8 While these companies offer solutions in the health or medical space, they borrow and use tools from the hi-tech industry, meaning the relevant talent for starting such companies is available in the ecosystem. The investments needed to make progress in such companies are sometimes comparable to the investments needed in the hi-tech space, and so we have witnessed some of the traditional hi-tech investors becoming increasingly more interested in digital health companies. CliffordDavis, a partner and co-chair of the International Corporate Practice Group at S. Horowitz & Co., adds: “Our health innovation clients (as well as technological hubs of universities whom we represent in this field) are continuing to receive investments at the same rates as before. It must be remembered that there are funds out there with money raised over the past couple of years and those funds must be invested in order for management to reap the benefits of carried interest – so it is too early to state whether there is any trend by looking at absolute numbers in funding. The relevant part of the pipeline should be looking at two sources of financing – pharma who have their own VC arms, or wish to embark on collaboration and R&D – and this sourcewill, to an extent, be agnostic to geo-political considerations, and VC funds – the latter will be more sensitive, and it will be interesting to note if during this year amounts being raised by funds for future investment will drop.” The funding growth curve might slow due to the sustained war in Ukraine, supply chain disruptions, and rocky public markets. As David Rosenthal, co-chair of Dechert’s Global Corporate Finance and Capital Markets Practice and co-lead of the firm's Life Sciences Practice, cautions: “The public markets are close to being shut. Things have not been this quiet in many years. With valuations so low, companies are reluctant to sell shares at such depressed (and relatively dilutive prices). Often, the deals that are getting done are structured deals” but goes on to add that “deal making will presumably commence later in the year as companies cannot wait any longer to raise capital and valuations will be perceived as attractive to investors.” Greenberg Traurig’s Adam Snukal adds. “While we are seeing a slowdown of some degree due to global instability, supply chain challenges and market corrections, the life science vertical seems to have more staying power as compared to several others. The obvious reason for this is – the particular human condition that these companies seek to address isn’t likely to change anytime soon. In fact, life science (while not without its challenges) has historically manifested a certain degree of staying power amongst investors whileother industries cameandwent.So,all inall,while I doexpect there tobe a small drop in investment dollars dedicated to Israeli life science companies
RkJQdWJsaXNoZXIy MjgzNzA=