I’ve traveled far and wide to get the scoop on international investing opportunities. Sometimes, though, the story comes to me. Last week I gathered with a cadre of Israeli biotech heavyweights just a few minutes from my Baltimore office.
The Johns Hopkins University is one of the premier medical research institutions in the entire world. Located throughout Baltimore, Maryland, its scientists are the top brains in their respective fields. So it’s only natural that the Hopkins (no, I’m not related to the institution’s namesake) medical campus downtown was chosen as the site for MarketReach America, a forum for budding Israeli biotech firms that aim to establish themselves in the Baltimore-DC life science corridor.
With research powerhouses like Johns Hopkins and heavily funded government facilities such as the National Institutes of Health (NIH), Maryland is a magnet for Big Pharma and doctors with incipient ideas that they intend to bring to market.
This spring, the Maryland state legislature passed a bill creating a Maryland Life Science Advisory Board, which will combine tax incentives and harmonization of private efforts with public sector programs to benefit the growing industry. The state’s current life science industry runs the gamut from defense against biological warfare all the way to candy-coated tongue depressors (a sweet idea I found out about during a lunchtime chat).
Nearly 400 bioscience companies call Maryland home, employing 60,000 workers when you take into account private, federal, and academic institutions.
So what makes this an international project? Well, when I attended the Israel Venture Association conference in Tel Aviv, Israel, this June, bioscience was hot on everyone’s lips as the next big thing to come out of Israel.
After already producing dozens of publicly-traded technology companies and some of the biggest information breakthroughs of the new century (instant messaging, Intel’s Pentium chip, online payments, and many more technologies were developed in Israel) the consensus at the IVA is that biotech will be Israel’s next big Nasdaq wave.
Israel has a prodigious number of listings on the world’s first major computer-based market, the Nasdaq. 1 out of every 10 listings on that exchange comes from outside the U.S., and Israel has more listings than any other foreign country with 68.
Bringing those companies to the United States, and to Maryland in particular, means greater exposure to big money and massive contracts that institutions like the Department of Health and Human Services can generate. It also becomes easier for new Israeli firms to join their countrymen on Nasdaq, as Wall Street is just a few hours’ drive away and the Securities and Exchange Commission is down the road in D.C.
The Maryland-Israel Development Center adds another dose of intrigue for entrepreneurs who want to crack the Nasdaq nut, and it was the MIDC that convened this year’s MarketReach America conference in Baltimore, bringing none other than John Jacobs, head of Nasdaq Global Markets (and a Baltimore native) to speak to us about Nasdaq’s international outlook.
Of course, in the middle of one of Wall Street’s bloodiest weeks in recent memory, Mr. Jacobs could expect to field plenty of questions from nervous entrepreneur-cum-investors.
“The good news is it’s a global economy,” Jacobs answered, cringing slightly. “The bad news,” he continued, “is it’s a global economy.”
You can consider exposure as risk, or as opportunity. Usually, international exposure is both. But so is any sort of investing. I asked John Jacobs the most essential question to my readers: “What is the advantage of being a global investor when the U.S. market seems to be doing so well?”
He responded that institutional investors, the big funds and banks that push the majority of a company’s share volume in a given day, prefer a “dual capital base,” meaning access to money in two countries through dual-listed stocks.
Call it the flamingo effect. Those exotic birds stand around on one leg, but when it comes time to take flight, the other one drops. You may not always need access to two sources of money, but it sure is handy when the you-know-what hits the fan.
Nasdaq, and western markets in general, are constantly involving ways for investors to make money no matter if the market seems to be ebbing or flowing. The bear run we saw last week came after short-sellers had gotten the snot knocked out of them for most of the year. But solid companies are bouncing back.
Nasdaq has over 400 products based on indices related to 25 countries. Of course, there is the Nasdaq Israel Index, which started last November with the goal of tracking one U.S.-listed companies from one of the world’s “most dynamic economies,” according to www.nasdaq.com.
Companies like Given Imaging, (NASDAQ:GIVN), which develops pill-sized cameras for acid-related esophageal conditions, are taking their place in the vanguard of Israel’s life science advance. The company’s shares have risen by over 45% this year.
Of course, Yokneam-based Given Imaging is a member of Nasdaq Global Markets, giving John Jacobs a smile even when the markets give him indigestion.
Regards,
Sam Hopkins
