July 18, 2018 | The Israel Innovation Authority, the Israeli government’s support arm in the country’s development of industrial R&D, has announced the approval of a NIS 120 million (roughly $33 million) grant to three healthcare companies as part of a six-year program to expand R&D centers of multinational companies in biotechnology and medicine in Israel.
The three companies, medical device firm Medtronic, US General Electric subsidiary GE Healthcare, and healthcare business and tech solution Change Healthcare were approved after a competitive process by the Israel Innovation Authority that included a review of a number of proposals over several months as well as a marketing campaign with the Foreign Investment and Industrial Cooperation Authority at the Israel Ministry of Economy and Industry.
The program is a significant boost to the digital health field, a statement from the Israel Innovation Authority says, supporting the March 2018 Israeli government resolution to approve a NIS 1 billion (roughly $300 million) national digital health plan to establish Israel as a leading international digital health hub.
“The decision by these three multinationals to operate in Israel is an important vote of confidence in the State of Israel and the Israeli economy,” said Israeli Minister of Economy and Industry Eli Cohen, in a statement. “Expanding these R&D centers will help position Israel as a leading player in the field of biomedicine, while creating high-quality jobs in the fields of engineering and manufacturing, generating additional exports worth billions of dollars. These three companies join 320 other foreign multinationals active in Israel, positioning the country as an international leader in innovation and as an attractive hub for global companies.”
General Electric’s subsidiary GE Healthcare has its headquarters in Chicago but employees over 400 people in four centers in Israel out of the 54,000 employees working for the company around the world. The four centers are in Tirat HaCarmel, Tel Aviv, Herzliya and Rehovot. GE Healthcare completed the acquisition of the assets of Orbotech Medical Solutions, a subsidiary of Israeli electronics maker Orbotech and a manufacturer of cadmium zinc telluride (CTZ) detectors used in GE Healthcare’s Alcyone nuclear medicine technology. Orbotech later went on to be bought by California semiconductor equipment maker KLA-Tencor Corp, giving it a valuation of $3.4 billion, one of the largest exits of an Israeli company in the first half of 2018. The Israel Innovation Authority will offer the healthcare conglomerate NIS 50 million (roughly $13.8 million) over six years to renovate and expand its existing facilities as well as lease a new facility.
Change Healthcare’s software and data analysis-based solutions and network-based and tech-based services help provide better care for patients and give them a better understanding of their medical options. Change Healthcare’s development center in Israel was established in 1993, developing monitoring and information systems for the cardiology field. The company will receive a NIS 20 million (around $5.5 million) grant over six years to promote the company’s other health-related fields, hire new employees, and help boost the digital health ecosystem in Israel.
The Dublin-based medical equipment company Medtronic was one of the first companies to establish new development centers in Israel through the Israel Innovation Authority, receiving a $14 million grant in September 2017 to hire new employees in its Jerusalem and Yokneam development centers. The company currently employees 800 employees in Yokneam, Jerusalem, Herzliya and Petah Tikva of the more than 85,000 employees worldwide. The company is expected to receive a NIS 50 million (about $13.8 million) grant over six years to employ developers, engineers, and manufacturers in a development center for laparoscopic surgery visualization systems.