October 20, 2023
Israeli med-tech companies adapt to wartime footing
Original source here.
In interviews with BioWorld, med-tech industry leaders in Israel noted up front that a hasty exit mid-conversation could occur in response to sirens alerting to missile attacks. Despite constant disruption, most companies said they were determined to maintain business as close to usual as possible. Still, challenges abound, including the potential mandatory military activation of CEO and key personnel, ongoing attacks and potential disruption or diversion of critical resources. The tenor remains positive, however, with companies praising strong support from the venture capital community and other investors and partners worldwide and the benefits of operations in the U.S.
The tech industry in Israel accounts for about one in seven jobs and nearly 20% of its gross domestic product. The medical technology sector is a large and rapidly growing component, in no small part a result of the training and exposure all young Israelis receive during their mandatory military service.
That same training and exposure to ongoing assaults prior to the Hamas attack earlier this month underlies the commitment to proceed with business. Ofer Sharon, CEO of precision oncology company Oncohost Ltd., is juggling the demands of the business with the country’s need for doctors. He is currently serving as a reservist physician along with many of the company’s employees.
“The fact that we have a U.S.-based team helps us greatly, but here in Israel we have taken a decision to continue with our mission; between the sirens and rockets, and despite the atrocities we are seeing and hearing about every day,” he told BioWorld. “This is not a business decision, but a moral one. We prevail and grow by creating lifesaving technologies while evil tries to take and destroy lives.”
Aion Labs CEO Mati Gill observed that in response to the attack, “we had a 150% response rate [to activation]. You could say we were oversubscribed for the round. Many of those, of course, come within the industry, including myself. I’ve been given notice that I’ll be joining those efforts this week,” he told BioWorld.
For those who are managing businesses along with serving in the military, laser focus is required, he said. Business leaders “are going to be juggling between defending our country, continuing with resilience to be able to build our industry, and … taking care of our families. That’s three full-time jobs at the same time.”
Gill noted that juggling is being facilitated by “incredible support” from investors and partners across the board. In a call last week with 60 representatives of venture capital and pharma companies and others around the world, “All just wanted to reiterate their support for our mission and their commitment to Aion labs and to our purpose and of course, their understanding and strong condemnation of brutal terrorist attacks that we have faced.”
So far, nearly 800 global venture capital firms have signed an open letter supporting Israel and its technology community during the war with Hamas. "The nation's contribution to the world in terms of technology, research and entrepreneurship is invaluable, and we hold deep respect for its unwavering commitment to progress," the letter said. "In the spirit of peace and unity, we encourage the global venture community to support and engage with Israeli startups, entrepreneurs, and investors as they navigate through these challenging times,"
The strong support from the VC community is greatly appreciated and is also good business, Gill explained. “VCs want resilient founders that can overcome adversity,” Gill said. “there’s no startup that doesn’t have to have its back against the wall at some point when the algorithms don’t work, or the biology doesn’t work as you planned. You need to be able to beat out your competitors. You need to be able to overcome market challenges. Resilient founders, resilient works, resilient people have a higher chance of success.”
A deep bench has also proved it worth, he said, with his partner and Rehovot, Israel-based Aion’s chief technology officer able to take over as well as other partner representatives who have offered to help.
“And we’re not in medieval times. We have cellphones, we have internet,” Gill added. “Nothing is too pressing that I can’t wait and weigh in” a little later. The industry has also drawn on technology refined during the pandemic – including decentralized trials and Zoom calls – to keep going, he noted.
At Datos Health, the official remote care vendor for the Ministry of Health in Israel, “we are working tirelessly to support our customers in creating a sense of normalcy for their patients. Although there has been an uptick in patients using Datos Health where our programs are already deployed, other projects we have been working on locally are on hold, negatively impacting our business,” Datos CEO and Founder Uri Bettesh told BioWorld. “We have three employees who are in the reserves and working in low capacity due to the difficulty of maintaining their personal and professional lives. The rest of our team is working remotely, enabling us to sustain business as usual as we are a remote-first organization.”
Gamida Cell Ltd., a cell therapy company headquartered in Jerusalem, is “committed to serving our customers and patients and our manufacturing facility is operational,” said Abbey Jenkins, Gamida president and CEO.
Nano-X Imaging Ltd., based in Neve Ilan, Israel, postponed its investor day because of the attack, but otherwise carried on as planned. “Our business, in particular our U.S. operations and go to market strategy continue as planned, and Nanox employees are working safely as we continue to monitor and adapt to the evolving situation,” said Nanox CEO Erez Melzer.
In the U.S., Advamed, the Medtech Association, released a statement this week from its President and CEO Scott Whitaker. “Our thoughts are also with the med-tech community in Israel and the broader region. The ongoing operations of med-tech companies are certain to be negatively impacted by the conflict. Our industry worldwide stands ready to support those companies and employees who need our assistance.”
“We understand how difficult and emotional the events of the past week have been. Through this time of pain and suffering, it is essential that we as an industry come together and support our employees and the patients who will be impacted by this tragedy,” Whitaker added.