ApiFix, a Treadlines company, was awarded Best Start-Up 2012 by Israel’s Office of the Chief Scientist of the Ministry of Economy for a less invasive, less painful, and less costly option for spine curvature correction. Apifix is developing a truly breakthrough minimally invasive deformity correction system for patients with Adolescent Idiopathic Scoliosis (AIS).
Today’s gold standard for correcting spinal deformities involves fusing an average of 10 motion levels using a large number of screws in a surgical procedure that lasts an average of six hours and costs upward of $100,000.
As opposed to the current procedure, ApiFix uses only two screws to support its ratchet-based, small expandable rod inserted through a small incision in the patient’s back. In addition to the smaller incision, a shortened surgery time (1 hour vs. 4-6 hours) and reduced hospitalization stay.
I interviewed Uri Arnin, Founder and CEO and chief innovator of ApiFix Ltd. about the success of his company and the distinctive characteristics of the Israeli biotech cluster. “We have close communication between companies of the same field and willingness to assist each other. The same subcontractors and advisers support similar companies and help to share the experience,” Arnin said. “We have a fast turnaround of production cycles, due to personal relationship with suppliers.”
When asked about the speed of innovation, Arnin said, “The first R&D cycles are being performed in Israel, ‘quick and dirty’. The pivotal tests and validations are being done abroad. In today’s world it is quite easy to use infrastructure abroad and get its reputation.”
I asked him about obstacles to success for his and other companies. “It is very different from one company to the other,” Arnin said. “In my case the FDA is the biggest obstacle. Not because of the demands but because the long timeline, high cost and uncertainty. Investors are now afraid to invest in breakthrough technologies just because of that. As a summary, I am not optimistic at all about that space. The regulatory atmosphere (mainly FDA) becomes more and more difficult. The prices are going down and the investors have more attractive options to double their money. As a main single comment, the FDA is simply killing the innovation in the field of medical devices.”
I wondered if the strong growth in Israel’s high-tech sector only benefits a small part of the Israeli population. Armin replied, “Most of the money invested in my companies came from the US and most of it was spent in Israel. That means jobs and work for many people.”
I asked him about the quality of Israeli subcontractors and outsourcing. “In my case,” Armin said, “Most of the subcontractors used are on a top level when compared to US and EU, where I had the chance to visit many times. Only when dealing with very unique issues, like micro motors or special ceramic coating, I had to use overseas sourcing.”
Over the years I had read about the importance of the military as a training ground for science, technology, and medicine. Armin’s response took me in a new direction. “In my experience, the army teaches you that nothing is impossible. It teaches you that timing is critical. It teaches you that even when everything goes against you, going forwards is the way to win. It is the commando spirit that is important, not the physical things.”
As noted, an open and honest evaluation of innovation along with the “Commando spirit” provides a positive attitude and work incentive to not give up and succeed Armin stated, “In the field of medical devices most of the ventures fail, for one reason or another. People simply go on to the next one, hoping it will work this time, with more experience and better understanding. If you fail two times your third venture may be much better. In Israel it is not a shame to fail.”
What is it about the Israeli culture that drives the country to grow in biotechnology? What makes this culture different from other? The Israelis may have learned or imitated previous people but so do other cultures. Why does this happen in such a unique way here? Does the need for innovation fuel a cross-fertilization that is greater than the sum of its parts?
“It is the ability to share experience and information that makes a difference. When I have a problem I can call a mate from another company in my field and get most of the help he can give,” Armin said. “I am helping people from other companies all the time. No money change hands. The same is true to every employee in the company, each coming with a different experience. So when you have a company with 10 employees they actually cover a ‘net of information’ that is much bigger.”
Is there a superior or inferiority complex? Is the fact they are surrounded by enemies and already an underdog work in a David and Goliath manner? “Yes, in a way,” Armin stated. “I have no fear to approach Medtronic or J&J and tell them ‘I am doing better than you in this area.’ I know that being big means also being fat and slow.”
What about language barriers? Armin replied, “The only problem is in the US, where speaking in the “wrong” accent is many times close to a crime…”
How has Israel instituted technology to help with understanding dealing with various societies and cultures? Are these practices currently being taught in the schools and colleges?
“Not really,” Armin said. “If you are interested you can learn from other colleagues. Basically, once you respect the other side and once you come with solid science, there is no problem.”
I asked Armin to describe the healthcare environment in Israel and the utilization of any of the new innovations. “My market is the US and the EU. Israel has no real meaning when practicing the new technology. The only upside here is the ability to get real and direct feedback on what you do.”
The key issue, of course, is funding, which comes from various sources, including the Israeli government and the United States government. “The first funding from the government is critical for success. It is small ($0.5M) but easy to get,” Armin said. “The next funding comes usually from the US. You have to do it yourself and this is the most difficult part in the company life. Today it is so much easier to start a new venture in the US. You can get more money with better terms. Also your ability to raise the next round is better as a lot of investors would never invest over the ocean.”
Now is a very unique time in the history of innovation in Israel. Armin said, “In my mind, the main thing that made the change, around 20 years ago, was the internet. The ability to have access to the same information (Science, Patents, Commercial, Etc.) just like an American scientist has made it possible for people in Israel to participate in the game. Then, our ability to do it faster and cheaper made us attractive for some investors.”
Much has been written and said about the Israeli personality, and I asked Armin about it. “Israelis are so much different from each other. There is nothing common you can tell about them. In a very general way you can say that they are very open and clear. You will hear from them exactly what they think, right on the spot, if you ask them or not…. People may like or dislike that. When talking with Americans, many times I go out of a long meeting having no idea what they really think,” Armin said.
I asked Armin about the most important thing he’s working on right now. “I am working on a revolutionary way to correct scoliosis, using everything I have learned along my life and especially the experience in the spine field I have gained along the last 12 years. The hardest decision I've made so far is to start this venture and not do something else.” I asked Armin about the greatest obstacles he has had thus far and what he perceives to be some of the obstacles he will encounter in the future. “The answer for both is the same,” Armin replied. “It is the very conservative way spine surgeons think and behave. The terms Innovative, Revolutionary and First of its kind may sound good but in the real spine field it is very difficult to introduce new things. They will always ask for a five years follow up and would always prefer someone else help with that.”