Early 2020, pre-COVID-19 pandemic, reports summarizing the recent decade showed rapid progression of the life science industry. As our population continues to age, the demand for health care will increase rapidly. According to the Central Bureau of Statistics of Israel, the population aged 65 and over will increase from 978,000 in 2017 to 1.6 million in 2035, representing change form 11% to 15% of the total population.
Early 2020, pre-COVID-19 pandemic, reports summarizing the recent decade showed rapid progression of the life science industry.
As our population continues to age, the demand for health care will increase rapidly. According to the Central Bureau of Statistics of Israel, the population aged 65 and over will increase from 978,000 in 2017 to 1.6 million in 2035, representing change form 11% to 15% of the total population. In the USA, according to U.S Census Bureau, the population aged 65 and over is suspected to increase from 52.4 million today, to 73 million in 2030, representing 21% of the total population. Population ages thus expand the potential for new drugs, treatments, and equipment.
Furthermore, the technological innovation we are witnessing in recent years did not skip the life science industry. On the contrary. AI, Machine Learning, Big Data, and Robotics are being included in life science research, development, and products, as in the Hi-Tech Industry. This trend probably won't disappear in the coming years and will promote rapid evolution and progress in this industry.
Some Israeli Life Science Industry Numbers:
According to Israel Advanced Technology Industries (IATI), Life Science companies in Israel are accounted for 17% of the total fundraising sum of tech companies in 2019. Israeli life science companies raised a total of $1.5 billion in 2019, similar to the amount raised in 2018 ($1.53 billion). In Q1-2019 there were approximately 1600 active life science companies in Israel, being a working place for more than 83,000 employees. The percentage of companies in an advanced stage in 2018 and previous years stood at a rate of 38%. The remaining 62% were mainly in their R&D stage.
And Then Came The Pandemic
We can't ignore the COVID-19 pandemic in our discussion as some predict it will have an even more significant impact than the financial crisis of 2008. In a recent report issued by IVC and ZAG-S&W reviewing Q1-2020 in the High-Tech industry, it seems young companies in seed and 1st round stages suffer the most having a set back in fundraising. We will probably see these difficulties continue in Q2-2020 and furthermore.
But what about the life science industry? As I state my own opinion and estimation after talking to executives in the life science industry, it depends on the companies' field.
Companies in the heart of fighting against COVID-19 are already getting a boost for their R&D and clinical stages, for example, the FDA's emergency use authorization to Gilead's remdesivir. Unfortunately other companies in different scientific fields, especially the ones in early seed stages, will suffer from difficulties in fundraising, similar to the High-Tech industry.
But there is another circle to consider. As the pandemic forced us to be remote from each other, it also emphasized the need for great progress in digital services and telemedicine. Therefore, it seems reasonable to estimate that companies developing products for this purpose will be able to prosper in this challenging period if they seize the moment with the right leadership and vision.
Post-Pandemic Future
The recent pandemic brought us many challenges and difficulties and also taught us our health and well being can be dramatically disturbed in a blink of an eye. All of this and more, greatly emphasize this is still actually an era for the thriving of the life science industry.
Sources: IVC Annual Israeli Tech Review 2020 | IVC-ZAG Tech Funding Report Q1/2020 | IATI Annual Israeli Life Science Report 2019 | Cushman & Wakefield Life Science 2020 The Future is Here