Giving Israeli big pharma a booster

In 2009, sales of Copaxone, Teva's first branded drug, rose 25 per cent to $2.8bn (£1.84bn) and overall sales since 2002 have totalled $11bn (£7.2bn). The company recorded sales of $796m (£508bn) for the first quarter of 2010, up 28 per cent on the previous year. This helped Teva achieve first-quarter revenue for 2010 of $3.65bn (£2.4bn), up 16 per cent on 2009.

There has been a strong flow of new projects in Israel Dr Aharon Schwartz

Dr Schwartz notes that Copaxone has given Teva a major lift. He says: "In part boosted by the success of Copaxone, there has been a strong flow of new projects in Israel, and this comes at a time when the major pharmaceutical companies have a severe lack of new molecules in their pipelines."

Teva's second branded drug, Azilect, which is the first treatment to provide neurological protection for those with Parkinson's disease, is relatively new on the market and sales reached $243m (£160m) in 2009 compared with $175m (£115m) in 2008. Azilect was discovered by Professor Moussa Youdim and Professor John Finberg of the Technion's Rappaport Research Institute.

Dr Schwartz adds: "At Teva we have other drugs in the pipeline, led by Laquinimod. This is a new drug for the treatment of multiple sclerosis and has the advantage of being taken orally. Laquinimod has fast-track designation from the US Food and Drug Administration, and Teva is conducting two phase-III clinical trials for the drug. Laquinimod should be on the market by 2012."

Dr Schwartz is well placed to survey Israel's biotech potential beyond Teva's own production line. He is also chairman of drug developer BioLineRX, and sits on the board of directors of Clal Biotechnology Industries (CBI), both public companies in which Teva is a major investor. Among the promising projects in the CBI portfolio are MediWound's burns treatment, which has just successfully finished a phase III clinical trial; CureTech's cancer treatment, currently in phase IIb of a clinical trial; Andromeda Biotech's diabetes type I drug, in phase III of a clinical trial; and PolyHeal has achieved good results in the effectiveness trial for its treatment for chronic wounds. Meanwhile, BioLineRX's two leading products are both in clinical trials - BL 1020, for the treatment of schizophrenia; and BL 1040, for rebuilding heart tissue after a heart attack.

Elsewhere in Israel, D-Pharm - also a CBI portfolio company - is developing therapies for treating strokes.

Dr Schwartz, who joined Teva in 1975, points out that Copaxone and Azilect were not the only successfully commercialised drugs to be developed in Israel. There have been others such as Exelon for the treatment of Alzheimer's disease, which was developed by Professor Marta Weinstock Rosin of the Hebrew University and marketed by Novartis, with annual sales of over $800m (£528m); and Doxil, an anti-cancer medication developed by Professor Yechezkel Barenholz of the Hebrew University in collaboration with Prof Alberto Gabizon of Hadassah University Hospital, which is marketed by Johnson & Johnson and generates annual revenue of more than $400m (£264m). He says: "The problem is that because we did not have the know-how in the more distant past to commercialise these drugs, most of the profits were lost to the Israeli economy."

Even so, in some areas it is still preferable to develop a drug abroad. Protalix Biopharmaceuticals has successfully completed phase III trials on a Gaucher's disease treatment and sold commercialisation rights to Pfizer, while Proteologics has signed a deal with GSK to develop its promising cancer treatment. Dr Schwartz feels Israel's biotech achievements are built on two attributes. "We have an enormous concentration of know-how in our universities and hospitals, and a culture of entrepreneurship, enabling us to get new ideas off the ground."

Lack of capital is a major obstacle to drug development in Israel, and the government is helping to rectify this by establishing a $250m (£165m) biotech fund. "This is the right direction but it is too little, too late. In stem cell development, we are missing out on our competitive advantage because of miserly government support in the years when the Bush administration refused to support stem cell research for religious reasons." The significance of more successfully marketed branded drugs developed in Israel will help Teva in its quest to become one of the world's top-ten pharmaceutical companies. It will also be a shot in the arm for the Israeli economy, bearing in mind that in 2009 Copaxone sales alone were close to the $3bn (£1.9bn) that the country received in US military aid. Dr Schwartz has a PhD in Organic Chemistry from the Weizmann Institute of Science.