Health IT, Startups

U.S. investors with keen interest in digital health move into Israel’s incubator landscape

A digital health fund to invest in Israeli digital health startups has made its first investment — Intendu, which uses body-controlled adaptive videogames to help people with neurological problems.

A digital health fund to invest in Israeli digital health startups recently made its first investment — Intendu. The company provides a way for people with neurological problems stemming from traumatic brain injury to age-related cognitive decline to train the brain through a series of personalized exercises that involve body-controlled adaptive videogames. The goals are customized to each user.

Partners for digital health venture fund eHealth Ventures include Cleveland Clinic Innovations, which is providing resources to the company in exchange for equity, and one of Israel’s largest HMOs, Maccabi Healthcare, are also supporting the fund.

The fund, which has offices on the outskirts of Washington, D.C. and Tel Aviv, is seeking to join an ecosystem of some 21 technology incubators in Israel and would be one of the first to focus on digital health investments. The incubator network is overseen by the Office of the Chief Scientist. Groups vie for tenders that are allotted by the Chief Scientist and only a few are available each year.

In a phone interview with MedCity News, Tom Sudow, the director of business development for Cleveland Clinic Global Cardiovascular Innovation Center, said said it fell in love with the Intendu management team, led by Dr Son Preminger. She previously worked for Microsoft, she has a Harvard MBA and she has a background in rehabilitation.

“We are very impressed with the technology coming out of Israel,” Sudow said.

There has been a growing interest by big pharma and medical device companies to support these incubators so they can get the good seats to spot promising healthcare companies at the early stage. Earlier this year, Johnson & Johnson opened an incubator with OrbiMed and Takeda called FutuRx as did Teva and Philips — Sanara Ventures. IBM is expected to launch an incubator soon.

Levi Shapiro is a general partner with Veritas Ventures’ digital health fund who also runs a mobile health conference. He noted that Israel has a lot of factors in its favor that are making an attractive area for tech investment. Nearly half of Israelis have a Bachelor’s degree. Intel, the largest employer, has 11,000 staff in Israel. About 16 percent of the population are employed in the tech industry.

On the healthcare side, it has a Maccabi and Clalit, the second largest HMO in the world, and they both use electronic medical records. That has led to the development of health IT companies that can provide supporting tools such as clinical decision support. Given the rise in digital health investment in the U.S. and adoption by health systems and payers and the size of the U.S. market, it’s a logical export market for Israeli companies.

Shapiro notes that 80 percent of institutional capital in Israel is coming from global investors.

To get a sense of how much can change in just a few years, I glanced at the roster of Israeli health IT companies that pitched their technology at the Philadelphia-Israeli Chambers of Commerce healthcare conference in 2011. One after another has fallen by the wayside, with the exception of MedCPU. The company, which took part in the New York Digital Health accelerator a couple of years ago, raised a Series B round earlier this year led by Merck’s Global Health Innovation Fund. Another Israeli digital health company are also finding a warm reception in the U.S. is Medisafe, a medication adherence business.

Sudow highlighted some of the digital health priorities for the fund including remote monitoring, improved diagnostics, and tools that analyze big data.

He observed that there are some companies with great technology but are never going to get to market because it does not fit what health systems need. “What we are experiencing is how to get healthcare technology that makes sense.”

 

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