MNC Summit: Pharma Innovation in Israel – Strategies, Challenges, and Strengths

Tamara Mansfeld of Pfizer, Dr. Eran Harary of Teva, and Ezequiel Garfinkel of Merck KGaA are key figures driving the R&D strategies of their respective companies within Israel’s ecosystem. Each brings a unique approach to their investment in Israel, reflecting both the collaborative culture of Israel’s tech sector and the specific pharma innovation goals of their organizations.

Together, in conversation with Mati Gill, CEO of AION Labs, at our recent MNC Summit in Tel Aviv, they explored how this environment enables high-impact, risk-tolerant innovation essential for multinational companies seeking innovative solutions in pharmaceuticals, life sciences, and beyond. Their insights reflect Israel’s role as a global innovation powerhouse and a critical partner for multinationals aiming to stay at the forefront of technological advancement.

Key Insights:

• Incremental Investment for Lasting Impact: Pharma leaders emphasized the value of building relationships gradually within Israel’s innovation ecosystem, allowing them to scale R&D effectively while minimizing initial risk.
• Broad Access to Specialized Technological and R&D Expertise: Israel’s ecosystem provides access to advanced capabilities across increasingly critical fields like AI, oncology, and digital health, aligning with multinationals’ evolving needs in pharma innovation.
• Proven Resilience and Adaptability: Israel’s agile tech and biotech sectors has enabled uninterrupted progress in R&D, even through global challenges, reinforcing confidence in Israel as a reliable, strategic partner.
• Unique Culture of Collaborative Innovation: Israel’s collaborative environment allows MNCs to work alongside competitors on shared challenges, fostering high-risk, high-reward innovations that are difficult to achieve alone.

The Israeli Pharma Innovation Advantage

Israel’s thriving tech ecosystem is driving global innovation and tackling pressing challenges through what we call “Impatient Innovation.” The urgency-driven, resilient approach that defines Israel’s tech sector is often born out of the need to develop solutions swiftly amid limited resources and persistent challenges, fostering a culture of rapid problem-solving and risk-tolerant experimentation. Mati, who moderated the session, has seen firsthand how the local environment fosters breakthrough solutions in pharma and health tech:

“In an industry that touches global health outcomes, we’re not just building startups; we’re aiming to create breakthroughs. Over this past year, our partners have shown tremendous dedication, pushing forward with innovation in a way that proves resilience is part of Israel’s DNA.”

– Mati Gill, CEO @AION Labs

As a significant economic lever, Israeli tech contributes approximately 18% of the nation’s GDP, with more than 430 multinational R&D centers operating across fields such as AI, health tech, climate tech, and agrifood tech. Despite facing significant challenges, including workforce reductions and heightened uncertainty, Israeli tech continues to attract global attention and investment.

For global pharma leaders like Pfizer, Teva, and Merck KGaA, maintaining and expanding operations in Israel means tapping into one of the world’s most advanced health tech and life sciences sectors. Their investments go beyond accessing talent and cutting-edge R&D; they leverage Israel’s collaborative culture, which is defined by quick and efficient partnerships with local startups and institutions. Israel’s resilience and ability to sustain its innovation ecosystem have proven invaluable to these multinationals.

Making the Case for Investment in Israel

For global pharmaceutical companies, building a stronghold in Israel requires adapting to the country’s rapid innovation culture. For example, Pfizer’s incremental approach demonstrates how smaller, strategic collaborations with local startups create pathways for sustainable growth. Large-scale, top-down investments and expansive R&D centers had historically not yielded the expected results for Pfizer in Israel, as Tamara Mansfeld, VP Global AI and Data for Pfizer Oncology, explains. Recognizing this, the company has worked in a step-by-step engagement model, carefully building partnerships with startups over a decade and gradually increasing its engagement with Israel’s biotech landscape.

By building slowly and adapting as relationships developed, Pfizer was able to expand meaningfully, which made each new investment easier to advocate for internally as the results and success stories from each collaboration spoke for themselves:

“My approach is to start step by step, bringing smaller and then larger and larger and larger engagements and collaborations with Pfizer, and not just doing the scouting effort, but shepherding the interaction between the startup and Pfizer R&D to ensure we get to a fruitful collaboration.”

– Tamara Mansfeld, VP Global AI and Data @Pfizer Oncology

Teva, similarly, uses a strategy that incorporates Israeli R&D into its “pivot to growth” approach, which focuses on innovative medicines beyond generics. Israel’s dynamic ecosystem is central to this strategy, providing technologies that enhance operational efficiencies across Teva’s research, supply chain, and clinical development processes. As Eran Harary, Teva’s SVP of Clinical Development, shares:

“The strategy is about pivoting to growth through innovation, through innovative medicine, to not only generics. As you know, Teva is a global company now, and the growth will come from innovative medicines, and the understanding that Teva’s specific knowledge and intimate connections with researchers in Israel actually give us some advantages.”

– Eran Harary, SVP of Clinical Development @Teva

Unlike focusing solely on product pipelines, Teva’s partnerships span enabling technologies, like organoid research and supply chain innovations, which bolster both product development and manufacturing efficiency. Teva’s local collaborations are practical and broad reaching, allowing it to stay competitive globally while leveraging Israel’s latest advancements.

Merck KGaA, meanwhile, benefits from a 50-year legacy in Israel, leveraging long-term collaborations that have resulted in blockbuster products. With over 400 employees across six sites, Merck’s enduring presence is an extension of its global R&D objectives, spanning pharmaceuticals, life sciences, and electronics. Ezequiel Garfinkel, Head of Science & Technology (S&T) at Merck KGaA Israel, explains:

“For those who don’t know, Merck KGaA is not just a pharma leader; it’s actually a complement of pharmaceutical, life science, and electronics, and we’ve been here (in Israel) for more than 50 years. So, I would gently dare to say it’s easy. We are here. We have more than 400 employees here. We have six sites. We are doing a lot of things here in Israel for many, many years.”

– Ezequiel Garfinkel, Head of S&T @ Merck KGaA Israel

For Merck, Israel’s high-impact, high-reward R&D culture enables bold exploration and serves as a foundation for Merck’s multi-industry innovation strategy. By partnering with local talent, Merck benefits from Israel’s cross-disciplinary innovation, spanning everything from pharmaceuticals to electronics.

The Impact of the Past Year

The past year has tested the resilience of multinationals operating in Israel, challenging traditional business practices and in-person engagements. Merck, accustomed to frequent senior-level visits, had to adapt by prioritizing virtual interactions. While effective, virtual meetings couldn’t replace the tangible value of on-the-ground engagement. “It’s been challenging. Although virtual connections work, people want to see results in person,” Ezequiel reflects. By focusing on resilience, Merck kept projects moving forward, adjusting operations to maintain engagement and innovation:

“We are resilient—we’ve continued our work and remain committed to our goals, even if the mode of interaction has changed.”

Teva has faced similar challenges in maintaining a balance between resilience and deliverable-focused outcomes. Eran shares that while the initial reactions brought strong support for Israel, sustaining that focus means showcasing the value of Israeli innovation beyond crisis resilience: “There was an initial shock, followed by a lot of support for Israel and our Israeli colleagues.”

Pfizer’s experience highlights the decisions that leaders must make in managing global teams from Israel during uncertain times: each business trip now requires weighing health risks, costs, and the necessity of in-person engagement. This delicate balance of being present while recognizing the realities of working in a conflict-affected region is a constant challenge, demonstrating an ongoing commitment to maintaining operations in Israel, even in challenging circumstances.

Culture of Collaboration

Israel’s collaborative environment fosters partnerships among competitors, creating a unique setting for shared growth. Ezequiel describes the Israeli ecosystem as a “perfect setup” for tackling high-risk, high-reward projects that demand a partnership-based approach:

“We are all partners in AION, which is an amazing platform, very, very innovative. I don’t think you have a platform around the world where you have four MNCs, two VCs, Amazon, supported by the Israeli government, and underpinned by the Israeli innovation ecosystem, and trying to tackle problems that are relevant for all of us. This is almost a perfect storm for us to collaborate.”

Here, Israeli innovation bridges these multinationals, allowing them to address common challenges collectively. Pfizer finds this synergy especially valuable for high-impact R&D efforts in AI and advanced life sciences. While similar models could theoretically exist elsewhere, Israel’s collaborative culture and proximity of expertise make this possible.

The local network and world-class talent give Pfizer the flexibility to undertake projects that wouldn’t be feasible in a traditional, risk-averse environment. This space for bold exploration enables Pfizer to push the boundaries in fields like oncology, where it’s using Israeli partnerships to drive AI innovation in drug discovery.

“The fact that it hasn’t happened outside of Israel suggests we have something special here.”

Teva, too, has benefited from Israel’s collaborative spirit; the connections within Israel’s ecosystem make collaboration faster and more accessible, bringing operational efficiency to projects with high-stakes impact. This local synergy supports Teva’s broader goal of transforming its R&D through high-impact, cross-sector solutions, especially as it shifts focus from generics to innovation-driven health solutions.

The Future of Pharma Innovation

In an increasingly complex global landscape, Israel’s pharma tech sector continues to provide multinational companies with a uniquely resilient and innovation-driven environment. As pharma MNCs like Pfizer, Teva, and Merck KGaA deepen their investments and partnerships here, Israel’s role as a critical hub for groundbreaking R&D in life sciences and health tech is only set to grow.

This ecosystem, marked by its collaborative culture and a commitment to high-impact solutions, offers global companies an unparalleled advantage in advancing next-generation therapies, AI-driven drug discovery, and transformative medical technologies.

For global pharma MNCs, Israel is more than a strategic location—it is an engine for the future of health innovation.