"Large drug companies are stuck in a rut"
Sep. 19, 2011
Last week "Globes" revealed that Teva Pharmaceutical Industries Ltd's (Nasdaq: TEVA; TASE: TEVA) plans setting up a corporate venture capital fund that will invest in new drugs.
The fund, the size of which is not yet known, will be managed by Teva innovative ventures head Dr. Aharon Schwartz who has been responsible for finding early stage drugs for the pharmaceutical giant.
Schwartz has been working for Teva for 36 years and was involved in bringing multiple sclerosis treatment Copaxone to market, the company's first-ever branded drug.
Schwartz also serves as chairman of BiolineRX Ltd. (TASE:BLRX), which develops drugs under license from universities.
As part of his new role, he will be responsible for finding new innovative drugs for Teva. Meanwhile, he declines to discuss Teva's policy in this field but reveals his outlook regarding innovation at pharmaceutical companies.
Even though the global economy is currently shrouded in uncertainty, having a direct impact on the biotechnology industry, Schwartz is satisfied with the state of the industry in Israel. He said, There is never enough money but nevertheless, I do not know of a company with an advanced product that has not raised capital. The number of advanced clinical trials in Israel (Phase II and Phase III) is large."
He added, "To my knowledge, there are more than ten products in Phase III clinical trials, and I am not talking about new formulas or various degrees of imitations but rather pure new molecules. We don't have to worry about money but must have stamina and patience."
Are there in your opinion enough good products in the country?
Already 15-20 years ago they said that Israeli technology in academia and start ups can produce and that's what we have seen. The decades have gone by and I'm still surprised afresh all the time. Overall the situation is good, although there are those who say that Israeli universities and colleges have been hit, but I don't see it. Regarding Teva, I can only say that the company is committed to Israeli science, and it has no intention of reducing this commitment. If anything the opposite."
What do you think about innovation at the large pharmaceutical companies?
Regarding the large pharmaceutical companies that are not Teva, I can only say that they are continuing, to my disappointment, to be stuck in the same rut - to look for very advanced products, not take risks, and on the other hand to throw money on products that are close to market or have almost reached it."
It looks as if they tried to build investment ventures in advanced phase drugs but saw that this is not improving their situation?
"They talked a lot about investment in advanced stages but did not really allocate enough time and resources to the matter."
Schwartz was due to take part in the Jerusalem Economic Forum on Tuesday sponsored by the city's mayor Nir Barkat with the aim of promoting biomed activities in the capital.
He said, "Jerusalem as a center for biomed is very significant. The city certainly takes second place after the center in Rehovot, and is perhaps even a direct competitor with it. I believe that we will see the strengthening of the trend by which innovation in drug development is moving from the giant companies to start ups and academia. The great advantage of Jerusalem is that in a relatively small radius there are good universities and colleges and hospitals with an infrastructure for research by start ups.
How will you take advantage of this physical proximity?
"We are trying various models. At BiolineRX, for example, we have handed over the first stage of clinical development to a single team.
At Bio Light Israeli Life Sciences Investments Ltd. (TASE:BOLT), Israel Makov (Teva's former CEO) is trying to create information transfer between various companies. But models are not the real problem. The most important thing is handling bureaucracy. When I conducted the negotiations for buying technological rights from academia I found myself having to sign five different agreements. The procedures need to be simpler."
Jerusalem Development Authority director general Motti Hazan said that the city grants special incentives to biomed companies. He added that some 150 biomed companies were located in the city and that the sector is a top municipal priority.