Very few readers will recognize the name of Freddy Zinger, although the manufacturing plant he founded, Teva Migada, has been in the headlines because Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is planning to sell it. Will Teva manage to preserve the factory's cutting edge character and attractiveness? Zinger, who inaugurated the plant in 1988 and left it to found his own company, is worried mainly about the effect of the measure on employment in the Galilee.
"This plant reinvented itself five or six years ago," Zinger says. "Today, it's a very successful plant that shows that companies can arise in the outlying areas and attain a high level of profitability, based on very special products invented in Israel. I don't think anyone is seriously thinking about closing Migada down and transferring its production overseas." Migada currently has 200 employees. Teva has not yet given the potential buyers the auction documents, and it is still unknown who is likely to participate in it. One possibility that has been raised is a group headed by brothers Dan and Shmuel Topaz, but they are not the only ones.
"Globes": Are you considering buying the plant you managed?
Zinger: "I'm not ruling out anything."
Zinger is not eager to talk about Teva, the company from which he sprang, but he finally agreed to say a few words about the crisis in the company. "The writing was on the wall," he remarks. "What was done was tantamount to illogical Israeli arrogance. Many of my friends worked at Teva, and some still do. What happened to the flagship of the TASE is a pity."
Zinger shows great appreciation for Check Point Software Technologies Ltd. (Nasdaq: CHKP), the company that temporarily replaced Teva as number one on the Tel Aviv Stock Exchange (TASE). "Without knowing him, it seems to me that what happened to Teva couldn't happen to (Check Point cofounder and CEO) Gil Shwed. He's a person that has already done everything, and still comes to work every day in Kfar Saba. He has the modesty that is good for managers."
Connected to the Galilee
After resigning from the management of Migada, Zinger founded Medimop Medical Projects and later sold it to US company West Pharmaceutical Services in a $60 million deal. "The entrepreneur will get everything," was the headline for the small report published in "Globes." Zinger, who founded the plan in the 1990s with no support from funds or external investors, was never interviewed about either founding Medimop or selling it. Today, he says, "When it first started, as a subcontractor, Medimop developed the mixing and spraying system for Omrix's biological glue. Whether they admit it or not, a large part of the product's success was due to this." Omrix was sold to Johnson & Johnson in 2008 for $438 million.
Medimop later independently developed a series of patented products for mixing and injecting drugs at home. The company's development center was in Ra'anana, and the manufacturing plants were in the Galilee: one on Shlomi and one in Tefen. Medimop continued its operations under West Pharmaceutical, and Zinger says that its revenue grew from $15 million to $60-70 million since it was sold. "There are 200 employees at Teva's Migada plants, and 150 West Pharmaceutical employees in Shlomi and 50 in Tefen. I feel responsible for employment in the Galilee now. I'm connected to the place by what I do, not what I say."
What is the secret of West Pharmaceutical's production in Israel?
"They understood the development talent in Israel. These products deliver expensive drugs, so their proper functioning is more important than the marginal cost. They got labor, quality, and service in Israel. They are extremely satisfied. For them, this is a model acquisition."
"I have no ambition to make a killing"
For two years after the acquisition, Zinger led the absorption of Medimop into West Pharmaceutical. Then he dealt in various medical devices investments, community work, and the founding of Medingalil in partnership with several kibbutzim and the late Zvika Rubinstein, former CEO of the Kiryat Shmona Center for Technological Entrepreneurship (Meytav). The company was founded in order to commercialize the inventions of Migal Galilee Research Institute, a research institute in Kiryat Shmona specializing in medicine and agriculture. Following Rubinstein's death, the company moved in the direction of research.
The event that brought Zinger out of the shadows, however, was the founding of the Galilee Innovation Horizon incubator, in which he plans to foster additional ventures that will encourage employment in the Galilee. The incubator of Zinger and his partners differs from the technological incubators now being founded by the Israel Innovation Authority. No leading international business concerns are involved in Galilee Innovation. The people involved in Galilee Innovation all come from industry. They are people who have founded companies by themselves, except for the newest partner, who joined the incubator just this week - Mor Research Applications, the technology transfer company of Clalit Health Services. "Up until now, Mor has been a catalyst for the founding of 60 startups, and it has 20 years of experience and access to 9,000 doctors and researchers in hospitals and health funds," Zinger says.
"I've been connected to industry for 35 years, but I barely made it into the press, and I've always been glad about it," he says. "I came to this sector from the manufacturing of medical products, not from high tech, and this is also my vision for the incubator. I have no ambitions to make a killing from this. If I make back my investment, I'll be completely happy. If I make any more, that's great." The manager of the incubator is Elisha Yelin, who managed the Katzrin incubator in the government incubators program framework, and later under the franchising of Capital Point. "In his hands, several industrial companies emerged, such as Lithotech Medical and TavTech," Zinger says.
What types of entrepreneurs are you looking for?
"We're focusing on medical equipment, but we can go for drugs if the projects are especially interesting. I'm not crazy about the cannabis sector, but I won't rule it out. In general, medicinal plants are interesting, because of the special know-how that Migal Galilee Research Institute has in this area.
"We're looking for the entrepreneurs who took the first NIS 20,000 from their own sources and possibly already got somewhere, and we're asking ourselves where they will get to after two years of the incubator."
Will it be possible to attract the serial entrepreneurs to the north?
"I'm not necessarily looking for the serial entrepreneurs. You have to be careful about who comes, gets you excited about an idea, and then goes on to the next thing. I need someone who is connected to his project. We don't necessarily want an exit. A company in which 10, or 30, or five people work is terrific. We have to change the stigma that the Galilee is nice only for excursions. They have recently built wonderful roads in the Galilee, and that's great, because it's much more convenient to reach now. But the roads, unfortunately, run in both directions. They don't necessarily only enable experience and talented people from the central region to come to us to help us develop our activity; they also enable people from the north to work in the center, and this is liable to turn the northern communities into commuter communities.
"We need jobs in the north, including for a family, so that people don't spend their day on the road, so that there will be a community. It's ridiculous that we're an incubator in the outlying area and get the same conditions as an incubator in Yokneam."
Yokneam is not an outlying area?
"Yokneam isn't an outlying area."
What is special about what you are offering to entrepreneurs?
"I invest in quite a few medical startups at the seed stage, and I purport to grasp their practicality and feasibility fairly quickly. We all come from the field, and we've seen a few things. We made the decisions relatively rapidly, because we have the money. Sometimes we decide according to people's faces. We do go for slightly odd and risky projects, but which are feasible. That's what an incubator is for."
Other incubators boast of glittering names of leading global investors and major drug and medical device companies. Can you compete with that?
"When you work with a large company, you eventually find yourself sitting opposite a young representative of the company. We are old and experienced, and the person actually sitting in front of you is the one who makes the decisions and advises you from his experience in the field."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 7, 2018
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