Between 2005 and 2012, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) was the dominant player in forging partnerships with Israeli healthcare startups, and some would even have said it was too dominant. Other pharmaceuticals companies were hardly to be seen in Israel, and their absence was due to Teva's pivotal position in the ecosystem. For its part, Teva explicitly described Israel as its competitive advantage in its innovative activity, which at the time was managed by Dr. Aaron Schwartz. The company, which discovered Copaxone, a drug developed at the Weizmann Institute of Science, "by mistake", hoped that it would be able to exploit its presence in Israel and its close ties with the young companies, the investors, and the academic institutions here to find more such projects. The object was to attain a portfolio of blockbuster drugs.
This program brought Parkinson's treatment Azilect to Teva, and led to investment in companies such as MediWound, Gamida Cell, Alcobra, PolyHeal, Bioline, Clal Biotech, and others - companies in different fields, but all of them Israeli.
When Dr. Jeremy Levin was appointed CEO of Teva in 2012, he put an end to the joint projects with most of these companies, as part of his plan for Teva's innovative division to focus on a small number of fields. Levin appointed Dr. Michael Hayden president of global research and development and chief science officer, and during his time there was investment in the local market, but no products from the Israeli market reached the company's development pipeline. Now, the situation looks set to change, Teva VP of biologics research and head of discovery David Wilson tells "Globes".
"Even after the cutbacks, Teva is not just a generics company; it also has an innovative aspect," Wilson says. "We know today that most new drugs come from academic research, and there are new ways of identifying drugs that have the potential to succeed, and new, successful ways of testing them. We therefore want some of our efforts to be directed towards very new drugs that have still not been clinically proven. We divide our efforts between established products and really new products."
Responsibility towards the industry in Israel
"Globes": Do you have a special regard for drugs developed in Israel, as when Dr. Aaron Schwartz ran the innovation side?
Wilson: "We look for drugs all over the world, but a year ago we decided to carry out an orderly search process in Israel, because we have a reputation in Israel and we have a certain responsibility towards the industry in Israel, as an Israeli company. Beyond that, there is similarity between the assets that the companies in Israel can provide and what we are looking for.
"At present, I am based in California, and I have not been in regular contact with the startup community and academic institutions in Israel, and so it was important for us to come and be active in Israel. From the moment that I arrived in Israel, I was impressed by the science. The density of the scientist population is very impressive. In six-seven institutions, there are so many good researchers."
The person permanently resident in Israel who is responsible for the task at Teva is Dana Bar-On, head of academic affairs and networks. Wilson visits Israel every few months, and most of his time here is devoted to meetings with academic researchers.
Teva's search for projects in Israel is understandable and interesting. Wilson says that the company used an artificial intelligence algorithm to search all the research literature and databases on the life sciences industry in Israel, "to make sure that we had seen everything and that we had all the projects catalogued." Thus 400 academic laboratories in Israel were mapped, and meetings were held with 70 of them. No business ties have yet been formed, but some projects are in the company's sights.
On what areas of the life sciences are you focusing at present?
"We are still focused on neurology, respiratory diseases, and cancer, and within the cancer field the emphasis is on immunology. In the innovation division we decided to focus the effort on biological drugs, although there is also good science in Israel in synthetic drugs. The rationale behind this is that Teva is not a very large company, and so specialization can help us. In the past, we had development capabilities in both fields, there were full teams in both of them, but in the across-the-board cuts carried out at the company, we had to relinquish one of them. Biological molecules are the fastest growing field. We also have development in biosimilars, and while that involves a somewhat different kind of development, there is a degree of synergy between the two teams."
Is the marketing of these products also the same?
"Marketing of generic drugs is usually very different from marketing of a new drug, because the one who first brings the drug to market usually educates the market. Generic drugs are more a question of price. At the same time, in biosimilars, we think that the situation will be different. The products are never exactly the same, which is why they're called biosimilars, and one of them will probably have to be marketed by itself. So, yes, there will also be some synergy in marketing."
Is Teva now capable of taking these products forward, given the amount of investment needed for an innovative product?
"Within our focus area, we're open to fairly large investments. We don't focus exclusively on bestsellers with very high development costs, but we also don't limit ourselves to very rare diseases. We're also open to fairly large trials, but not in areas like heart and diabetes, in which the investment in bringing drugs to market is huge."
How many agreements do you expect to have in the Israeli market?
"We think that we'll find about ten products that will enter our development pipeline simultaneously, all of them innovative and unique, and we'll continue with whatever succeeds. The goal is to bring two-to-four of the ten to advanced clinical trials. In an ideal situation, we'll spread the risk between different fields, but in practice, we'll select the best of the products that come to us, even if they're all in the same field."
"Looking for risky and interesting products"
Wilson says that Teva's cooperation with Israeli academic institutions is expressed through funding for research and providing grants, including as part of the Israel Innovation Authority's programs for cooperation between academia and industry. "Our purpose in devising the cooperation agreement is first of all for each party to understand exactly what the other is bringing to the table and what its expectations are, and then to select a goal that excites all of us and maintains the freedom of all of us," Wilson says.
Bar-On: "What is special about these cooperative efforts is that part of the work that is usually done by the research team will now be done by our team. We also offer a program for life science and medical students at the doctorate and post-doctorate stage, including mentoring and internship, and enable them to think about a career in drug development."
In the past, people from Teva very candidly admitted to us that the company's reputation among startups and academic institutions in Israel had deteriorated when projects were canceled after management changes. How do you assess the company's current reputation?
Wilson: "Very good. Academic institutions are striving to find projects to do with us, and the same is true of the university commercialization companies, which have very practical and positive attitudes towards cooperation. I admit that I was worried about the meeting, in view of what you said, but my impression is that there is no reason for such concern. Academic institutions like the idea of working with Israelis, but nevertheless prefer Teva to a startup, because startups are sometimes left without financing."
Bar-On: "Today, our handling of partnerships is very thorough; things don't fall into bureaucratic cracks."
Can you give examples of partnerships that you have already established?
Bar-On: "We're funding development of an immunotherapy drug for cancer with a researcher at the Weizmann Institute, and hope to bring several of his molecules to the trials stage. We've assembled a consortium of researchers around him: one with imaging capabilities, one with calculation biology capabilities, and one with the ability to evaluate the drug's effect on individual cells. Teva Netanya's development team will be responsible for working with him.
"In Tel Aviv, we gave three grants, and we're planning to give three more in spheres of immunotherapy and neurology."
During the term of Jeremy Levin as CEO and Dr. Michael Hayden as head of innovation and R&D, a special program was set up to support neurological research in Israel. What were the results?
Wilson: "The plan of action in 2013-2016 was a high-budgeted and extensive plan to fund 200 neurology projects. Almost every project in Israel got funding. The approach was to support this ecosystem in general, so that capabilities would later be developed here from which a profit could be made. They discovered talents through this project, but neither new projects nor new molecules were acquired through it. We're much more focused; our intention is to actually develop drugs. In addition, through our focus on biological drugs, the number of teams with whom we want to be connected to is very small."
What are you looking for in working with a team?
Wilson: "We're looking for risky and interesting products; ideas that are creative, but not unrealistic; and a team with an entrepreneurial way of thinking, but which is willing to work together, with mutual criticism."
Published by Globes, Israel business news - en.globes.co.il - on January 7, 2020
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