PayPal founder Peter Thiel, the first external investor in Facebook, and currently a partner in the Founders Fund venture capital fund, has made his first public investment in Israel's medical sector. Together with OrbiMed Advisors LLC, Thiel is leading a financing round for ChemomAb, in which OrbiMed previously invested. ChemomAb has developed drugs for treatment of inflammatory and fibrotic diseases (which feature scarring). Its first product is designed for the treatment of nonalcoholic steatohepatitis (NASH) liver disease. Japanese-Israeli investment fund of SBI and the Milestone Venture Partners fund also participated in the round.
The current investment is not Thiel's first in Israeli companies. Through the Founders Fund, he previously invested in Ori Allon's Compass Real Estate, which supported real estate decision making, and ICQ cofounder Yair Goldfinger's Appcard. The current investment is his first in the Israeli medical sector
Outside of Israel, Thiel has already been active in the medical sector for several years. He revealed his ideas about the sector in 2015, saying that it featured low probabilities for success in trials, and was therefore very risky. His goal is to invest in companies whose product is understood, with trials being carried out with enough precision to make their chances of success better than random and unknown.
Other medical sector sources believe that there are no real trials and companies as described by Thiel, and that randomness is part of the game. With this background, Thiel described himself in that 2015 story as a "contrary type" in biotechnology.
Thiel is making his current investment through a third concern, Thiel Capital, a fund-for-profit that has made three other biotechnology investments in A and B rounds.
OrbiMed senior managing director managing Dr. Nissim Darvish said today that he "believes that the effectiveness and innovation of the product, combined with the scientific ability of the professional team will enable it to realize the company's potential as ground-breaking company."
ChemomAb was founded by Dr. Adi Mor, who received a doctorate for her work in the activity of the immune system in cancer and autoimmune diseases The technology was invented in Prof. Jacob (Kobi) George's laboratory at the Tel Aviv Sourasky Medical Center (Ichilov Hospital).
"The company was founded in 2011, and I have been involved in it from the first day. I had no thoughts about founding a company; I'm more from the scientific side, but when I saw this technology, I felt that I had never seen anything like it before, and that the product had to be developed. It mustn't be wasted. I called Ichilov Hospital myself to obtain the main licensing agreement," Mor said.
Mor says that in its first years, the company was funded by private investors who were from outside the sector, but who had experience in medical investments. OrbiMed invested in the company later. "It was the first company that OrbiMed Israel invested in, when it was still in the pre-clinical stage, and they showed us how to operate in accordance with all the protocols and develop the product in an extremely high-quality and careful process. OrbiMed was responsible for our first connection with Thiel," Mor says. "We started our first trial several months ago, a safety trial with volunteers. We're waiting for the results, because with an innovative product, safety is no trivial matter."
"Globes": How does the product work?
Mor: "Prof. George discovered a protein that was unknown in the field of inflammatory and fibrotic diseases, but he slowly realized that this protein is expressed intensively and is involved in the progress of chronic inflammatory diseases.
"When we gave the drug to animals who suffered from arthritis originating in the activity of the immune system against joints, we saw that they got up and began running. Before that, they sat at the side of the cage and couldn't move. When we examined diseases featuring scarring and caused by liver inflammation, such as cirrhosis of the liver, we discovered that the drug was particularly effective in diseases that combine the inflammatory aspect with the scarring aspect."
Published by Globes [online], Israel Business News - www.globes-online.com - on December 4, 2017
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