Not all Jewish mothers want their children to be doctors. In the case of Nadav Kidron, his mother, Miriam, a biochemist and pharmacologist who has worked for 30 years on the problem of how to deliver insulin orally, invited him to become a pharmaceutical entrepreneur.
“Six years ago I was talking to my mother and she told me, ‘We finally had a breakthrough and our technology can help millions of diabetics out there in the world,’” Kidron says. “I told my mother, ‘Listen, it has a huge advantage to many patients but also has a huge financial upside.” So he immediately dropped everything and started Oramed, an Israel-based diabetes drug R&D firm, which has developed a platform that enables the delivery of insulin orally rather than by injection.
Oramed’s breakthrough could be a boon to diabetes patients, but like any company, it needs investment dollars. Kidron’s company will be one of 15 Israeli life science and medical device companies that will present their business plans to investors and strategic partners at Blank Rome’s eighth annual “Israel Strategic Partner and Venture Conference” on Thursday, September 22, from 1:15 to 8 p.m. at Bristol-Myers Squibb, 3553 Lawrenceville Road. Alfred Mann, chairman and chief executive officer of MannKind Corporation, will be the keynote speaker. Visit www.blankrome.com/IVC.
Working on a problem that others had failed to resolve, Oramed had to overcome two challenges to successfully carry the drug from the mouth into the bloodstream in the gut.
The first obstacle is degradation — enzymes in the mouth already start to degrade whatever we eat, and the process only continues as food makes its way through the digestive system. Oramed’s solution was to line the soft gel capsule with a coating sensitive to the level of acidic content that includes a substance that inhibits protease, an enzyme that breaks down food.
The second problem is the size of the insulin molecule, which is a peptide and too large to go through the intestinal wall. The solution here: change in acidity after the pill moves from stomach to intestines dissolves the coating on the pill. This releases an enhancer that enables the delivery of the goods — in this case the insulin, through the stomach wall into the portal vein, and from there into the liver.
Kidron suggests that Israel is particularly ripe with innovation. “Many people do not understand the extent that Israeli innovation affects everyone’s life — computers, cell phones, things we use on an everyday basis and don’t realize were initiated in Israel,” he says.
Kidron suggests that Israeli chutzpa, a mentality that presses some Israelis to reach for the impossible and eventually succeed, can come in handy in business. As an example of the Israeli approach to mission impossible, he mentions one of Oramed’s board members, Harold Jacob, a founder of Given Imaging, a company that developed a pill that contains a tiny camera.
“When they established the company and went to meet with a VC, he told them, ‘It is science fiction, and we don’t invest in science fiction,’” Kidron says. Today Given Imaging is successfully selling the product that the venture capitalist poo-pooed.
#b#A relatively stable environment#/b#. Kidron suggests that today Israel, despite its struggle with the Palestinians, is probably as stable as anywhere else in the world — given today’s widespread political and economic instability. When people visit, he is always amazed at the gap between people’s expectations and what they actually experience.
Because Israel is such a small country, it is easy for its industry to become isolated. But by including people fluent in American English on their boards Israeli companies can build staffs able to help them market effectively and get the best deals. Also, having Americans at the tops of their industries can affirm the value of a company’s technology or product.
After a long search Oramed convinced Michael Berelowitz, a senior vice president at Pfizer, to chair its scientific advisory board. “We wanted to have him at the front in the U.S., because there is no one better to represent us than someone with as high a profile as he has,” says Kidron.
Kidron, whose father was a civil engineer, earned a bachelor’s in law and an international MBA at Bar Ilan University. After working for almost three years as a real estate lawyer he managed a small not-for-profit associated with Bar Ilan.
Kidron says that he has always enjoyed discovering a need and establishing an initiative to satisfy it. For the singles community in Israel, for example, he organized a ski trip to Europe that has become a yearly event. In 2000 he was involved in trying to establish a successful Israeli online auction company in the United States. The group raised serious money, but the company didn’t make it. “Until the bubble burst, it looked very promising,” says Kidron.
When forming Oramed he approached top scientists and medical doctors. His hope was that these experts would provide guidance and give him confidence that the drug he had in mind was what the market was looking for. Although it was sometimes hard getting a first meeting, people were usually excited about his technology once they saw the early research results, he says.
Oramed took a similar approach with other professionals. “We realized from the beginning that everything we do has a huge potential,” he says. “Whether it is suppliers, accountants, lawyers, anybody we deal with, we aim very high. We may be small, but let’s think like a big company.”
Soon after Kidron established the company, Oramed got good results from pre-clinical trials in animals. Oramed has successfully completed phase II-B trials on its oral insulin capsule and plans early in 2012 to begin a phase II trial under the Food and Drug Administration on almost 300 diabetic patients.
Oramed does not plan to take its oral insulin all the way to market. “We feel that one of the international companies will do a better job than us in marketing the oral insulin,” he says.
With the help of Berelowitz, Oramed has already had a few discussions with potential partners in the belief that the best time to complete a deal will be after the next trial is complete.
The second product in the company’s pipeline is an oral version of an existing injectable diabetes drug that reduces the level of glucose and helps people lose weight because they lose their appetites. But Byetta, produced by Amylin in partnership with Lily, causes nausea and, therefore, turns about $800 million a year — comparatively small earnings for a diabetes drug.
Kidron believes an oral version should not produce nausea and thus have a higher sales potential. The company has completed pre-clinical trials and is starting phase I with healthy volunteers and diabetic patients.
As for the future, since the company’s product is more of a platform than a specific drug, it could go anywhere, for example, an oral flu vaccine.
Owned partially by the Hadassah-Hebrew University Medical Center, where Kidron’s mother has done her research, Oramed is a public company trading on NASDAQ that has managed to raise money thus far without using banks.
Investors in the United States, Israel, South Africa, and Russia have helped the company start phase II, says Kidron. Down the line it will have to raise additional funds to complete phase II.
The drive to surmount obstacles distinguishes Israelis from other westerners, Kidron says. “It sometimes has its minuses, and people may take it the wrong way. Or people may think we don’t have the right manners. But many times we see that Israelis, because of the strong drive they have, can go a long way in business.”