Stef and Morris in the biotech jungle

Two of Israel's most reclusive billionaires bid on incubators<br> * Biotech shines light
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Until recently the group of investors headed by Prof. Max Hertzberg, one of the four groups that submitted tender bids for the operation of biotechnology incubators, has maintained a conspiracy of silence. Now it turns out that two of the biggest billionaires in Israel - Stef Wertheimer and Morris Kahn, each of whom is worth about $2 billion - are active members of the group.

The Wertheimer group, owned by Stef and Eitan Wertheimer, owns Iscar, on of the most profitable companies in Israel, while the Kahn group is headed by Morris, the former owner of Aurec and Amdocs. Both groups joined the consortium of investors that includes the Rothschild group and the Pasteur Institute. The consortium¿s operations will also include a number of the largest biotechnology and pharmaceutical companies in Europe: Aventis, Sanofi-Synthlabo, Biorad and others.

At the group¿s helm is Hertzberg, who founded the Eagerbio private biotechnology incubator in Ashdod. Kahn has invested in all the companies currently operating within the incubator. At Hertzberg¿s side will be Joel Warschawski, the manager of the Rothschild VC fund in Israel and Dr. Debbie Vilcovsky, formerly the head of life sciences consulting at KPMG Israel. Stef Wertheimer will be a board member.

Last Sunday Hertzberg told TheMarker that he has already received commitments of $20-25 million from investors who had joined the group, and expects another $25 million if the group wins the tender from the chief scientist at the Ministry of Industry and Trade. The group is also planning an investment of $50 million over five years, together with additional investors. ¿We intend to become a serious force in biotechnology seed investments in Israel,¿ said Hertzberg.

The consortium, called Bio-Discovery Israel, has created a network of consultants, including Luzzatto & Luzzatto, Patents Attorneys, Yigal Arnon¿s law firm, Kesselman & Kesselman accountants and Quintiles, the largest clinical research organization in the world. The incubator will be built in the high-tech industrial park at Omer and will be run by Hertzberg.

European biotechnology and pharmaceutical companies that have annual sales of over $30 billion will serve as tutorial partners for the young companies in the incubator. Hertzberg says that companies operating the incubator will provide high quality professional assistance and will consider investing in each project.

Ben-Gurion University of the Negev and the Soroka University Hospital will put their infrastructure at the incubator¿s disposal. The group also has plans to transfer the incubator to the science park currently under construction at Ben-Gurion University, while the mature companies will remain at Omer. This will create a continuum between the university campus and the high-tech zone.

Three other groups participated in the ministry¿s incubator tender. One includes U.S. pharmaceutical and medical equipment giant Johnson and Johnson, Teva Pharmaceuticals and the Pitango and Giza Israeli VC funds.

The second group includes the Ofer brothers¿ high-tech group, the Yozma VC fund, Genzyme and an infrastructure group that includes Harlan, which conducts para-clinical trials, the Analyst market research company, and Tami, which operates chemical labs.

The third group is the Rad group, controlled by Zohar and Yehuda Zisapel. Israeli pharmaceutical company Taro decided in the end not to join this group.