Six years have passed since Jeremy Levin was unexpectedly fired as Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) CEO, at a time when the company was still being described as a generic drug giant, before its big downfall. When asked about what happened to the company since, he says that it did not have to happen. "Because of the way I left Teva, questions may have arisen among certain people, but over time, they are coming to understand what I tried to do in the company. I very much regret what happened to Teva; it didn't have to be that way. At the same time, many of those who left Teva and are in Israel can now build new and perhaps more important and substantial companies. I believe that a new biotechnological industry can grow from Teva's ashes."
Levin's sudden departure from Teva in 2013 was not as many thought at the time because of tensions with the majority of Israelis on the board and in senior management but rather disagreements with the then chairman Phillip Frost - a fellow American Jewish pharmaceutical executive. Levin's strategic plan for Teva was too modest for Frost's liking. Levin saw Teva growing from a strong, stable generic base with investment in innovative biopharmaceuticals, especially in the neurological sector, where the company had a relative advantage. We will never know whether Teva could have built a strong pipeline of branded neurological drugs, but what is certain is that Levin's plans did not involve taking on major debt. Levin has previously told "Globes" that the reasons for Teva's demise were, "The attack on Mylan, the acquisition of Activis (Levin was one of the first to criticise the purchase), the acquisition of Mexican company Rimsa, the failure to build a major innovative business, and the fifth component was a failure to improve generic operations."
Levin was one of the mediators in the appointment of Teva's current CEO Kare Schultz, who came from Danish company Lundbeck, where Levin served on the board at the time.
Today, Levin is CEO of Ovid, an interesting small biotech company. It is fairly clear, however, that he will not be satisfied with this. His appointment as head of Biotechnology Innovation Organization (BIO), an organization of 1,000 biotechnology and pharma companies in the US, on June 8, 2019 was no surprise in the industry.
"Israel can be an important research center for companies dealing in rare brain diseases"
Levin has had a hard time in the past year at Ovid, which is developing drugs for rare pediatric neurological genetic diseases. The company's share plunged following the market's interpretation of the trial results for its leading product published in August 2019. The company itself asserts that the trials results were good, and the FDA, in contrast to the market, viewed the results as positive enough to allow the company to go on to Phase III clinical trials. Levin says that the American Academy of Neurology (AAN) contended that this trial was one of the most groundbreaking trials in neurology in 2018.
Ovid's share began to recovery only recently, when the company actually began a Phase III clinical trial. It traded last week at a $121 million market cap, but this fell to $92 million after the company held a $32 million public offering this week.
The product in question is designed for treatment of Angelman syndrome (AS), a neurological genetic disease with symptoms similar to autism. 800 children in Israel and 24,000 in the US suffer from AS. Recruiting patients for a trial of a treatment for a rare disease is usually a great challenge. Since the product is an orphan drug (designed for use by up to 200,000 patients in the US), only 60 patients are needed for the trial, but Levin says that 100 have already registered for it. The results are slated for publication in mid-2020.
Ovid last week published the results of another trial in the adult epilepsy sector. The trial showed that following use of the product, epilepsy attacks were reduced by 90%.
One of the company's important trials is in Israel at Sheba Medical Center. "We're about to try all of our products in Israel," Levin says. "In addition to patriotism, I was very enthusiastic about the medical centers, because they are at a very high level. In my opinion, Israel can be an important research center for all companies dealing in rare brain diseases. It can be a global center for research and development of drugs for rare neurological diseases. I would be glad to cooperate with the Israeli government in this sphere.
"I was greatly influenced by the vision of the late Shimon Peres, who wanted to make Israel a brain research center. I was also greatly influenced by his impressive act in uniting all of the main brain research centers into a single unit and raising financial support for the academic institutions doing this research."
In recent years, Levin has united leaders of biotech and pharma companies a number of times in protests of a political nature. He induced industry executives to sign a letter against a measure by US President Trump aimed at preventing tourists from some Muslim countries from visiting the US. Another campaign involved permission that Trump gave health insurers not to pay for abortions. Levin called it "an attack on women through an attempt to control important matters affecting their health and freedom." The words used by Levin to explain his act to the health industry leaders make it clear that he is aiming at a leadership position in this sector. "We are inclined to keep silent out of concern that the president will take revenge by instituting price controls for drugs or tax regulations that will not benefit the field," he said, "but what is the price of this silence to the industry's soul? At what stage does the desire to be part of what is happening become a desire to appease the ruler? How will we move this country forward? Only if we stand up and insist, 'We have something to say.'"
Political involvement is nothing new to Levin. His father was a journalist and political activist in South Africa. The family moved to Rhodesia (Zimbabwe) following the 1960 Sharpeville massacre, but left when his father was given one day to leave the country. Levin was 11. His mother sent him to Israel, and the whole family was eventually reunited in the UK. These events shaped Levin's political consciousness, although he has largely abandoned Trump as a target in the past two years in favor of his efforts to unite medical companies.
"A serious image problem"
"There are three leading topics on BIO's agenda," Levin says. "We have a serious image problem. The public thinks that we, the large pharma companies, are only interested in making money by continually raising prices of existing products. Unfortunately, there were several companies that behaved this way during the opioids crisis. But we really believe that biotechnology companies don't work that way. They focus on patients on the one hand and innovation on the other. Their goal is to help patients. Unfortunately, we've quickly lost this image, while the unflattering stereotypes have gained force.
"The second problem of all the pharma and biotechnology companies is political. Anyone looking for a quick political gain declares that he will lower drug prices. They try to introduce new bills without thinking about it deeply. This has a direct effect on investments in biotechnology. There is a positive outbreak of innovation in the US in areas like genetics and cell healing. These are new and innovative fields. Without investment in them, this innovation momentum will come to a halt. Furthermore, we have to be sure that these innovative drugs reach everyone who needs them, but lowering prices for all products is not necessarily the way to do this. The companies have to receive a fair price for the new drugs. This difficulty isn't understood enough by the public, and isn't part of the public debate on the issue of drug prices.
"The third issue on the agenda is the specific handling of addiction to opioids, which has reached disastrous proportions in the US. We have to do everything in our power to offer patients better alternatives to opioids, because people are dying every day. Over 70,000 people died last year alone. The government has to fund non-opioid products and help these alternative products make quick progress on the regulatory track."
"A CBD shampoo additive? Are you serious?"
To no one's surprise, US, Canadian, and of course Israeli cannabis companies have made Levin offers to join them, but he has no interest in it. "Oh, no, cannabis is not a solution at all. First of all, we are interested in non-addictive drugs. Didn't we make this mistake once already? I'm not sure that there are enough data in our world today to say with assurance that cannabis is non-addictive, or that it isn't a road leading to other drugs. All of this is enough to make me worried.
"I'm very concerned, because I believe that we're investing now in a field that we don't know enough about. We're hurrying to make use of a product that hasn't been researched enough, and we haven't yet established its effectiveness and value as a medication, and certainly not for all of the diseases that certain doctors are purporting to cure with it. Companies like GW Pharmaceutical, which has registered a specific cannabis dosage and compound as a drug for a certain disease (epilepsy) with the US Food and Drug Administration (FDA), and has gone through the entire development process for cannabis as a medication have contributed a great deal to the drug market. At the same time, the product's operative mechanism is not yet sufficiently understood."
Levin believes that "Cannabis does do something," but it is certainly not a cure-all for every problem. It is composed of diverse active ingredients appearing in different dosages in products called "cannabis," but it is not clear at this stage what each ingredient does, just as it is unclear how they fit together. "I see too much marketing activity and too little research activity. A Cannabidiol (CBD) additive for shampoo? Are you serious?"
"Globes:" What about the pain sector specifically?
Levin: "There are ingredients in cannabis that definitely contribute to pain relief, but if we don't treat the development of these products as medications, we're liable to find ourselves with a collection of shelf products having no difference between them in effectiveness or quality, and the potential of these ingredients will never really be discovered. Meanwhile, GW can't manage to charge a high price for the research it conducted. People prefer buying other products that are cheaper. This gives the market a signal that doing research isn't worthwhile. Companies will prefer investing in trials only if these products have their own special market, but that won't happen if we don't understand the operative mechanism of the various ingredients."
"Opioids were effective at first"
If not cannabis, then what? Levin says, "In 3-4 more years, we'll have new pain relievers in the pipeline with innovative mechanisms that have been proved through research. If we put effort into promoting these drugs, we can gradually replace the opioids, or to put it more accurately, we can leave the opioids in those places where they do no damage."
Why haven't these pain-relieving drugs been developed up until now?
"The opioids were effective. It can't be denied that they were initially effective in relieving pain, but then comes the stage of getting accustomed to them, and it is sometimes accompanied by a stronger pain response, so many years were needed to discover this. Several large drug companies made money out of this sector, so they had no interest in changing anything. On the other hand, venture capital funds examined this market, realized that it was dominated by the opioids, and concluded that the market was saturated, and there was no need for new companies that would try to find a new type of pain-relieving drug, since the existing market met the needs. The insurance companies did not push for another solution, because as far as they were concerned, a patient suffering pain doesn't necessarily cost more. For these reasons, only 2% of the pain-relieving drugs in recent years were approved, and many drugs were never submitted for FDA approval."
What is the BIO organization doing to combat the opioid plague?
"We set up a work group composed of leading CEOs in the biotechnology industry, which brainstormed the problem, looked for the best ideas, and formulated clear policy proposals for submission to Congress. Many of these policy proposals have already been adopted and become bills. The policy and bills focused on three clear spheres. One is a bigger budget for promoting and investing more in research that will increase understanding of the body's pain mechanism and addiction mechanism. The second is giving patients the right to receive the type of drugs suitable for them. In order to achieve this, budgetary barriers and improper initiatives, such as encouraging patients to use opioids instead of more up-to-date drugs, even though the latter may be more expensive, should be removed. The third is helping the FDA to develop regulations that will expedite and promote development of new pain-relieving drugs more quickly. We are already now seeing the effect of these three initiatives on the administration, but there is still a long way to go."
Honestly, as someone who was a doctor and later a drug industry executive, did you know that opioids were addictive?
"Every doctor and every drug marketer knew that opioids were potentially addictive, but none of them realized the dimensions of the damage, as opposed to the limited utility. When the patient is screaming in pain, the doctor has a great emotional interest in trying to supply the need."
Published by Globes, Israel business news - en.globes.co.il - on October 8, 2019
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