A group of senior executives from Israel's biomedical industry, headed by Target-In CEO Shai Yarkoni, is leading an initiative to acquire the old plant owned by BTG - Biotechnology General, whose activities in Israel were recently acquired by Swiss company Ferring Holding SA.
Ferring has opened a new factory and it therefore intends to return the property to its owners, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) on December 31, 2007. Industry sources have expressed their disquiet at the prospect that a plant of such importance to the biomed industry could be either closed down or sold to a foreign entity instead of being acquired by an entity that could lease out its services to Israeli biotech companies that cannot afford to set up facilities of their own (as is the case with most companies in Israel). At present, companies like these have to purchase such services overseas, an outgoing that makes their work more costly and complicated.
The initiative is jointly led by Yarkony; Avigdor Levanon, formerly deputy VP R&D at BTG, who will be appointed plant manager; Anat Bernstein, who specializes in brokering agreements between Israeli and Indian companies, and will also bring in a few Indian customers; and Efi Cohen-Arazi, former VP at Amgen Inc. (Nasdaq: AMGN) and other global companies.
"A lot of parties wanted to acquire the BTG plant but Ferring wasn't interested," says Yarkoni. "We're not a rival group to Ferring, and we have also undertaken not to compete with it. At the same time, Ferring has realized that it needs a plant like this as a working operation, since the new plant will not provide all its needs. It was decided, therefore, that Ferring will be the first customer to purchase services from us, and it has also undertaken to assume responsibility for the plant's quality control. Any production capacity that Ferring does not use can be offered to other companies. We've already received offers from three more companies which are interested in purchasing thousands of dollars worth of services from the plant.
"The plant will meet a critical need in the biotech industry - the development of proteins from the university research stage to clinical trials on humans. Most of the plant's current employees will stay on after it changes hands. We expect absolute continuity, meaning that the plant will maintain uninterrupted production, starting immediately on January 1, 2008."
The group is currently raising $5 million, the amount needed to purchase the plant equipment from Ferring, and to sign a 10-year mutually binding lease with Africa-Israel. "The price is negligible, compared with the cost of setting up a plant like this, which can run into tens of millions of dollars," says Yarkoni. "We already have a number of interested investors. As I see it, the key advantage for an investor in this project is the exposure to all the biotechnology ventures in Israel, all of which will pass through this plant at some point."
Published by Globes [online], Israel business news - www.globes.co.il - on June 4, 2007
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