The Ofer brothers' Einav group, operators of the Naiot Technological Center, and the Zisapel brothers' RAD BioScience group, operators of the RAD-Ramot bio-medical incubator at Tel Hashomer, won a tender to operate two biotech incubators. The tender was published by the Chief Scientist of the Ministry of Industry and Trade.

Teva Pharmaceuticals (Nasdaq:TEVA) was widely expected to win. The Israeli drugmaker was partnered with Johnson & Johnson (NYSE:JNJ) in the tender bid. Teva's team also included Pitango and Giza, two leading Israeli venture capital funds.

But when the chief scientist, Carmel Vernia, considered expanding the tender to include a third candidate, he elected for Professor Max Hertzberg's BioDiscovery - which operates the private Eager Bio incubator in Ashdod - rather than Teva as the third winner. BioDiscovery had proposed establishing its incubator in Be'er Sheva.

The assumption is that Teva was not selected because the members of its team did not have any experience in operating technology incubators.

The establishment of two biotechnology incubators is one of the recommendations of the Monitor group's February 2001 report. The report recommended a series of steps meant to enable effective transition of technologies from research institutions into industry, and to improve early stage biotech companies' chances for success.

The report concluded that the chief scientist's previous technology incubator program was not suitable for nurturing successful biotech companies. The office therefore decided to establish two biotech-only incubators.

Vernia said the decision on the tender winners was tough because of the high quality of all of the contenders. He expressed hope that the winning bidders would find a way to incorporate the unsuccessful bidders in their biotech incubators. Vernia, who is slated to leave his position at the end of the month, said he would recommend to the next chief scientist that an additional tender be issued for a biotechnology incubator to be located in a peripheral area.

The RAD BioScience group consists of the Zisapel brothers, the Israeli VC fund Star, the German fund TVM and other international funds, as well as German giant Merck.

The new incubator will be managed by Dr. Vicki Rabenou-Gura, who also directs the Rad-Ramot biomedical incubator near Tel Hashomer in Ramat Gan. According to Rabenou-Gura, the new incubator will be established immediately in RAD's offices at Har Hotzvim in Jerusalem.

The Ofer brothers formed the Einav group with Genzyme (one of the five largest biotech companies in the world) and the Israeli biotech firm BTG. The group also includes the American VC funds MPM and Equity4Life. The new incubator will be established in Rehovot, where one of its service providers - the Weizmann Institute - is located.