Israel Has No Shortage of Biomedical Startups, but Where Are the Global Companies?

Israel has exceptional biomedical researchers, outstanding universities and hospitals and a remarkable ability to turn scientific discoveries into startups.

But consider a simple question: where are the globally leading Israeli biotech-pharmaceutical companies that have emerged from all this research, talent and investment?

Most of us could probably name one: Teva.

Teva deserves enormous credit. It built an extraordinary global pharmaceutical business, historically rooted in generics, while increasingly developing innovative medicines. Its evolution is an important Israeli success story. But it remains a strikingly limited list.

This is not a question about prestige. It is an economic question and a national interest.

A globally successful biotech-pharmaceutical company can create decades of high-value employment, exports, intellectual property, expertise, tax revenues and further investment. It can turn scientific knowledge into a long-term economic asset for Israel.

And that value can continue to compound. An enduring global company can build development capabilities, train the next generation of leaders, create new medicines and reinvest its expertise and capital into the same ecosystem that produced it. Over time, the accumulated capabilities of such companies can themselves become an important economic asset.

So why has Israel not built more of them?

Perhaps the problem is not Israel’s inability to create biomedical innovation. It may lie in what the system has learned to reward.

Israel has excelled at creating biomedical startups around promising scientific discoveries, attracting investment and advancing assets toward licensing or acquisition. These are legitimate outcomes. But they are different from building companies that compound value for decades.

In biotechnology, that distinction is particularly important. Developing a medicine is a long and uncertain process, and much of the capability required to succeed is accumulated only through repeated experience taking drugs through clinical development, regulatory review, manufacturing and commercialization, and then using that experience to build the next generation of medicines. When companies are repeatedly sold before those capabilities mature locally, part of that institutional knowledge is built elsewhere.

Building a global biotech-pharmaceutical company requires something that cannot be created in a financing round: accumulated development experience, experienced leadership, patient capital and the organizational capability to turn one successful product into the next.

This may be Israel’s blind spot. The system is exceptionally good at creating biomedical startups but not equally optimized for turning the strongest of them into enduring global companies.

If capturing more of the economic value of Israeli biomedical science is a national interest, then long-term company building should become an explicit objective of the system.

That means supporting companies through the long development journey, building deeper pharmaceutical expertise in Israel and creating incentives that reward building an enduring global business rather than optimizing for the next financing round, licensing agreement or acquisition.

It also means asking a different question when an Israeli biotech company begins to succeed. The objective should not automatically be how quickly that success can be monetized, but whether some of those companies have the science, leadership and financing required to become the foundations of much larger businesses headquartered in Israel.

This is not about preventing acquisitions or licensing. They are essential to biomedical innovation. It is about ensuring that building a global company is a realistic and rewarded alternative.

Israel has excelled at creating biomedical startups.

The next challenge is to turn that scientific strength into enduring global companies and capture the long-term economic value they can create for Israel. 

Professor David Adler is Chief Scientific & Medical Officer of the PATHORA Institute of Pathology & Tissue Medicine. He is a senior pharmaceutical leader in oncology drug development and translational medicine with over 15 years of experience, including a decade in senior leadership at Bayer AG’s Global Oncology Clinical Development organization. He holds academic appointments at the Hebrew University of Jerusalem, Ben-Gurion University of the Negev, and the University of Bonn.