Pfizer Inc.’s (NYSE:PFE; LSE:PFZ) planned investment in Biomedix Incubator Ltd. (TASE:BMDX) subsidiary Meytav Technological Enterprises Innovation Center Ltd. raises a key question: why is Teva chairman Eli Hurvitz, an investor in Biomedix through the Pontifax fund, which he founded, bringing to Israel a competitor to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)?
Although the writing was on the wall that an international pharmaceutical company would acquire an incubator in the Galilee, of which there is only one possible candidate, the market never thought that Pfizer would enter into a partnership with Meytav. The reason is that Pontifax owns 20% of Biomedix, which owns 85% of Meytav. Will Hurvitz allow Pfizer reap the drugs developed by Meytav portfolio companies, which could otherwise enter Teva’s pipeline?
There are two possible answers. One is that Biomedix is an independent company that is divorced from Hurvitz’s personal interests. This is unlikely; even though Hurvitz is not involved in Biomedix on a day-to-day basis, he definitely lends his name and directs the company’s strategy. If he though it a bad idea for Pfizer to be involved in Meytav, it would not happen.
The second, more likely, answer, which has been confirmed by people who have spoken with Hurvitz recently, is that he thinks that Pfizer’s involvement is good news for Israel’s drug development industry in general. Teva will benefit from an increased reservoir of products under development, picking the ones it wants for its own use.
Published by Globes [online], Israel business news - www.globes.co.il - on October 31, 2007
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