Israel’s Medtech Looks To A Future Beyond Start-Ups

• Under a major change to its 1984 R&D law, Israel has set up a new Innovation Authority that will be able to build further on the successful life sciences investment record of the Office of the Chief Scientist (OCS).
• The country was once regarded mainly as an ideas incubator for MNCs to selectively cherry pick, but the climate is changing as more stakeholders see the value in developing local R&D breakthroughs to strengthen Israel’s life sciences infrastructure.
• Extensive public and private funding programs are available to support local R&D, and a somewhat unique program of informal mentorship is employed by local companies seeking advice on their next – or first – step.
• Image processing and analysis, big and predictive data analytics and distributed diagnostics are some of the key R&D trend areas, as identified by Israel’s largest VC fund Pitango – a co-partner with Medtronic and IBM in a new digital health incubator.

Who hasn’t heard the talk about Israeli business flair, enthusiasm, passion for the task and determination to succeed? It’s no myth. Take a walk to the Israel Pavilion at the annual Medica exhibition and see frenetic networking and dealmaking at a pace that makes the neighboring busy stands seem positively pedestrian by comparison.

The 2015 event, held in November in Düsseldorf, Germany, was typical. Over 50 local companies, most of them crammed into a central position in Hall 16, were showcasing the entire range of hospital-to-home care via primary, community and nursing home care medical device solutions – from minimally invasive systems through diagnosis, patient monitoring, telemedicine, cardiovascular, orthopedics, wound management, ENT, disposables, implantables, endoscopes and infection control.

Companies like Neuronix Ltd, Hip-Hope Technologies Ltd., Core Scientific Creations Ltd. and EarlySense Ltd. convey a clear impression: Israel’s life sciences industrial activity is on a steeply upwards curve, and the local view of how local entrepreneurial companies should be supported and developed is changing. Israel’s largest VC investment firm and one of the leaders in life sciences, Pitango Venture Capital, has observed a maturing of approaches and a new dimension to the Israeli life sciences sector. The Herzliya firm has been tracking developments and tailoring its own model accordingly.

The Ministry of Economy, which set up the Office of the Chief Scientist (OCS) to provide public sector support to the medtech and other industries from the very earliest stages, sees this too. It has recently adapted its offering to be able to provide more targeted assistance to an industry in transition. Both public and private investors are looking to help companies that are prepared to do the R&D that brings about disruptive and health care-transforming innovation.

Israel’s industry may be in transition, but the groundswell of life sciences R&D activity going back over many years has already helped the country become a global technology R&D center. Its strength stems from its inter-disciplinary capabilities, specifically the ability to bring together medicine, clinical expertise, materials science, electronics, software expertise and engineering know-how. Pitango general partner David Israeli, MD, makes this observation in an interview with IN VIVO (see below).

And multinationals that have already made Israel a regional base are also playing their own particular role. There are about 300 high-tech R&D centers of MNCs in Israel, most of which originated as a result of acquisitions of Israeli companies. They are useful in many respects, and while developing breakthrough health care technologies for global launch, they serve as a breeding ground for future Israeli managers in the areas of R&D, sales and marketing.

Some of them go even further in exploiting the available opportunities, and enter the incubator field. Medtronic PLC, IBM Life Sciences and Rambam Medical Center are the latest jointly to take this step – in a venture that targets the development of digital health technologies. Pitango is also a partner in this venture (see below), which is based in Haifa.

Other MNCs have taken this route into local incubators – for instance, Merck Serono SA establishing a strategic bioincubator, Inter-Lab, in Yavneh, with a $13 million investment; Samsung Electronics Co. Ltd. setting up local innovation centers (having operated directly in Israel since the company’s 2007 acquisition of Ramat Gan-based Transchip Israel), which provide a platform to collaborate with local digital health companies (like EarlySense – see below) and others; and Roche signing an agreement in 2009 to partner with life sciences venture capital fund Pontifax Funds to provide financial support and relevant expertise to selected young biotech and pharma companies in Israel. Other major companies involved in incubators are mentioned below.

All of this has the support of the Israel Advanced Technology Industries (IATI) association, which has grown since its founding in 2012 to become the largest and most influential local high-tech and life sciences networking and umbrella organization. Under its CEO and founder Karin Mayer Rubinstein, IATI has secured the membership of every type of stakeholder group in the life sciences and high-tech sectors.

In global terms, Israel is a country of modest size (its population is 8.2 million) that is frequently paired with the expression “punches above its weight.” Given that the home market is just a small part of the average Israeli medtech company’s strategy – and its main markets are the EU and the even more distant US – it pretty much has to.

Israel’s largest life sciences sub-segment is medical devices and health care IT, which accounts for over 60% of the approaching 1,400 life sciences companies locally. In the medical device arena, Israeli engineers are known for world-class innovations in digital imaging, medical lasers, telemedicine, early diagnostics and smart surgical equipment, among others.

IATI Stars In Support Role

There is a tailwind blowing strongly behind the life sciences industry, which has undergone rapid expansion of late. IATI’s Mayer Rubinstein says, “It’s amazing what went on here in Israel in the last decade – and this last year [2014–2015] was the best of the last decade, if we’re talking about M&A and IPO life science exits, and investments.” She adds, “We are very proud of what’s happened.”

Mayer Rubinstein explains that IATI, which she founded (by a merger of the various industry organizations) four and a half years ago, represents all sectors of the ecosystem in Israel: start-ups to fully grown companies – large and small high-tech and life sciences companies – including those in the pharma, diagnostics, biotech, medical devices and “health tech” sectors; incubators; venture capital funds; multinational companies (MNCs); the technology transfer companies of universities and hospitals; and other private sector stakeholders that have a high-tech and life sciences focus.

“IATI predicted the coming together of the components of 'tech health' in an ecosystem extends to all types of stakeholder. I was asked to oversee the merger to form IATI, and serve as a ‘connector’ between the private sector and the government. It’s a role that also extends to business development and creating opportunities for our 700 members, Mayer Rubinstein says.

IATI is fully private, non-profit and independent. It has a modest staffing of just 12, and in many ways looks and works like a start-up, in being very active, dynamic and fast in responding. “We provide constant value to our entire membership of the whole ecosystem. Our role is to connect, make introductions, create business opportunities, support government activity and promote technology education – all in order to promote the Israeli high-tech and life science industry and to make sure it stays our national leading industry.”

She adds, “We’re a high-tech nation and an innovation nation – but we’re also a health care nation.” The organization plays a major medtech industry support role, and has been a catalyst for much of the positive development in recent years by providing the networking platform and offering advice.

It is involved in 200 or so events annually, and connects companies and makes introductions in and among stakeholders in the thousands every year. In late May, it holds its annual IATI Biomed conference, which is considered to be one of the world’s largest conferences. The 2016 event was on May 24–26 in Tel Aviv. It also hosts overseas business delegations, organizing tours of start-ups and showcasing local R&D.

IATI is releasing a new industry report on the Israeli medtech sector in the coming months. Last year’s 2015 report provided a lot of insight into the market and local capabilities, showing that the medical devices sector raised a massive $410 million in 2014 and there were 13 public offerings by Israeli life sciences companies on NASDAQ that year, both of which were decade highs.

The association also operates a comprehensive and updated life sciences database covering nearly 1,400 companies – MNCs, start-ups, VCs incubators, academia, etc. – including start-ups that are not part of the paid-up membership. The database includes some 300 digital health companies, the creation of which has been on the rise in recent years. (See Exhibit 1.)

IATI is playing a strong support role in the building of the new Innovation Authority. This is the body that will replace the current structure of the Office of the Chief Scientist (OCS), which is part of the Ministry of Economy.

OCS offers a broad range of grants and other support tools, which many local start-ups – and beyond – have benefited from. The restructure that has brought about the Innovation Authority is a positive move and will hopefully empower it further, says Mayer Rubinstein.

OCS has been broadly responsible for implementing government policy on supporting and encouraging industrial R&D. Most local incentive programs are governed by the 1984 law on the encouragement of industrial research and development (the R&D law), an instrument designed to prompt awareness of and interest in R&D investment, with the government taking a lot of the risk in such projects. The forthcoming changes won’t affect that, and the chief scientist will chair the new authority.

The restructure is an acknowledgment that Israel’s industry is reaching a new stage of development. When the Ministry of Economy’s MATIMOP was founded as the international arm of OCS, it had a remit to support industrial companies and had a priority of taking care of start-ups. But after 20 to 30 years of high-tech and life sciences industry progress, start-ups are now only part of the story.

Mayer Rubinstein says, “Israel is no longer just a start-up nation.” She adds, “We now have also MNCs, privatized incubators, technology transfer offices, academia, and we have ‘grown up’ Unicorn companies.” It is clear that the whole high-tech and life sciences ecosystem is reaching new stages of development. (See sidebar," Why Is Israel So Effective?")

OCS “Upgraded” To Innovation Authority

Ora Dar, head of life sciences at OCS, says the office has been upgraded in becoming the Israel Innovation Authority. The change was enacted by the Israeli parliament (the Knesset) on November 2015 and came into effect on January 1, 2016, following a major amendment to the R&D law. The Innovation Authority, more independent than the OCS, should have greater powers to set up new platforms.

It will also have more flexibility than the OCS in launching funding tracks and instituting new guidelines that will govern the transferability and licensing of the resulting technology. But the mission will remain broadly similar: supporting the high-tech industry (including the life sciences industry) and sharing the risk with entrepreneurs and other investors in terms of developing products.

OCS grants funds for applied research from the academia stages and beyond, and also has a network of incubators. Dar points to several government incubator licensees (companies like Medtronic, IBM – see below; Philips Healthcare, Teva Pharmaceutical Industries Ltd., Johnson & Johnson, Boston Scientific Corp.and Takeda Pharmaceutical Co. Ltd.) in these incubators for start-ups. Successful applicant companies can get 85% of their budget from OCS. “This is very high leveraging, and we expect highly innovative technologies to be developed,” she notes.

OCS also funds companies that are facing high volumes of expenses during, say, Phase III clinical trials in the biopharma space. The support can reach into the realm of several million dollars per year. The funding can continue for several years – up to 13 or more has been known.

But OCS does not support companies that do not continue to perform as they had originally claimed. Annual evaluations and other data reviews are conducted to monitor progress. Guy Lerner, executive vice president of business development at Hip-Hope Technologies (Hod-Hasharon), observes that it’s a very structured process. “They check on a regular basis that everything is according to what you planned,” he says.

In all, about 30% of OCS’ budget – equivalent to some $100 to $110 million annually – goes to the life sciences via its different programs. (See Exhibit 2.) The grant cash – which is regarded as “conditional loans” – is paid back only once commercial sales are underway. No calls for proposals are issued by OCS, but companies with a plan in place can apply for funding at any time – but in January only if the applicant is seeking more than NIS10 million ($2.64 million).

The fund is five times oversubscribed, and Dar says that the threshold this year has been set high. The R&D trends that emerge are tracking the fast-growing demand for digital and connected health solutions, imaging solutions and devices that can be used in patient data collection.

OCS has played a vital bridging role, but so has MATIMOP, given that Israel is not a big enough market for the products it develops. “We do need to go global,” says Dar. MATIMOP acts on behalf of OCS as the national agency responsible for encouraging and assisting in the participation of Israeli enterprises in international bilateral or multilateral cooperation programs for industrial R&D.

The OCS/MATIMOP aim is to promote Israeli R&D as well as benefit the individual collaborators. The local subsidiaries of foreign companies are granted the same benefits as a domestic company in terms of the applicable rules and regulations, and support programs available.

OCS Funds

The main program run by the OCS is the R&D Fund, under which 30% to 50% of costs can be granted. In theory, it is unlimited, and can be used as a tool for both nascent and mature companies to develop the processes of converting knowledge into functional products.

Other notable OCS funds include:

The Magnet Program, which supports generic R&D that is as yet far from practical implementation in the market. This is intended to be used by companies to build the necessary connections with academia that will lead to advanced products. The Magnet Program offers grants of up to 66% of the approved budget. The Magnet framework also includes programs to support academic applied research (grants of 85% to 90%).

The Incubator Program, which grants early-stage companies up to 85% of the budget; and the Tnufa Fund, which is a first-steps program for promoting pre-R&D stage technological entrepreneurship. It has a modest budget and is aimed at single entrepreneurs, who may be entitled to a $55,000 grant that allows them to develop prototypes, apply for IP and complete market evaluations.

The establishment of the Innovation Authority is throwing a spotlight on Israel’s serious intent to fund R&D at all stages far into the future. But the profile of the Israeli government as a funder of R&D is already high worldwide. For instance, OCS was involved in the establishment of OrbiMed’s first fund in Israel in 2010. “We found there was a gap specifically in biopharma and devices, so we decided to push for more funds,” says Dar. The OrbiMed fund is now in its sixth year.

The Example Of EarlySense

Avner Halperin, the founder and CEO of EarlySense, has a clear view of what has happened in Israel. “In the past, Israeli high-tech entrepreneurs would often make the mistake of getting excited about the technology but would fail to look properly at the business model and market,” he says.

The Ramat Gan-based company, which has become the market leader in contact-free continuous monitoring (CFCM) for the medical and consumer wellness markets with its under-mattress sensor technology, is different.

“We realized early that we needed to do our own ‘early sensing’ of the business model.” That was in 2005–2006, and the company was able to identify at an early stage that its original plan to develop a home-use sensor for monitoring asthma in children should be put aside in favor of prioritizing a hospital solution. EarlySense took on that project alone – that is, without a partner in the market.

And now, following success in the hospital market, the company has been bringing the technology back into the home, because the smartphone and digital health revolution have made the technology available and cost-effective for every home. The drive now is to make the technology available throughout the continuum, and to get more value out of the data that are being collected in large volumes in hospitals, nursing homes and now also the home.

EarlySense has taken a strategic view of partnerships. Halperin says the company has struck a few very significant partnerships, one of which is Samsung, the focus of which is a below-mattress sleep analysis solution for the home (SleepSense) and integration with Samsung’s Smart Home offering. The accuracy and the outcomes of EarlySense’s technology have been shown in clinical studies on over 10,000 patients already. The Samsung product is scheduled for launch in the first half of 2016.

Beurer GMBH, based in Ulm, Germany, is progressing along a different avenue with the technology. Its SE 80 Sleep Expert helps users understand and improve their sleeping patterns and monitor their well-being and overall quality of sleep. In another deal, ICON Health & Fitness Inc. (Logan, UT) is using EarlySense sensors for measurement and improvement of sleep and overall fitness by monitoring sleep quality and vital signs. In all EarlySense collaborations, the partner’s brand is the lead and EarlySense’s name is highlighted as an “EarlySense Inside” strategy, leveraging the company’s proven medical track record, says Halperin.

“We are in talks with other partners, as this technology is very easy to integrate with multiple solutions,” he adds. “We believe that the market opportunity for a company like ours is so big we cannot cover it on our own. The long-term vision is to collect more data, which allows us to keep improving health throughout the health care continuum.”

EarlySense has already monitored 300,000 patients, and the data are used to make the sensor algorithms better. Such data would also have huge value for insurance and pharmaceutical companies that want to get early insight into disease trends. “The data we collect are ours," Halperin explains. "We are working on sharing our analytics with our partners; however, we are strict about data governance and privacy issues.”

Commercial And Customer Concerns To The Fore

As to the ongoing changes, Halperin observes that Israeli companies have always been fast, but in the olden days, entrepreneurs were almost always technology-driven: they were focusing on the technology world. Only very late in the day did they consider the options: how do I sell it and make money out of it?; or how do I partner and make money out of it? Many companies got stuck.

But now, it’s about having a core technology with a strong business value proposition and companies understanding that they have to drive economic and clinical outcomes for their customers. If not, the product won’t be successful, a concept that more and more businesses in Israel seem to understand.

The challenge for Israeli companies is that Israel is geographically very far from its main markets – the US and EU. But the local support structure (as referred to above) has many elements that also include a thriving VC base and angels willing to invest in young and risky ideas.

Halperin also points to the sometimes less celebrated but highly valued inter-entrepreneur support culture in Israel. “For me, in every stage of the development of EarlySense, I could contact up to 10 entrepreneurs who had already done work like ours, and who had been successful two to three years ahead of us, for advice and networking. And of course I’d return the favor to those two to three years behind me.”

This tight-knit community is pretty unique to Israel, says Halperin. “You hear about the famous six degrees of separation, but within Israel’s high-tech industry, it’s pretty much a one-hop model,” he adds. “You always have a mutual friend, or there’s someone you have been in the army with. The likelihood is that you’ll get strong support from this networking system, which is very unique.”

In the past, the Israeli high-tech industry has been criticized for not growing enough large companies. “It’s been one of our limitations; you can still count on the fingers of one hand the companies that have started up here and sold in the hundreds of millions of dollars,” Halperin says. There are quite a few in the tens, but very many who have not even reached that level. “But we are all for progress, and we are now seeing more companies being built into significant players and not merely being sold off to others.”

He continues, “We believe at EarlySense that there are companies like us who have set up a platform with a wide range of applications that can be built to earn revenues in the hundreds of millions of dollars – or more. We are focused on doing that, and for that you need the entrepreneurs and the companies, and then for the investors to have patience to allow that. We are seeing more of that as well.”

Besides that, the “externality” is supported: the theory is that any start-up that succeeds accrues benefit not only to itself but also to the wider economy in Israel. EarlySense received a government R&D grant in 2008, at the very time of the stock market collapse. These were very challenging times, but the grant was very important for the company’s continued survival. Such actions have helped to spawn many companies and supported R&D.

R&D Trends

For David Israeli, general partner at Pitango Venture Capital, which is the largest VC in Israel and one of the national leaders in lifesciences, three clear R&D trends are emerging in Israel.

“One trend we are seeing is toward image processing, image analysis and all the automated tools that are emerging to support the work of radiologists.” MR, CT, ultrasound, etc., are increasing the amount of data, and the need for tools to support the work of the radiologist will also grow. “We will see a large number of companies coming out of Israel who are involved in machine learning/deep learning computation and analysis.”

Another trend is in big and predictive data analytics – in the context of improving the actual treatment of patients. “What we’re seeing is that well-thought-out algorithms are able to look at historical data around oncology, intensive care, trauma, sepsis, etc. Analyze the clinical course of enough patients and you can tease out trends and pick up early warning signs showing how the natural course of a disease/infection could have been changed.” He believes we are seeing predictive tools for both common and rare complications, and in the near future will have forecasting capabilities even in low-medium risk patients. “We will see many companies launched in that specific area over the next few years,” says Israeli.

The third trend is in “distributed diagnostics” (another term for POC/home-based diagnostics) – anything from sequencing one’s own DNA to running a lipid/blood count panel at home using a cell phone. “We are not there yet, but we will get there and it will revolutionize health care in a deep and concrete way.” The activity here is largely driven by the multidisciplinary nature of these projects – microfluidics, microelectronics, very sophisticated algorithms and minute amounts of reagent that are used in the lab-on-a-chip world.

Pitango’s big news of late is its participation in a new seed-stage digital health incubator, in Haifa (also home of the Technion – the Israel Institute of Technology). Partially funded by the OCS, MindUP has Medtronic PLC, IBM Corp. and the university research center Rambam Medical Center as co-partners. The team won the tender published by Israel's OCS in September 2015, and is authorized to operate the incubator for the next eight years.

Israeli says, “Pitango is actively involved and very proud of the initiative.” The incubator will focus its investments in the areas of big data, predictive analytics, telemedicine, cloud computing, wearable and implantable sensors, advanced POC diagnostics, personalized medicine and hospital IT systems. The license came into effect on March 1, 2016 and the first companies are now being screened.

For the VC investor, it is an opportunity to get involved in earlier-stage investments than it has before, but in a methodical way, by bringing “serious forces” around the table. MindUP has a dedicated management team, a CEO a CTO and a VP of business development. “We funnel a considerable amount of deal flow into the incubator and bring a lot to the table,” says Israeli. Pitango sees digital health care – the “unprecedented convergence of digital health care technology and the delivery of health care” – as a massive trend for the future.

About 25% to 30% of Pitango’s activity, in terms of exits, IPOs and money under management, is dedicated to life sciences. Israeli says, “We will continue to invest in interesting, disruptive medical devices – implantable or not – that respond to large unmet needs. We don’t do ‘me too.’ We will also continue to do biopharma investments as another part of the innovation continuum.”

New Age, New Criteria

Israeli says Israel does well in combining multiple disciplines into completely new areas of implementation. Entrepreneurs in life sciences are not necessarily clinicians or PhDs, rather they tend to be software, mechanical or electrical engineers who find they can apply their expertise in the medical arena.

Indeed, there is a growing trend of engineers moving into this arena. “Where Pitango brings value to its portfolio companies is in the ability to apply technology to a concrete product and a medical unmet need, and ensure the product can be set on a very achievable regulatory and clinical pathway.”

Israeli adds, “We see ourselves first and foremost as participating in an ecosystem, and contribute to the industry in ways that are above and beyond our portfolio – including helping large MNCs get access to the market. That’s part of our responsibility as the major player in the local VC industry.”

Speed to market and getting the clinical/regulatory/reimbursement package right is especially important in digital health care. Israeli says, “The quality of eligible ideas that we are seeing is increasing. Our work is getting harder, but that’s all to the good!”

Back At Medica…

Meanwhile, back in the gridlocked gangways of Medica’s Hall 16, where Israeli medical device business executives and their clients were trying to dodge film crews, reschedule meetings or simply find one square meter and two chairs to sit down and be heard above the buzz of the beehive, other companies had varying takes on their own R&D and pre-market experiences.

Kafr Saba-based Core Scientific Creations has a bioabsorbable hemostat that is able to stop moderate-to-severe bleeding – even very severe arterial bleeding. The all in-house produced WoundClot Hemostatic Gauze is made of non-oxidized cellulosic structure. Speaking to IN VIVO, the company claimed to be the first in having a non-compression application hemostat.

Privately owned Core Scientific was founded by CEO Yuval Yaskil in 2012, and realized quickly that it had a “game changer.” The CE-marked Class III product was launched in 2014. It also has US FDA 510(k) and will have a US PMA in two to three years for the surgical market. “You need to have a product in the US,” the company said. It did R&D work with the US Army on the product, which it says addresses an unmet need.

Neuronix: Israel As A Test Market

A few meters across the exhibition hall, Neuronix Ltd. was unveiling its entirely privately funded Alzheimer’s disease solution, the NeuroAD system. The Yokneam company’s therapy device is a first on several fronts: in being a non-pharmacologic, non-invasive treatment for AD patients and in being presented first as a self-pay treatment in this immense clinical space.

Company president Gary Gregory notes that the model has already been proven in Israel in terms of patients’ willingness to pay for the service. “Patients and families have showed an ability to invest in the treatment,” he says. “Launching a product through a patient self-pay approach is a new pathway for health care, and also a meaningful vehicle for introducing new products and treatments.”

In a related area, transcranial stimulation for depression has been used in the EU on a self-pay basis, but not in significant numbers.

The Neuronix technology is based on its Non-Invasive Cortical Enhancer, which uses magnetic stimulation concurrently with cognitive training. The combination induces long-term potentiation, which is associated with learning and memory processes.

The solution was brought forward with proof-of-concept studies in Israel and was then taken to Harvard University in the US to further advance the science. Neuronix is now completing US clinical trials ahead of an FDA submission planned for 2016. The US risk class is 510(k) de novo. The device obtained CE mark approval a couple of years ago for the treatment of mild-to-moderate AD.

Neuronix is targeting the sixth-leading cause of death globally – and moreover one that is accelerating at exponential rates, whereas cardiovascular disease, cancer and other major diseases are declining. It is also a disease with limited treatment options.

Gregory was using Medica 2015 to initiate the product’s commercial launch. He says, “We’ve tested the product in Israel and in the last two years we have seen a growing adoption from their health care consumer market. The initial efforts in Israel and our extensive commercial launch establish a strong runway to build our business, and for us to ultimately pursue broad-based reimbursement for this breakthrough technology.”

Hip-Hope: Prevention+ Protection Prioritized

Another company opting for the privately paid market first is Hip-Hope Technologies, whose Hip-Hope product is a smart wearable device, designed as a belt, worn around the user's waist. A multi-sensor-type fall detection system integrates data received from both motion and proximity sensors, and activates two large-sized airbags, protecting the wearer’s hips, once an impending collision with ground surface is detected.

In terms of the business model, Hip-Hope EVP Guy Lerner says that the target groups are those who need it the most – the elderly who have fallen once already, those who are in or after rehab, and those at greatest risk of another fall. He says that Hip-Hope does not expect governments to pay for the product until it’s been proved.

But falls and fractures are a growing problem. Hip-Hope’s preventive and protective device addresses a market in which 30% of all cases die in year one, and the rest suffer quality-of-life limitations. The R&D was initiated by Hip-Hope CEO and founder Amatsia Raanan after a personal tragedy, when his mother had to be placed in a wheelchair after suffering two broken hips in separate incidents, but sadly died. Seeing the problem at first hand, Raanan started to look for a solution.

At Medica, Lerner was seeking small distributors to work with in selected small markets, and for investment to finalize the R&D and take it to market. In the six months since Medica, Hip-Hope has come to the end of the R&D process and is manufacturing the first units ahead of starting trials in Europe. Hip-Hope is actively looking for investors in the US, where the plan will be to set up a joint venture or team up with a large national provider to cover the whole country.

Hip-Hope has had investment funding as well as OCS grants. Lerner says, “With OCS, you need to submit a new plan every year. We are now in our second year of OCS funding. They cut the ties when you start selling, but you can move from one program to another. That support is very important and can be pretty substantial.”

Hip-Hope CEO Raanan is continuing to drive the R&D to improve the algorithms and the belt, making it smaller and lighter, as Hip-Hope moves it into markets around the world and addresses a market of 2 million people annually who suffer from falls in the western world alone.

EarlySense’s Avner Halperin underscores the need to take a flexible view of what the company R&D direction should be. “For us, it’s been a journey, like it is for many start-ups – you start at one place and end up somewhere different.” He realized in good time that, in the company’s first target market, there wasn’t a real business model for EarlySense’s type of technology, even though the technology worked well.

He adds, “That’s the whole story here: build the technology, find the right market for it and adapt quickly when the market develops.”