people, most of them working directly on development, and the rest is now mainly carried out by external contractors. The hope is that one day it will be an industrial product of the kibbutz."
How does the product work and what's new about it?
Yavets-Chen: "We can do more tests per hour, more tests per patient, and more patients, at a lower price. We basically have two cartridges, in one of which we put the patient's sample, and in the other all the tests that we want to perform on it. The test fluids can be very expensive. We manage to get to a situation in which the sample spreads into tiny wells, and then we bring the cartridge containing the sample into contact with the cartridge containing the testing fluids, but contact does not take place in the sampling wells but on a membrane which is not in either cartridge but between them. That way, very many tests can be done at once, with the volume of the test reduced to a very small size, making its cost low." The method suits a situation in which a person comes with a certain syndrome, and medical staff want to carry out several tests at once, and not serially, in order to diagnose his condition. "For example, we could have a profile of respiratory diseases, or infectious disease, or cardiovascular diseases, or a set of sexually transmitted diseases."
Yavets-Chen says that so far the product has undergone feasibility tests for twenty types of symptoms and diseases. "The aim is to reach as many as 4,000 different wells of sampling materials in each cartridge, in order to repeat some of the tests several times and thus achieve a high level of accuracy or the ability to carry out a quantitative test, and not just a binary one."
What is the breakthrough you made that made this advance possible?
"Yavets-Chen: "We didn't invent the Lab on a Chip idea. Today, there are labs that can bring together a thousand samples and antigens, but this chip costs a thousand dollars, and the systems cost a quarter of a million dollars. This is amazing microfluidics, at the highest level in the world, but the failure is that the chip is for one-time use, because there's no way to clean it. The buyers of these systems are the big research institutions. We have made the complex chip - not the cheap chips - multi-use, because the fluids don't meet within the cartridge."
Picodya's product to reach market in 2022-2023
Picodya has not yet published scientific articles validating its technology. Barkai: "We made a strategic decision to operate under the radar in the first years. At this stage, the company is collating the results of the internal trials. The company has a research collaboration agreement with the Israel Institute for Biological Research in Ness Ziona and with the National Institutes of Health in the US, and as the joint research with these institutes develops, we will publish the research."
The product will probably be submitted to the US Food and Drug Administration on the short 510(k) track, and so it could reach the market in 2022 or 2023. It will initially be supplied to hospitals, and after that to clinics and health funds. The company recently completed a $10 million fund raising round led by SIBF (Southern Israel Bridging Fund)).
Yavets-Chen adds that "Hatzerim is a good partner for me, because they know how to run companies. We're not looking for any sort of innovation in the way the company is managed, but only in the technology. I have a high regard for industrial companies that are properly run in an orderly way. Cinderellas and successful garage companies are one in a million."
Published by Globes, Israel business news - en.globes.co.il - on February 4, 2021
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