Johnson & Johnson is closing down operations at its blood bank at Sheba Medical Center (Tel Hashomer Hospital) near Tel Aviv, where it has been active since acquiring Israeli company Omrix Biopharmaceuticals. Omrix developed products based on blood plasma, and operated from a large plant in Jerusalem, laboratories in Ness Ziona, and a facility at Sheba Medical Center. 100 employees will be laid off following the closing of the blood bank. The facility will operate on a limited format until 2021, when it will be shut down completely.
The report on the closing of the Sheba Medical Center facility comes one year after the company shut down its plant in Jerusalem, which was transferred last year to Australian plasma company Aegros.
Johnson & Johnson acquired Omrix in 2008 for $348 million. The company develops blood plasma-based products that encourage blood clotting in surgery. Its flagship product is a sticker made of clotting encouraging material that can be placed on an open wound in order to encourage clotting during surgery or following serious wounds.
Omrix was founded by Robert Taub, a Belgian Jew who previously founded blood clotting companies in Belgium and afterwards was among the first investors in NeuroDerm. He was one of the biggest beneficiaries of the company's acquisition in 2017 for $1 billion. Omrix was also a great success: $50 million was invested in the company before its 2006 IPO on Nasdaq at a company value of $143 million. Omrix's peak market cap was over $600 million.
Shortly after Johnson & Johson acquired Omrix, the state of Israel filed suit against the company, alleging that the intellectual property on which Omrix's developments were based on work by Prof. Uriel Martinovich at Sheba Medical Center, and that the hospital had not received money for it. At that time, the intellectual property regulations governing inventions by doctors at government hospitals were not as clear as they are now, and government hospitals did not regularly commercialize their intellectual property.
The state's claim against Johnson & Johnson was settled in 2006, with Omrix paying Sheba Medical Center a mere NIS 60 million. In the period between the filing of the lawsuit and the reaching of the settlement, however, Johnson & Johnson's attitude towards Israel cooled. The company made fewer investments in Israeli companies, and did not allow its executives to talk with the Israeli media. Relations have thawed since the settlement. For example, Johnson & Johnson is one of the investors in the FutuRX technology incubator in the framework of the Israel Innovation Authority's incubators program.
The lawsuit, however, was not the sole reason for the gradual closing down of Johnson & Johnson's activity in Israel. Even after the lawsuit was reported, the company continued its enthusiastic hiring for the new plant it set up for Omrix's products in Jerusalem, in addition to its older activity in Ness Zion and Sheba Medical Center. In time, however, Omrix's product failed to compete successfully with the existing products. The trend changed in 2014, and Johnson & Johnson started laying off employees.
Johnson & Johnson, however, is still very active in Israel. Biosense Webster, one of its most success subsidiaries, has hundreds of employees in Haifa.
Published by Globes, Israel business news - en.globes.co.il - on June 18, 2019
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