Expert: Science for biotech strong, but business knowledge lacking

“The problem is, that what is missing in Israel is the linkage between the idea and the money,” Avri Havron says.

Avri Havron 370 (photo credit: Courtesy Weizmann Institute of Science)
Avri Havron 370
(photo credit: Courtesy Weizmann Institute of Science)
Though Israel has a knack for producing the kind of hard-nosed, innovative science needed to fuel pharmaceutical and biotechnological companies, its biggest challenge is a lack of business know-how.
That’s the view of Avri Havron, one of the pioneers of Israeli biotech (his company Prolor was acquired for nearly a half-billion dollars in April), who spoke to The Jerusalem Post ahead of his participation in the Weizmann Institute of Science’s first Chemistry Society meeting on Thursday, which is to gather its notable alumni.
“The problem is, in my opinion, that what is missing in Israel is – unlike the United states – the linkage between the idea and the money,” he said.
It’s not that Israel has not had its notable successes in the field. Teva has become the world’s leading generics manufacturer, and drugs that Havron himself helped develop, such as the multiple sclerosis drug Rebif, have become blockbusters (Rebif brings in over $1 billion in annual sales).
But the success stories have one common denominator: “They have a very solid science on one hand, and on the other hand they have people who knew how to put their hands on the money. They had access to financial resources and sell the story, sell the dream,” Havron said.
Another challenge is that even when smart, financial- minded people learn how to pitch biotechnology to investors, biotech start-ups tend to be riskier than, say, medical devices.
“Most funds are investing in devices, and that’s well-understood. They need to give reasonable returns in reasonable times. Obviously developing a device takes much less time than developing a drug. The success rates are higher and the time is less,” he said.
Havron should know; he served four years as vice president of Clal Biotech, Israel’s largest life-sciences investment group. From the financial side of the game, he said, he not only looked for good “stories” about what potential drugs could do, but also a solid argument that it was filling a new niche in the market, instead of trying to compete with a million other drugs out there.
“As an investor, you’ve heard the story and you say fine, great, the likelihood of success is 5 percent. But if you come in where a niche is very obvious and the ratio between signal to noise is high, something that is not every day in the headlines, the chances for success are higher.”
Instead of going for yet another autoimmune disease drug, aim for a less “sexy” field, the way companies like MediWound, with its treatments for third-degree burns, does, he said.