Which Israeli company has the most promising and advanced pipeline of orphan drugs? It could well be Neopharm, although you probably wouldn't have guessed it, because the company has maintained a complete media silence about this activity up to now.
Neopharm is known for marketing international companies' drugs in Israel, and in recent years it has also started to look towards overseas markets. Then the idea arose of developing innovative drugs independently, no trivial proposition given the huge risk at both the development and marketing stages of new drugs. But Neopharm is financially strong, is familiar with the processes of drug production and marketing, and knows the market's needs well. So it decided to try.
This side of its business is managed by Tal Fuhrer, VP business and corporate development, and one of the fourth generation of the family that has owned the company since it was founded in 1941. As often happens in long-established and successful family firms, Fuhrer has not always worked at Neopharm. He served his apprenticeship outside the family fold, in business development at Wyeth, before it was sold to Pfizer.
"Our innovative business focuses on developing orphan drugs - drugs for rare diseases," he explains. The company chose to start in this segment because the resources required for the development of each drug are comparatively low thanks to the relaxations that the regulatory authorities give to anyone prepared take on the development of a drug for a small market. The cost of marketing these drugs is also reasonable, since for each such disease there is only a small number of doctors.
"It's also for the soul," says Fuhrer, "From marketing orphan drugs we have seen that it's a matter of very severe diseases, death and great suffering. When you bring out a new drug for a disease like this, you make a dramatic difference to the patient's life. It can also be not bad from a business point of view, because for a life-changing drug, patients and insurance companies are prepared to pay more."
In 2008, Neopharm started setting up a subsidiary for orphan drug development. "We started it from nothing in Israel, with an Israeli and American staff. We searched in Israel and around the world for enzyme replacement technologies, that is, replacements for enzymes that exist in the bodies of most people but that certain people lack, usually for genetic reasons." Other Israeli companies in this field are Protalix Biotherapeutics Inc. (NYSE MKT:PLX; TASE: PLX) and Kamada Ltd. (TASE: KMDA).
The company found three products worth developing in academic institutions around the world (so far it has not succeeded in establishing collaboration with the technology transfer companies of the Israeli universities). One is for a disease called Homocystinuria, which leads to mental retardation and various physical syndromes because of which life expectancy with the disease is about 40 years. In this condition, an enzyme that breaks down a certain protein is lacking, and the current treatment is a special diet that does not include this protein. "They are in fact limited to a diet of a special protein drink all their lives, but even this diet does not bring about normal development, and in any case when they reach their teens they despair, and break the dietary restrictions despite the consequences." There is a drug on the market for this disease, but, according to Fuhrer, it is not good enough. Some 6,000 patients await normal lives, and the product is in clinical trials.
The second product is more complex. It is a technological platform based on taking blood from patients, enriching the red blood cells in the tissue and manipulating them in such a way that they start to produce the missing proteins. "The red blood corpuscles shield the foreign protein from the immune system in the patient's body, and so make possible a longer lifetime for the missing protein in the body," says Fuhrer.
The company has managed to reach demonstration of feasibility in the case of two diseases: MNGIE (mitochondrial neurogastrointestinal encephalopathy) which leads to involuntary weight loss, and shortens the life expectancy of sufferers to 30 years, and SCID (severe combined immunodeficiency), for which there is a treatment, but some patients have an immune reaction to it. "We managed to find twins suffering from SCID. One died, and one received our treatment and is still alive today," says Fuhrer, by way of demonstrating how significant and important such a treatment can be for patients.
In the US and Europe there are 200-300 patients diagnosed with MNGIE, and in Israel just 12. Nevertheless, experience in marketing orphan drugs shows that when patients' lives are extended and an alternative is offered, it's possible to generate business. "The platform will be suitable for other areas, potentially for quite a large number of diseases, not all of them even orphan diseases," says Fuhrer.
The products mentioned so far are in trials on animals, but Neopharm seeks to build a serious business, and so a few months ago it acquired Fresenius Biotech, a company that already has orphan drugs with annual sales of $50 million in 60 countries. Fresenius Biotech has production, marketing and sales set-ups. The merged company has been named Neo Vii, taking in the acquired business and the business set up from scratch in Israel, and is now managed by the American team, which has great experience in the field. "Neo Vii symbolizes the number seven, which stands for the 7,000 main orphan diseases," Fuhrer explains.
The leading product acquired in the Fresenius Biotech deal is an antibody-rich serum meant to weaken the immune system slightly. The product is sold for use in organ transplants and to treat GVHD (graft-versus-host disease), a lethal complication that can occur after a stem cell or bone marrow transplant. Initial trials have already proved successful, and they are expected to be complicated in the next few years, at a cost of tens of millions of dollars. "With this product line, we hope to break into the US market as well in 2016," says Fuhrer, "but of course it is first necessary to pass another phase III trial, and a trial like that might not succeed. You need a great deal of luck in this field."
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2013
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