Why Is There Only One Teva?
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A MONTHLY REPORT COVERING NEWS AND INVESTMENT OPPORTUNITIES JOSEPH MORGENSTERN, PUBLISHER November 2004 Vol. XX Issue No.11 You are invited to visit us at our website: http://ishitech.co.il Why is there only One Teva? Why is there only one Teva with annual sales of more As a result of a management decision Teva obtained the than $4.0b? Why has Serono closed down InterPharm? rights to produce Copaxone from the Weizmann Institute. What role do Government support programs play in In due course copaxone became a blockbuster drug nurturing a multinational? whose annual sales are reaching $1.0b. Copaxone lengthens the period between multiple sclerosis attacks. Teva Pharmaceuticals was the result of the merger of three companies: Assia, Zori and Teva. The Not known widely is that 2/3 of Ares Serono’s, the Swiss development of this group reflected the rise of the Italian pharmaceutical giant annual sales are derived pharmaceutical industry in Israel. The first milestone was from Israeli laboratories. The company’s leading product a warehouse for drugs established in Jerusalem in 1901 is bulk recombinant human by Haim Solomon and Moshe Guttel Levin. interferon-beta-1a for the treatment of The initiative to establish a local pharmaceutical industry arose in the early 1930s. Nazi Germany was boycotted http://ishitech.co.il by the Jews in Palestine. As a result the main source of medical supplies was cut off. However, Jewish chemists Why is there only One Teva? began to arrive in Palestine from Germany and other Russia Places First Defense Order with Israel European countries. One consequence being that Radar Warns of Incoming Qassam Rockets expertise in pharmaceuticals rapidly accumulated. Business Week: Israel is Emerging from Financial Drought The pharmaceutical industry gained momentum when Ness Technologies closed Nasdaq pricing at $12-$14 Israeli First “Down Under” the Second World War broke out. Local manufacturing Israel Pushing for Venture Capital Fund with India was almost the only source for drugs within the countries Bear Stearns to Buy 50% of Migdal Capital in the region. Lip-reading on Mobile Phones Eli Lilly invests in startup Remon Medical Unlike Israeli companies like CheckPoint and Comverse UltraSPECT Enters U.S. Market that were formed to address global and international Churches in Mexico Silence Mobile Phones Siliquent Raises $21 million issues Teva Pharmaceuticals came about as a result of Giza, Accel, Formula Vision invest $19m in Transtech a critical need within the country. Dotomi Completes $10.5m. Financing CyOptics Raises $10 million The company was blessed with visionary management InSightec raising $21 million from Shareholders that foresaw the future emergence of the generic drug NICE Video Solution Secures Statue of Liberty industry. Since generics were exact copies of “name” Gteko raises $10m from Pitango, Intel Capital Stem cells as Heart "pacemakers" drugs their price was considerably lower. Major Israelis' Overseas investment Jumped to $737m. international pharmaceutical companies refused to DOCTORAL candidate Yaakov Benenson named one of the license their products to Teva. Teva got around the world’s top young innovators limitations by synthesizing these drugs in their own Israeli Technology Powers US Army Driving Simulator laboratories. Inadvertently this marked the onset of Israeli Yo-Yo Playing Robot generics. Israeli Scientists Awarded Nobel Chemistry Prize Copyright 2004: Israel High-Tech & Investment Report Subscription, bulk copy and reprint information available on request Editorial Offices: P.O.Box 33633, Tel- Aviv 61336, Israel Tel-: +972-3-5235279 Fax: +972-3-5227799 E-mail: [email protected] November 2004 Multiple Sclerosis (MS). Manufactured by InterPharm approved the transaction. Defense Systems’ Vice- and Serono, the product is marketed under the President of marketing, Idan Shimon confirmed the Rebif® commercial brand name. The second report. product came about from research dating from the 1960s by a young scientist named Aliza Eshkol, who Aeronautics Defense Systems, located near Tel-Aviv worked at the gland research laboratories at Israel’s will supply the company’s Aerostar UAV. The product Tel Hashomer Medical Center. The resulting product has also been sold to Angola, Ivory Coast and other Gonal-F, generates 26% of Serono's annual African countries. Aerostar is used to defend oil revenues. installations and other facilities. By a small stretch of the imagination, Serono’s recent Aeronautics Defense Systems recently achieved a decision to close down InterPharm in Israel and to milestone when it signed a joint-venture agreement transfer it to Italy, is understandable.. By moving for UAVs with the General Dynamics Corp. InterPharm to Serono, in due course, the Israeli origin (NYSE:GD). The agreement has already led to one and the drugs developed there will be erased. contract: the US Navy has bought several of However, that doesin no way detracta from the Aeronautics Defense Systems' products. The remarkable technological capabilities of Israel’s Aerostar is manufactured in the US, which Shimon biotechnology researchers. says enables the IDF to use US military aid to buy the system. Government support programs in today’s world are a must and should not be an issue for foreign In order to expand its share of the UAV market, companies seeking to gain a foothold in Israel. Aeronautics Defense Systems bought most of the The research and development commercialization shares of Italian UAV engine-maker Zanzottera companies, affiliated with this country’s major Technologies earlier this year. Zanzottera is now in universities, have available billions of dollars of know- the process of developing more powerful engines for how. They are unable to find enough licensees in Aeronautics Defense Systems larger UAVs, now Israel and would be more than happy to license their under development. patents to overseas groups. Perhaps in the final analysis as to why there is only Israel High-Tech & Investment Report one Teva, can be gleaned from the company’s Published monthly since January 1985 history. Its products were desperately needed by a Publisher and Editor in Chief Middle Eastern population that could not obtain drugs Joseph Morgenstern, B.A. Chem. from overseas. It is also likely that today’s Israeli entrepreneur does not dream of being an Eli Hurwitz, Technology Review Board but would be more likely to emulate the founders of Prof. S.J. Joel-Cohen, MD, FRCS. FRCOG (1996-2002) Mirabilis or ICQ who built businesses in a few years Prof. Hylton Miller, M.B. Ch.B. and rapidly cashed out in the hundreds of millions of Dr. Clive L. Carpel, M.B. Ch.B. dollars. Copy Chief Debbie Mor Russia Places First Defense Order Web Master Marty vonBokel with Israel Graphics Consultant Hebrew daily “Yediot Ahronot” reports that Russia Daniel Morgenstern has made its first defense purchase from Israel. Subscription Inquiries Tel-. +972-3-5235279 Fax. +972 3-5227799 Aeronautics Defense Systems has signed a contract E-mail: [email protected] with the Russian company Irkut, the manufacturer of Annual subscription $95.- per year, for 11 issues, the advanced fighter-bomber Sukhoi Su-30, for Israeli residents add 18% VAT unmanned aerial vehicles (UAV) valued at several Web Edition and Achives millions of dollars. Russia's Ministry of Civil Defense http://ishitech.co.il 2 November 2004 Radar Warns of Incoming Qassam “Why the renewed interest in Israel? First, for a small Rockets country, Israel has lots of start-ups. And start-ups, unlike Western tech giants, didn’t have the luxury of Residents in Jewish settlements in the Gaza strip will cutting back R&D to get through the downturn. So the soon begin to benefit from a novel technology that Israelis kept innovating, even as the global tech affords residents a 15 to 20 second warning of an industry swooned, and fighting surged between incoming Qassam rocket fired from Gaza. Israelis and Palestinians,” writes Business Week. The system, which is connected to a public address system, was used recently for the first time and ”Now there are lots of small survivors with leading- observers judged it to be successful. edge technology in areas such as Internet security, Known as Maamin, Hebrew for “I believe”, the system wireless broadband, and medical devices. No wonder fixes the position from which a rocket is fired and acquisition activity is up by some 25% over the past issues a warning. Using electro-optic sensors and year. Tech exports surged 20% in the first six months advanced computers, Maamin is capable of of 2004, to more than $6 billion, and the Tel-Tech 15 pinpointing both the location of the launch and the index is up 48% in the past twelve months. point where the missile will land, in a calculation lasting. less than a second. ”Israeli high-tech companies are also returning to Wall The missile division at Rafael Israel Armament Street, after a long hiatus. So far this year, three outfits Development Authority, developed the system and a Lipman Electronics Engineering (Nasdaq: LPMA; prototype was built in six weeks following an TASE: LPMA), which develops electronic payment emergency request. systems; PowerDsine (Nasdaq: PDSN), a maker of Maamin was developed according to specifications of integrated circuits for telecoms; and Syneron Medical the ground forces for locating snipers. Success in the (Nasdaq: ELOS) have joined the 70 plus local high- development stages led to an expansion of the tech outfits traded on Nasdaq,” Business Week points specifications to locating the launch sites of Qassam out. rockets. According to the IDF estimates, the average flight time ”There are at least a half-dozen initial public offerings, of a Qassam is about 30 seconds, which is long and a number of follow-on offerings ready to go to enough to seek cover, according to military sources. market by the end of the year,” Lehman Brothers The IDF expects to expand the capabilities of the managing director and head of Israeli business system to enable an immediate response against Leonard G.