Outta the park

A new biotechnology park is intended to bring Jerusalem's industry to a whole new playing field.

hebrew u 88 (photo credit: )
hebrew u 88
(photo credit: )
By spring 2007, the skyline of the Hadassah University Hospital and Hebrew University in Ein Kerem campus will look very different than it does today. After officially breaking ground for the biotechnology park last month, in the presence of Deputy Prime Minister and Finance Minister Ehud Olmert, the joint owners of a new eight-story complex - the Hadassah Medical Organization and the Hebrew University - announced their anticipated timeline for the creation of the 9,000-square-meter (96,840-square-foot) complex. "This is a giant venture," says Dr. Raphael Hofstein, CEO of Hadasit, the subsidiary that patents and markets the scientific and intellectual products of the Hadassah University Medical Center, via investment in new scientific start-ups. Hadasit joined forces with the Hebrew University to create UNIHAD, a foundation established exclusively for the creation of the park. "The philosophy behind it is that Hadassah and Hebrew University are both heavily involved in medical research. We are both actively involved in creating new start-up companies based around different medical ideas - good products start with good ideas," Hofstein says. "Besides raising money for them, our biggest challenge has always been offering them space to operate. That's how we came up with the idea for the park," he adds. Having already jointly established five other schools of allied medical professions, Hadassah and the Hebrew University are well positioned to join forces on the park. "The Hebrew University and Hadassah Hospital are on the list of world leaders in accordance with indicators defined by international institutes that determine the impact of publications in the realm of biotechnology," says Hadassah's Director General Professor Shlomo Mor-Yosef. "The vast biotechnological research conducted at the Hebrew University and Hadassah Medical Center is positioning Jerusalem as a national biotechnological hub and a major attraction for international enterprises in biotechnology and pharmaceutics," said Moshe Vigdor, formerly Vice President and Director General of the Hebrew University, in a written press release. The new, state-of-the-art park will house 20-25 new life science companies, some of which will originate from Hadasit, others of which will come from Yissum, and still others which will be unaffiliated with either incubator. "Any company in the field of life sciences that understands the advantage of residing on the campus of a hospital and medical school is most welcome to rent space in the new complex," explains Hofstein. In order to be eligible for occupancy, companies are required to be working on the development of new drugs, new methods for diagnostics, or new medical devices. These are the only requirements UNIHAD imposed on Minrav Investments, the project's developer. One of the biggest developers in Israel, the 35-year-old company boasts an impressive CV of buildings across Jerusalem including the Yad Vashem Holocaust Museum, Beit Halohem (The Soldiers' House), Neve Hamuzeon near the Knesset, the new Hebrew University Bronfman Dormitories on Mount Scopus, and even the reconstruction of a synagogue in the Old City's Jewish Quarter. Minrav will create the new biotechnology park under the B-O-T (Build-Operate-Transfer) system, according to which it will design, build, market, lease, and otherwise operate the complex for 25 years before returning it to the possession of UNIHAD. The $12-13 million building, designed with the input of experts from around the world, will consist of five floors for offices and laboratories, with three additional levels for parking and services. Having built Orbotech in Rehovot, Minrav has experience building laboratory space. Still, the new biotech park has its own unique challenges. According to Avishai Ben Chaim, CEO of Minrav, most buildings of its ilk are built on one level. But because of Ein Kerem's limited surface area, the complex has to be built upwards. "This is a challenging adaptation," he says. "It makes everything - from waste disposal to air and water purification systems - a bit more complicated." Minrav is obliged to build the complex according to the strict requirements of the Health and Environment Ministries, which impose a very high standard of cleanliness due to the nature of biotechnological experiments. Biotech companies need access to certain gases, certain chemicals, a specialized sewage and disposal system, special air conditioning and water treatment facilities. "It's much more complicated than a standard commercial high-tech property," Ben Chaim explains. "Each lab will be custom-built to suit the needs of each new occupant." For Minrav, it's worth every shekel of investment. Once the work is done, it means 25 years of rent - at an estimated $13-15/meter, plus $3-4/meter for maintenance. They are expecting high occupancy. "From what we understand," says Ben Chaim, "there's a real need for a facility like this." For potential occupants, there are numerous benefits. The physical proximity to the Hadassah University Hospital and the Hebrew University-Hadassah School of Medicine is invaluable. "The advantage of a biotechnology park in immediate proximity to an existing hospital has proved beneficial in various places worldwide," says Mor-Yosef, who lists the US and the Netherlands among the top countries to experiment with this arrangement. "These parks are very successful because they benefit from the fact that they are located in the vicinity of a medical center. At Ein Kerem it's even better, because it is also the location of a medical school," adds Hofstein. "Having access to the existing infrastructure of a medial school - its equipment, resources, and specialists - is a huge plus." Dr. Morris Laster, CEO of Bioline Therapeutics, a two-and-a-half-year-old biopharmaceutical company established jointly in May 2003 by Teva Pharmaceuticals, Giza Venture Capital, Pitango Venture Capital, and Hadasit and involved in the development of novel compounds for the treatment of neurological disorders including schizophrenia, neurodegenerative disease and cancer, attests to the benefit of this proximity. Laster dubs Bioline "a biotechnology accelerator" and intends to move the plant to the new park from its current location in Har Hotzvim. "Currently, there is simply not enough opportunity to interact with Hadassah and the University." Perhaps of even greater significance is occupant companies' physical proximity to one another. "In addition to biotechnology start-up activities, researchers from the Hebrew University, Hadassah, and leading Israeli firms will conduct joint research and development projects at the new location," explains Vigdor. UNIHAD came up with the idea for the park based on Harvard University Professor Michael Porter's economic philosophy 'The Cluster Effect', which puts forth the idea that it is beneficial for companies of the same industry to maximize their interaction by occupying the same physical space. "Having a biotechnology park where many companies coexist fulfills many of the objectives of 'The Cluster'," says Hofstein. "It's about the exchange of ideas between academics, research doctors, and physicians; between MDs and PhDs, and the owners of the companies. The cross-fertilization is another huge plus." Laster concurs. "You want to be surrounded by people who are doing things similar to what you're doing," he says, explaining that although there are a lot of biotech companies in Har Hotzvim, the vast majority of the companies surrounding Bioline are high tech. He adds that there is no central place for biotech companies in Har Hotzvim to get together. There is no learning from one another, no utilizing each other's services, and no 'cross talk'. "This cross talk can be tremendously constructive, and can help accelerate what you want to do," says Laster. "That's the biggest thing we're missing right now. We're isolated." According to Laster, no such 'hub' yet exists in the biotech field in Israel. Although Rehovot likely boasts the highest concentration of biotechnology companies in the country (with Jerusalem coming in as a close second) there is no 'Cluster Effect' in Rehovot, either. Laster, who also sits on Startup Jerusalem's Board of Directors, suggests that because of this lack of interaction between companies, and because of inadequate lab space, companies are leaving Jerusalem. "We have already identified several companies that want to leave the city," he says. "The biotechnology park is Jerusalem's chance to create that much-needed hub." With hubs come jobs. "Labs need general workers as much as they need researchers and engineers," says Israel Amity, Director General of Hebrew University Assets Inc. and Director General of UNIHAD. "The biotechnology park not only keeps the know-how in the city, but creates all sorts of new job opportunities." "All in all, the park is a tremendous thing for Jerusalem," says Laster. "It will become a very important nexus for biotechnology in Jerusalem." Perhaps that's why the Ministry of Trade and Industry's Investment Center decided to endow the park with a $2 million grant. Says Amichay, "We believe that the grant we obtained from the government to create the center indicates its importance to the city." "We certainly view this project as a key component of Hadassah's contribution to the development of Jerusalem into a key player in the life science industry," says Hofstein. "We hope companies from across the country will be attracted to the new center." If the complex is as successful as Hofstein anticipates it will be, UNIHAD intends to build second, third, and fourth additions - comprising a grand total of over 60,000 square meters. "If all goes as planned, this will be the first stage of many more," says Hofstein, who explains that if there is demand for further lab space, they will begin construction on the second building two years after the first is completed. "Urban planners realize that Jerusalem embodies the ideal array and maximum potential for a thriving biotechnological industry," says Mor-Yosef. "I couldn't agree more," says Laster. "If you build it, they will come."