Israeli company Smart Assays, which provides research services to medical companies, has signed a research and commercial cooperation agreement with UK-Italian company Aptuit, one of the leading European companies in preparing for clinical trials and carrying out the trials themselves. Aptuit is a subsidiary of drug discovery company Evotech, which acquired Aptuit several months ago for €300 million.
Under the agreement, Smart Assays will help Aptuit penetrate the Israeli market, while Aptuit's marketing apparatus will support the expansion of Smart Assays' activity in international markets.
Smart Assays founder and CEO Dr. Raphael Mayer said that strategic cooperation between the two companies would focus on developing innovative models for pre-clinical trials, among other things.
Mayer founded Smart Assays after nine years at QBI, which began in the related field of conducting comprehensive scans in order to associate RNA molecules with their biological activity. QBI, now called Quark Pharmaceuticals, became a drug development company, and Meiri left in order to found his own drug development company. "I had to make a living in the meanwhile, however, and I did it by providing drug development services. I saw that this sector was very suitable for me. Today, we're a company of eight people, and we provide services that not many company in the world are providing," Mayer explains. Based in Rehovot, the company has financed itself with its revenue from providing services.
Mayer says that most research services companies are huge companies that create strategic cooperation with large drug companies and develop all the elements for them in projects worked on by 150-200 employees in the service companies. Their services cost tens of millions, or even hundreds of million, of dollars.
"Some of the major drug companies now do only marketing, and employ no development personnel. The service companies even do the discovering, and are growing faster than the pharma companies," Mayer asserts.
A different kind of contract exists between smaller service companies and pharma startups and small pharma companies. Most of the small service companies specialize in drug development, and will offer only this element. What is different about Smart Assays is that it is a small service company, but offers a wide range of services. It is therefore suitable for the Israeli biotechnology industry, in which almost all of the companies are startups, and no project resembles any other.
One of the services is examining the viability of a project. "Say that a fund decides to invest in a project originating in higher education," Mayer says. "Before a company can be founded, recruit people, and even complete registration of its patents, it will lose a lot of time. Every lost patent year means losing a $1 billion in potential sales. That's also how big companies interested in investing or acquiring the young company look at it. It's worthwhile already when the company is being founded to begin giving us the project. It was found in the US that 80% of the projects from higher education fail to reproduce the results when they reach the commercial stage. I offer to examine the projects myself for the funds. I'm experienced in it, and I don't have the emotional involvement that a company founded around the project has. It's easier for me to tell the fund candidly about situations in which the results from higher education are not being reproduced."
Another service provided by Smart Assays is "research problem solving" services at the advanced research stages.
"As a startup, a company that has begun an advanced clinical trial can't afford to continue employing the initial R&D staff. But then the US Food and Drug Administration (FDA) asks a research question about how the mechanism operates, to show that it doesn't do the same damage that another product in the same category does, for example. We can give them just this test."
Mayer notes that sometimes the FDA demands that companies explain how their product works, and they cannot do this, but Smart Assays manages to solve the mechanism. In a case like this, it can publish a joint scientific article together with the customer company.
NIS 800 million is invested in biotechnology R&D each year, 25% of which comes through the Chief Scientist, and an absolute majority of which goes overseas, because the research services industry in Israel is not large. Israel has no large companies consuming these services.
"Development in this field began recently. Global service companies have begun to take an interest in doing business in Israel - in opening branches here or asking us for reciprocal referrals. Today, 25% of our revenue is already from overseas. We also have cooperation in development of joint research products (products that make the research possible). Now, we're embarking on a new path with Aptuit, and we'll see where it leads us," Mayer concludes.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 24, 2017
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