Israeli medical devices and New Jersey: Perfect together
Tel Aviv’s Edge Ventures and Trenton’s economic authority join forces in Jersey City
What do the PillCam ingestible diagnostic camera, ReWalk exoskeleton, IceCure tumor cryoablation system, and TytoHome remote examination kit have in common?
They’re among dozens of Israeli-developed medical devices in the United States market.
Yet although Israel is known as a medical device powerhouse, only a small percentage of these products manage a successful splashdown across the ocean.
Now, a partnership between the New Jersey Economic Development Authority and Edge Medical Ventures — an Israel-based medical device venture fund and innovation studio with a satellite site at the Liberty Science Center — is enabling the mutually beneficial goals of bringing Israeli healthcare products to market and creating jobs locally.
At a MedTech Innovation Showcase hosted by Edge on January 20 at Liberty Science Center in Jersey City, John Coelho, senior advisor at NJEDA’s Life Sciences Strategic Innovation Centers, said that the authority’s investment strategy is shifting from a large corporate focus toward a connected ecosystem of smaller entities “to intentionally diversify our state.”
Edge can offer its New Jersey-based portfolio companies co-investment from the state via NJEDA’s Innovation Evergreen Fund. The first $1 million matching co-investment, announced in January, went to respiratory care technology company Synchrony Medical, which has begun U.S. sales of its FDA-cleared LibAirty airway clearance system for chronic lung disease patients to use at home.
“We are here to work with entrepreneurs,” Mr. Coelho said, lauding the role of public-private collaboration in accelerating healthcare innovation. “We have one great example with Synchrony, and I hope we will have many, many more.”
Shai Policker, co-founder and managing partner of Edge Medical Ventures, said the new co-investment model “has been instrumental in anchoring Edge portfolio companies to New Jersey.”
Mr. Policker, a Technion-trained electrical engineer with a master’s degree from Columbia Business School, explained why New Jersey is a good choice for Israeli med-tech startups.
“There is a large healthcare industry in New Jersey, so we feel we can find the right people here,” he said. “Their expertise in clinical support and in understanding the complexity of healthcare in the U.S. is very helpful. The second big factor is the partnership with the state government, which doubles our investment in companies crossing the ocean.”
But very few employees in Israel need to cross the ocean, Mr. Policker emphasized. Each startup’s intellectual property and research-and-development teams will remain in Israel.
Mr. Policker, who lived in Tenafly for a decade, speculated that “senior leadership will continue to relocate, maybe founders and CEOs, and COOs in some cases. In other cases, relocation may not be necessary at all. It’s in the interest of the New Jersey government to create jobs locally and not bring Israelis over to do everything. An arm of the startups in New Jersey will oversee clinical trials, operations, and sales and marketing. We started with Synchrony, and this model is working very well.”
Synchrony Medical CEO Anat Shani said the startup’s vision is to fundamentally change how chronic lung disease is treated at home.
“With the backing of strong partners like Edge Medical and the NJIEF, we have established our U.S. headquarters in New Jersey, home to one of the most dynamic health innovation ecosystems in the country,” she said. “This additional funding accelerates our ability to scale U.S. commercial activity and expand patient access to LibAirty nationwide, while continuing to innovate.”
While awaiting the completion of the business incubation hub at SciTech Scity (pronounced “city”) at Liberty Science Center, Edge rents offices for itself and two incubator startups, Synchrony and Exero Medical, at the science center. A third portfolio company will be set up there in the coming months. Edge, which gets support from the Israel Innovation Authority, houses 10 early-stage medical device companies at its Israeli headquarters near Tel Aviv.
What makes Israel a prime place for medical device development?
“Based on my 25 years of experience, I see that to create a medical device requires a multidisciplinary solution,” Mr. Policker said. “It’s not just engineers, not just biologists, not just physicians. You need a diverse group of people to work together. And this kind of multidisciplinary problem-solving is something Israelis are experienced with from the army and from the defense industry.”
Moreover, he said, “the close-knit nature of the Israeli high-tech ecosystem is an advantage. Everybody knows everybody. If I need to find someone in a completely different area of expertise, there is a way to get to that person, maybe more easily than in a large place like the U.S. We’ve been doing that in our incubator for eight years. We start with an unmet need and try to create a solution. The first thing we do is create a group of multitalented people.”
However, once the device is developed and approved, Israelis need help getting it commercialized in the United States.
“You have amazing engineering and entrepreneurship in Israel and can get to a product pretty quickly, and there’s experience in dealing with American regulatory processes,” Mr. Policker said.
“But when it’s time to go to market, there’s a glass ceiling. We are trying to break that glass ceiling, and we cannot do that without real partnerships in the U.S. to invest in the company and give it the ability to hire experienced personnel on the ground.”
Although some Israeli startups get acquired by large American conglomerates, he added, “the goal of the Israel Innovation Authority, and our goal as well, is to build sustainable companies that can go further.”
Asked if anti-Israel sentiment negatively affects Israeli startups trying to gain a foothold in New Jersey, Mr. Policker said the NJEDA partnership actually “creates a bridge between people in New Jersey and people in Israel. I don’t know anything better to relieve tensions than working and succeeding in creating new things together.”
Investors interested in the Edge Medical Ventures fund may contact its New Jersey-based representative, Eileen Ke, at eileen@edgemed.vc to learn more.