Merck sets up €20m fund for Israeli biotech cos

Merck photo: PR

The German pharmaceutical company is cooperating with Arkin Bio Ventures, Pontifax Fund, and WuXi Apptec.

German company Merck has announced the founding of the ExploreBio pre-seed fund to invest €20 million in young biotechnology companies over the next five years. Merck is setting up the fund in cooperation with Arkin Bio Ventures, Pontifax Fund, and China-based international company WuXi Apptec, an R&D services subcontractor with an active branch in Israel.

Merck chairperson of the board and CEO Stefan Oschmann, who traveled to Israel for the launching of the fund, said, "The spirit driving Israeli startups is unique and inspirational. We are proud to have an active part in this great success story. We are now carrying out another important step in investments in Israel with confidence in the innovative potential of ExploreBio."

The four investors - Merck, Pontifax, Arkin Bio Ventures, and WuXi Apptec - have already cooperated in a number of past investments in cancer treatment companies Metabomed and ARTSaVIT, among others.

The fund will invest in companies that are in initial trials for proving feasibility. ExploreBio plans to invest €1-1.5 million in each company, and to recruit up to four new companies a year for five years.

Merck already operates two technology incubators in Israel. One, BioIncubator, is an incubator for developing drugs without support from the Israel Innovation Authority that has undertaken to invest $10 million in medical ventures in Israel by the end of 2018 (most of this amount has already been invested). Companies included in the new venture will be able to work in the facilities of this incubator, where Metabomed also matured.

The second incubator is the PMatX materials innovation laboratory, to which Merck and the Innovation Authority have allocated €20 million. PMatX, which deals with next generation electronics technologies, operates as a joint venture with high-tech development subcontractor Flex (formerly Flextronics) and Battery Ventures.

Merck, founded in 1668, is the world's oldest drug and chemical company, with business in health, biology research, and materials. The company has 50,000 employee worldwide. Its sales totaled $15 billion in 66 countries in 2016.

Merck is a different company than US company Merck, which is one of the world's largest pharmaceutical firms, and has operated separately from the German company since 1917, when German businesses in the US were nationalized because of WWI. The German company has over 300 employees in Israel at its sites in Yavne, Herzliya, Rehovot, and Jerusalem working in all three of its business spheres: health, biology research, and materials.

Merck said, "The ExploreBio venture will enable Merck and its three partners to be in contact with startups at earlier stages than at which the first investments are usually made. Another advantage for the partnership is the possibility of leveraging the available resources in the framework of the consortium and the close connections that already exist between them in order to maintain closer and more effective connections with the concerns receiving the investments."

Published by Globes [online], Israel Business News - www.globes-online.com - on February 20, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Merck photo: PR
Merck photo: PR
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