Start-up Nation

Mintz and his partners were about to revolutionize the process of genetic sequencing. Merck bought Compugen’s first sequencer in 1994, a year after the start-up was founded and long before the human genome had been successfully mapped. But this was just the beginning. In 2005, Compugen transformed its business model and moved into the drug discovery and development arena, and did so using techniques different from those that dominate the pharmaceutical industry.

Combining mathematics, biology, computer science, and organic chemistry, Compugen has been pioneering what it calls “predictive” drug development. Rather than testing thousands of compounds, hoping to hit upon something that “works,” Compugen’s strategy is to begin at the genetic level and develop drugs based on how genes express themselves through the production of proteins.

A major aspect of Compugen’s approach is its unusual combination of “dry” (theoretical) and “wet” (biological) labs. “Imagine working with Big Pharma overseas or in another part of the country,” Alon Amit, Compugen’s VP for technology, explained. “The back and forth that you can expect is a lot slower than if you have the biologists and mathematicians literally on the same floor discussing what to test, how to test, and inform the models.”⁴

Though Israel’s largest company, Teva, is in pharmaceuticals, as are Compugen and a number of new Israeli companies, the more crowded field for Israeli start-ups is that of medical devices, many of them related to drug delivery. This field seems to nicely fit the Israeli penchant for multidisciplinary thinking, as well as Israelis’ characteristic lack of patience—since drugs take so long to develop.

One such mashup-based company is Aespironics, which has developed an inhaler the size and shape of a credit card that includes a breath-powered wind turbine. The problem with many inhalers is that they are tricky and expensive to manufacture. A way must be found to release the drug effectively through a wire mesh. In addition, this process must be timed perfectly with the breath of the patient to maximize and regulate the drug’s absorption in the lungs.

Aespironics seems to have solved all these problems at once. Inside the “credit card” is a fanlike propeller that is powered by the flow of air when the patient inhales from the edge of the card. As the propeller turns, it brushes against a mesh with the drug on it, thereby knocking the drug off the mesh and into the air flow in a measured manner. Since the propeller works only when the user inhales, it automatically propels the drug into the patient’s lungs.

Putting this together required an unorthodox combination of engineering skills. In addition to experts on inhalers, Aespironics’ team includes Dan Adler, whose specialty is designing gas turbines and jet engines. He was a professor at the Technion and at the U.S. Naval Graduate School and a consultant to such companies as General Dynamics, Pratt & Whitney, and McDonnell Douglas.

Mixing missiles and pills, jets and inhalers may seem strange enough, but the true mashup champion may be Yossi Gross. Born in Israel and trained in aeronautical engineering at the Technion, Gross worked at Israel Aircraft Industries for seven years before leaving to pursue more entrepreneurial endeavors.

Ruti Alon of Pitango Venture Capital, which has invested in six of Gross’s seventeen start-ups, argues that his multidisciplinary approach is the key to his success. “He has training in aeronautical engineering and electronics. He also knows a lot about physics, flow, and hemodynamics, and these things can be very helpful when thinking about devices that need to be implanted in the human body.” Plus, Alon reminded, “he knows a lot of doctors.”⁵

Some of Gross’s companies combine such wildly diverse technologies that they border on science fiction. Beta-O₂, for example, is a start-up working on an implantable “bioreactor” to replace the defective pancreas in diabetes patients. Diabetics suffer from a disorder that causes their beta cells to cease producing insulin. Transplanted beta cells could do the trick, but even if the body didn’t reject them, they cannot survive without a supply of oxygen.

Gross’s solution was to create a self-contained micro-environment that includes oxygen-producing algae from the geysers of Yellowstone Park. Since the algae need light to survive, a fiber-optic light source is included in the pacemaker-sized device. The beta cells consume oxygen and produce carbon dioxide; the algae does just the opposite, creating a self-contained miniature ecosystem. The whole bioreactor is designed to be implanted under the skin in a fifteen-minute outpatient procedure and replaced once a year.