Hadasit Bio-Holdings

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HBL and BioMarCare get positive PR from top IBI analyst in Globes

Sep. 28, 2010

קישור לכתבה בעיברית

Earning from Early Detection of the Disease

By Elah Alkalay

The writer is Vice President of Business Development at IBI.

On an interesting investment by two local biomedical companies, Hadasit and Bioview, which specialize in diagnostics of the disease, and on a possible investment at ImmunoGen, which joined Genentech in developing a drug

4:02 pm, September 28, 2010

There are plenty of good reasons to invest in stocks, although history shows that investors don’t always gain from their shares.

Perhaps the first task at hand is to rank the business environment. It’s hard to rank another field in which growth and development are expected to be so strong – in developed countries because of the aging population, and in developing countries because of upward mobility. Therefore growth is just about the only possible scenario.

Another good reason to invest in the field stems from the principle of being representative of the company. It would seem you’d have to be a big expert to know how to correctly choose the company where a scientific or commercial breakthrough took place. But in practice, although a big monetary prize awaits the investor who chooses correctly, even those who don’t hit the mark can also expect to benefit from the response of the sector in the market. This factor leads investors to overly favor the optimistic scenario for all shares in a certain industry surrounding the anomalous success of a single share. This is happening in natural gas shares and it’s happening in biomedical shares.

Another reason to invest in the field is social responsibility. There are not a lot of fields in which every shekel you invest helps save lives or dramatically improves living conditions like biomedicine. Every shekel invested in Can-Fite, Biolite, BioLine, D-Pharm, Rosetta and others like them is invested in applied medical research that can save lives, not just bring returns.

To my mind, therefore, there is no doubt that the speculative element of the investment portfolio must include a certain investment in biomedicine.

Extensive Clinical Experiments on the Way

October, which will soon be upon us, has been designated Breast Cancer Awareness Month. Breast cancer is one of the most fascinating markets in terms of drug development history, especially regarding the breakthrough in the field of personalized medicine. For investors, the fact that this is a large market is more important than the history. Every year over a million new cases are diagnosed, and the monetary volume of the market for drugs to treat this type of cancer has been estimated at over $11 billion per year.

Moreover, it’s a growing market. The reasons for the growth of the market, besides the very disturbing fact that cancer has become more widespread, are that treatments have been found that effectively reduce the mortality rate and extended the duration of the treatment. The survival rate of women patients after five years has risen from under 70% 50 years ago to 90% today.

In 2007, 47% of breast cancer drug sales came from the US, 41% from Europe and 12% from Japan. In the coming years the rate of sales to the rest of the world is expected to rise, and in addition, during the next six years the new drugs, using innovative technology, will increase the rate of use in combination with chemotherapy and hormonal therapy. Today some 70% of cases are diagnosed in the early phases of the disease, a fact that dramatically improves the treatment’s chances of success.

Among the companies traded in Israel that operate in the field are two that specialize in diagnostics. The younger of the two is a subsidiary of Hadasit called BioMarCare Technologies.

Investment feasibility in companies active in the field:

Company Name

Market value

Average Recommendation

1- strong buy

5- strong sale

Average Target Price


Last Price (27/9/2010)


110.7M NIS

Not surveyed


0.1089 NIS


20.9M NIS

Not surveyed


0.170 NIS


386.63M USD


8.42 USD

5.69 USD


117.83B USD


37.3 USD

34.15 USD

AstraZeneca PLC (AZN)

75.87B USD


51 USD

52.69 USD

The company develops diagnostics tools to identify the biological signs that assist in earlier, more effective cancer detection. In cases of breast cancer and a certain type of colon cancer there is a greater presence of PARs on the surface of the malignant cells. Activating this specific receptor releases a protein that can be found in the blood of patients even in very early stages of the disease. A simple blood test can enable detection or raise suspicions of the development of one of these diseases.

According to the company’s business plan, it is scheduled to complete preliminary clinical trials for this specific indicator by the end of the year, and to begin in early 2011 extensive clinical experiments that meet US and European authorities’ standards. If the results of the more extensive experiments are positive as well, the company will be able to submit a product registration request as early as 2012, and according to the best possible scenario, to introduce a first product on the market by the end of 2013.

Precision, Speed and Efficiency

The other company, Bioview, a fascinating company from Ness Ziona, built on the know-how it accumulated in Israel in the field of optical checking systems (e.g. at Orbotech) for the development of automated scanning systems for a wide and growing range of lab tests.

One of the tests the company developed, and which has already been approved for sales, is a system that assists pathologists in determining whether the biopsy they received shows an increase in the Her-2 protein. The advantage of the Bioview check lies in the precision, speed and effectiveness of the check, compared to manual testing methods.

The importance of assessing the activity of the Her-2 receptor was a significant scientific breakthrough in personalized medicine, in the understanding that, although it appears all of the patients have the same disease, there are differences in the treatment that affects them. The discovery of the increased activity of Her-2 may not have been so important were it not for the fact that a biotech company called Genentech introduced the world to Herceptin, thereby dramatically improving the chances of recovery for 25% of breast cancer patients, who have greater activity of this specific receptor.

According to Deutsche Bank figures, Herceptin sales came to $4.8 billion in 2009, making it one of the world’s top-ten drugs in terms of sales. The recent development in the story is less pleasing: Genentech (owned by Roche) tried to approve, through a shortened procedure, the next generation of TDM-1, which is Herceptin linked with a toxin. Herceptin is an antibody very closely associated with Her-2.

In order to develop it, Genentech joined a company called ImmunoGen, which developed technology to link drugs with antibodies – enabling specific delivery of the drug to the target cells and a dramatic reduction in side effects in patients. At the end of 2009, Genentech and ImmunoGen completed an experiment on 110 breast cancer patients that showed dramatic improvement in their condition, compared to patients that received the standard treatment. Ran Nussbaum of Pontifax recently explained in a very interesting article why the FDA refused to approve the shortened procedure, instead requiring the companies to continue with third-stage clinical testing before applying for final approval to market the drug.

In conclusion: As can be seen in the accompanying table, investing in Hadasit, Bioview and apparently ImmunoGen as well looks interesting to us. Investing in larger pharmaceutical companies in the field, such as Roche or AstraZeneca, is of course more involved and dependent on sales, profitability and risks regarding the wider selection of existing products, and not just the selection of products under development.

The writer is Vice President of Business Development at IBI.


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