With the sale of Omrix Biopharmaceuticals Ltd. (Nasdaq:OMRI) now complete, its founder, president and CEO, Robert Taub can finally reveal the whole truth behind the company's name. "The original name was OMRI, which stands for Octopharma Medical Research Institute, since the company was formed as a spin-off from Octopharma, the Belgian company I owned," he says. "This is still the company's stock symbol and also the name of a sister company that I hold. And why did we add the x? It was simply the fashion among drug companies at that time."
Taub exercised a bit more rationale in his other business decisions, which culminated the other day in a small room inside the blood bank building at the Sheba Medical Center, Tel Hashomer, where he sat together with Dan Wildman, worldwide president of Johnson & Johnson Wound Management parent Ethicon Inc., and talked to visitors - analysts, investors and the press - about the deal he signed for the sale of Omrix to Johnson & Johnson (NYSE: JNJ) for $438 million.
"Look," he laughs, showing us his cell phone. "I've already got an offer: 'Interested in investing in a company developing an innovative respiratory system?" "They're going to inundate you," Wildman concurs. "They're not going to give you a moment's rest." But Taub, now 61, intends to do just that, in his own way. "I'm going to spend the next few months in Israel. I've signed up for Hebrew classes. Seriously! I'm not kidding."
Globes: What were the factors that resulted in the company being sold now, of all times?
Taub:"To bring the company back to the $40 level we were once traded at (compared with $25 in the sale, G.W.), we would have had to have survived for at least two very tough years. I believe we would have survived and even prospered, but given that the recovery will start in two years time at the earliest, it made more sense to give investors cash and let them exploit the interesting investment opportunities currently available on the market of today.
"I believe this is the best possible decision for investors in the short and medium-term. I believe that over the long-term, 10 years and upward, investors could have actually profited had we not sold Omrix. But investors on Wall Street don't look that far ahead."
Wildman:"At best, they look one quarter ahead."
Taub:"I believe I did the right thing, both for employees and customers. Johnson & Johnson has a fantastic ability to develop markets, for both our existing products and those now under development.
"Omrix will remain an independent legal entity under Ethicon, just as Biosense and Colbar remained independent after they were acquired by Johnson & Johnson. Omrix also has a research arm which is constantly looking for technologies to purchase from universities in Israel. It may well become a tool through which to carry out additional collaborations between Johnson & Johnson and Israeli companies."
Wildman adds, "The relationship with Taub began back in 1992, with Octopharma. Later, when it was already independent, we had talks on collaboration as early as 1999, but no agreement was signed. The issue came up again in 2003, and an agreement was finally signed in Europe, enabling the start of the joint development of the Fibrin sealant, and other innovative ventures. In 2005, Johnson & Johnson also assumed ownership of the distribution rights on the products in the US. We're a proactive company, and we always wondered whether it would be logical to acquire Omrix, but the official talks began in August 2008."
Were there any other companies interested in buying Omrix?
Taub:"There's nothing to be said. What's done is done." (Taub preferred not to elaborate, but Omrix is known to have also held talks with German drug giant Bayer, and a number of private groups. G.W.).
An axe to grind with Israeli venture capital?
Robert Taub is a Belgian Jew, who in recent years has divided his time between his homeland, Belgium, Israel, where Omrix operates, and the US where the company is traded and its marketing team is based. Taub's mother lives in Israel, and his children in Europe. "I founded Omrix in Israel, after I saw how many times you have to visit a company after starting it. I founded my previous company in Vienna, and I said, 'It would be much nicer to visit Israel every few months, rather than Vienna.' Besides which, my mother had just moved here."
Taub goes on to explain that another reason for choosing Israel was to benefit from the top quality manpower here. "In 1995, when I started the company, Israel had a reputation as a really hot spot in the biotechnology world. The managers I employed here did a fantastic job in ensuring the political and security crisis didn't affect us."
In operational terms, Omrix functioned as an Israeli company, which employed all its staff in Israel to begin with, and then split the activity between Israel and the US, but it is actually a subsidiary of a Belgian entity. Asked whether Omrix could be an example of an Israeli biomed company with the unique challenges that any such company faces Taub replies, "I don't know whether we could be considered a typical Israeli company, first because I'm not Israeli and second, because I put $20 million of my own money into the company, and I didn't let in any Israeli venture capital funds."
Why not?
"I said why in a previous interview and they didn't like it all that much, so I will avoid repeating it." (Taub said in that interview back in 1997 that "most of the Israeli funds I met were unprofessional." And when he was asked whether the company was still open to investment his answer was, "stand in line", G.W.).
So they came knocking and begged you to let them invest?
"To be honest? Not exactly. Incidentally, I want to differentiate between venture capital funds and private investment companies. The ones in Israel are very good."
And now - will you become an investor in Israel yourself?
"I have invested in a number of Israeli companies, including NeuroDerm and Glycominds, and I also own a business called Recoly, which has a contract with Bayer for the development of a new version of a hemophilia drug. It owns a laboratory in Israel now called Omri, which was formerly a spin-off from Omrix.
"I will be on the lookout for new investments, and I will also support my children's businesses. My daughter has an advertising agency and my son wants to start a new venture."
Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2008
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