1. Innovation as a major Growth Engine of the Israeli Economy Israel Makov Delegation of Hospital CEO’s from North America February 5 th, 2012 Tel Aviv

2. Israel’s High-Tech Industries  41.2% of total exports in 2009  270,000 employees in 2008  c. 14% of total employees in Israel’s business sector  15% of Israel’s GDP

3. High-Tech Industries Software / Hardware Nanotechnology Biotechnology Clean-Tech Space Industry Life Sciences Innovation Centers Start-ups Large companies Security Industries Semiconductors Communications Internet

4. Industry’s Strengths

5. Industry and Academic Partnership  The Chief Scientist formulated a set of designated tools to enhance the relationships between Academy & Industry (marketing, financing, business training, etc.)  Supporting basic research that has the potential to be commercialized  Expanding existing programs ("Magneton", "Nofar," etc.)

6. Government Support of the Industry

7. Governmental Focus on R & D Clean-Tech? Bio-Tech? Homeland Security ?

8. A Fruitful Academic Infrastructure Israel ranked #3 globally in scientific publications per capita SOURCE: Office of the Chief Scientist - Ministry of Industry, Trade and Labor, ISRAEL Ranked 2 nd in Stem Cell related Scientific publications Ranked 2 nd in Stem Cell related Scientific publications

9. Israel – A Source of Medical Innovation Medical patents/capitaBioPharma patents/capita SOURCE: US patent office 2007; E&Y 2007, The Global Competitiveness Report 2010-2011, WEF 2 nd in Europe in biotech pipeline products per capita 2 nd in Europe in biotech pipeline products per capita Ranked 6 th in innovation globally by the World Economic Forum Ranked 6 th in innovation globally by the World Economic Forum

10. Innovation Translates Well To Ventures 200705040199032000199802>199806 Companies by year of foundation Number 333 companies established between 2003-2007 ~900 companies 50-60 new per year 1/3 are younger than 5 years 100’s of service providers: −CROs −Engineering −Labs −Consultants −Bankers −Lawyers SOURCE: ILSI report

11. Ventures Are “Real” – Create Value Pre-Clinical Other Clinical Seed Revenue 39 Companies development stage, 2009 % >1/3 of the companies generate cash Companies sold/traded at high values Optonol D-Pharm (TASE: DPRM) Mediguide / St. Jude Ventor / Medtronic Omrix / J&J Boston Scientific / Remon Protalix (AMEX: PLX) Disc-o-tech / Kyphon Colbar / J&J $155M $175M $300M $325M $438M $80M $750M $220M $159M 2010 2009 2008 2007 2006 2006-2010 selected deals SOURCE: ILSI Data Base 2009

12. Most Popular: CARDIOVASCULAR, ONCOLOGY, CNS Orthoped- ics OncologyOphthalmicCNSCardio- vascular OBGYN & pediatrics Life science companies by therapeutic area, Israel 2007 Number SOURCE: ILSI report General & internal Among medical device companies: 20% Cardiovascular 8% General & internal 5% General surgery

13. Largest Segment: MEDICAL DEVICE Pharma Other 2 Medical IT Agro. Biotech. Service Biotech. 55 Medical devices Life science companies by sector % 100% = ~900 companies Medical device fits Israel’s characteristics Innovation, improvisation, problem solving Engineering & software Requires smaller investment Shorter time to market 75% of financing is for medical device (vs. 35% in the US) Smaller/simpler operations Shorter process Simpler regulation

14. Granted Medical Device Patents - per Million Capita 2007 Source: www.uspto.govwww.uspto.gov Analysis: ILSI ©

15. Granted BioPharma Patents – per Million Capita 2007 Source: www.uspto.govwww.uspto.gov Analysis: ILSI ©

16. Venture Capital Investments in Israel - 1997 – 2010 YTD ($ million) Source: Israeli Money Tree Survey 38 103 144 225 114 244 161 145 287 206199 203 152 37

17. Most Large Players Have Local R&D Activity

18. … And A Fruitful Academy - Business Fusion Tech-transfer company The Hebrew University Tel Aviv University Program highlights More than 600 researchers in the relevant fields (Life sciences, Medicine, Exact sciences, Engineering) Licensed products include: Lipimix, Circadin, Diaslide Recently established a joint research fund with J&J $59M revenue in 2008 6100 patents to date – similar to MIT and Stanford More than 60 spin-off companies (e.g., Keryx, Nasvax, Novagali) Products: Exelon (Alzheimer), Doxil (ovarian cancer) Weizmann Science Institute (Yeda) 2006 – 2007 statistics: –>40 new license and option agreements signed –>80 research projects funded (including through JVs, e.g., J&J). –>200 patent disclosures submitted Copaxone (Teva), Rebif (Serono), the leading MS drugs 12 Tech-transfer organizations: 7 in universities, 5 in hospital Facilitate investments, sponsorship, and partnership with strategic players

19. Key Success Factors Government support & Financial infrastructure Innovation culture Army / Defense industries Academia Human resourcesGlobal orientation

20. Thank you