Over the years, GE Healthcare launched many collaborations in Israel, especially with companies developing monitoring products.
By GALI WEINREBGE (General Electric) logo 58(photo credit: Courtesy)
GE Healthcare has three units responsible for seeking technologies outside the US: in Russia, Japan and Israel.Israel’s inclusion so high up in the list is no surprise because GE Healthcare is very active here. Following the acquisition of imaging systems developer Elscint Ltd. in the 1990s, GE Healthcare established a large development center in Haifa, which undertakes a large part of the company’s imaging activity.Over the years, GE Healthcare launched many collaborations in Israel, especially with companies developing monitoring products, such as Deepbreeze Ltd., WideMed Ltd. and InSightec Image Guided Treatment Ltd. , in which it owns a minority share. GE Healthcare also acquired Versamed Ltd. and Orbotech Medical Ltd.Oded Meirav is responsible for seeking technologies (not just medical) for GE in Israel and for developing the company’s relations with start-ups before and after their acquisition. He is the first to admit that cooperation with a company such as GE is not always like winning the lottery, as some start-ups seem to think.“Making a deal with GE is like a mouse dancing with an elephant: the mouse has to watch its feet,” he says.Meirav made the remark at a medical-devices conference hosted by law firms BFP & Co. and Fisher Weiler Jones.“GE, like a dancing elephant, doesn’t intentionally hurt companies,” Meirav says. “I haven’t yet encountered a deal that was designed to prevent a product from reaching market, nor have I seen attempts to steal intellectual property.The danger is from unintentional harm; for example, if GE, like any corporation, drags out a deal for a year. A company’s time is its most valuable resource, but a corporation has time.”That being the case, some companies that boasted about their distribution contracts with GE Healthcare in recent years did not subsequently show substantial sales. The contracts did not necessarily give them a springboard for raising large amounts of capital, even on the Tel Aviv Stock Exchange.“Deepbreeze and Widemed were really disappointed by the pace at which things developed,” Meirav told Globes. “We also thought that things would move more quickly.”
Globes: Did things drag out because of problems with the product? Meirav: “Not at all. I can tell you that, at least in the case of Widemed, we’re finally jump-starting the process.”If that is the case, it seems that these two companies acted wisely not to tie their fates with the corporation, but gave rights to one out of several products.Why is it nonetheless worthwhile to commit in a contract with a company like GE? “Because, ultimately, there is no choice. A start-up cannot set up a global marketing network, whereas GE can halve production costs and can finance the regulation.”Meirav is not only the contact person for companies seeking ties with GE, he can also prevent common mistakes.“It’s not good to contact GE every year,” he says.“You’re liable to be perceived as a nuisance. It’s a good idea to approach only after the development risk of the technology has been removed and just before sales begin.“It is also desirable to carefully learn about our areas of business, just by entering our website. Once in a million years, we’ll invest in a product that isn’t in our fields, but that’s really rare.”Meirav advises companies to carefully control their presentations more than ever.“The English should be perfect, without jokes, without political or sexist comments,” he says, “and there’s no need to mention that cardiology is a huge market. GE knows that.”BFP & Co. attorney Iris Pappo said early collaborations with corporations are usually perceived as preceding an exit but are actually liable to damage it.“New companies are liable to sign a distribution or cooperation agreement that renders the company’s acquisition superfluous,” she said.Pappo says two basic rules are: to ensure ways to withdraw if the agreement does not work out, and to continue to contribute to the corporation in a way that will make it difficult to get rid of you.For example, she says, it is important to limit exclusivity to certain products, territories or time frames.It is also necessary to retain control of the intellectual property portfolio and to be a partner as much as possible in processes related to product development.“If you’re a partner in development, you mess up the intellectual property for them,” Pappo says. “That’s a good thing, because if the corporation wants to dump you, it will have to buy your share of the rights, or even the entire company.”“A deal that now promises future royalties might appear excellent,” she says, “but it effectively sells the company or product without compensation for what you should receive.”
