No demonstrations or sit-ins are being held as the demolishing of the old Biotechnology General Ltd. production plant is getting underway, despite the heavyheartedness of many in the drug industry. Biotechnology General, renamed Savient Pharmaceuticals Inc. (Nasdaq: SVNT), closed its Israeli operations, which were taken over by Switzerland's Ferring Pharmaceuticals AG.
Ferring opened a new factory and decided to return the old premises to its owners, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY).
Target-In founder and CEO Dr. Shai Yarkoni led an effort by a group of top biomedical executives to save the facility. He said, "It's not clear why the government and private investors couldn’t find the $2 million needed to keep the facility going.
Israel has few biotechnology production facilities, and none that a start-up that could rent instead of having to build one from scratch. Most Israeli biotechnology companies lease production services in Europe, which is a costly and complicated affair.
Yarkoni's group included former Ferring Israel VP R&D Avigdor Levanon and others. They wanted to operate the facility as a service for start-ups. Ferring was also due to hire services from the factory.
Yarkoni's group reached an agreement with Africa-Israel to buy the factory for $5 million. The group was to provide $2 million in equity and a $3 million bank loan. A number of companies had promised to transfer activity to the new venture.
It seems that this will not happen, unless something changes in the coming days. The factory will be demolished and Israel's biotechnology companies will continue to have to obtain their production services in Europe.
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2007
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