GE Healthcare has three units responsible for seeking technologies outside the
US: in Russia, Japan and Israel.
Israel’s inclusion so high up in the
list is no surprise because GE Healthcare is very active here. Following the
acquisition of imaging systems developer Elscint Ltd. in the 1990s, GE Healthcare
established a large development center in Haifa, which undertakes a large part
of the company’s imaging activity.
Over the years, GE Healthcare launched
many collaborations in Israel, especially with companies developing monitoring
products, such as Deepbreeze Ltd., WideMed Ltd. and InSightec Image Guided
Treatment Ltd. , in which it owns a minority share. GE Healthcare also acquired
Versamed Ltd. and Orbotech Medical Ltd.
Oded Meirav is responsible for
seeking technologies (not just medical) for GE in Israel and for developing the
company’s relations with start-ups before and after their acquisition. He is the
first to admit that cooperation with a company such as GE is not always like
winning the lottery, as some start-ups seem to think.
“Making a deal with
GE is like a mouse dancing with an elephant: the mouse has to watch its feet,”
Meirav made the remark at a medical-devices conference hosted by
law firms BFP & Co. and Fisher Weiler Jones.
“GE, like a dancing
elephant, doesn’t intentionally hurt companies,” Meirav says. “I haven’t yet
encountered a deal that was designed to prevent a product from reaching market,
nor have I seen attempts to steal intellectual property.
The danger is
from unintentional harm; for example, if GE, like any corporation, drags out a
deal for a year. A company’s time is its most valuable resource, but a
corporation has time.”
That being the case, some companies that boasted
about their distribution contracts with GE Healthcare in recent years did not
subsequently show substantial sales. The contracts did not necessarily give them
a springboard for raising large amounts of capital, even on the Tel Aviv Stock
“Deepbreeze and Widemed were really disappointed by the pace at
which things developed,” Meirav told Globes. “We also thought that things would
move more quickly.”
Globes: Did things drag out because of problems with
the product? Meirav: “Not at all. I can tell you that, at least in the case of
Widemed, we’re finally jump-starting the process.”
If that is the case,
it seems that these two companies acted wisely not to tie their fates with the
corporation, but gave rights to one out of several products.
Why is it
nonetheless worthwhile to commit in a contract with a company like GE? “Because,
ultimately, there is no choice. A start-up cannot set up a global marketing
network, whereas GE can halve production costs and can finance the
Meirav is not only the contact person for companies seeking
ties with GE, he can also prevent common mistakes.
“It’s not good to
contact GE every year,” he says.
“You’re liable to be perceived as a
nuisance. It’s a good idea to approach only after the development risk of the
technology has been removed and just before sales begin.
“It is also
desirable to carefully learn about our areas of business, just by entering our
website. Once in a million years, we’ll invest in a product that isn’t in our
fields, but that’s really rare.”
Meirav advises companies to carefully
control their presentations more than ever.
“The English should be
perfect, without jokes, without political or sexist comments,” he says, “and
there’s no need to mention that cardiology is a huge market. GE knows
BFP & Co. attorney Iris Pappo said early collaborations with
corporations are usually perceived as preceding an exit but are actually liable
to damage it.
“New companies are liable to sign a distribution or
cooperation agreement that renders the company’s acquisition superfluous,” she
Pappo says two basic rules are: to ensure ways to withdraw if the
agreement does not work out, and to continue to contribute to the corporation in
a way that will make it difficult to get rid of you.
For example, she
says, it is important to limit exclusivity to certain products, territories or
It is also necessary to retain control of the
intellectual property portfolio and to be a partner as much as possible in
processes related to product development.
“If you’re a partner in
development, you mess up the intellectual property for them,” Pappo says.
“That’s a good thing, because if the corporation wants to dump you, it will have
to buy your share of the rights, or even the entire company.”
that now promises future royalties might appear excellent,” she says, “but it
effectively sells the company or product without compensation for what you