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Global pharma industry chooses Israel to help spark change, bring ingenuity

AstraZeneca, Merck, Pfizer and Teva partner in a consortium in Rehovot looking for Israeli ingenuity to reboot the industry.

By Abigail Klein Leichman, Israel21c

“If you’re a candle manufacturer and you want to revolutionize the global markets with a new product, if you ask your engineers to improve the design of the candle, they will never invent a light bulb,” says Dr. Christian Tidona, founder and CEO of BioMed X Institute in Heidelberg.

To spark true change, you must ask a bigger question – like, what if we could use the power of electricity to generate light? – and bring in the brightest researchers, academics and entrepreneurs to find answers.

BioMed X is the strategic partner in a one-of-a-kind consortium designed to spark true change in the pharma industry by helping AstraZeneca, Merck, Pfizer and Teva find answers to bigger questions… not in Germany but in Rehovot, Israel.

Founded in 2021 by the four multinationals along with Israel Biotech Fund and Amazon Web Services, AION Labs combines the expertise of big pharma with the ingenuity, agility and innovative instinct of Israel’s startup ecosystem to disrupt the drug industry.

Turning things upside down

“The way drugs are developed currently is a very lengthy, inefficient and expensive process,” said Tidona at the recent MIXiii Health-Tech.IL Conference in Jerusalem.

If you look at first-in-class drugs like Copaxone — which is a great success story for the Weizmann Institute, Teva and Israel in general — it took 30 years from the discovery of the concept to a drug that really will help patients,” Tidona said. “And the way innovation is done is still like we did it 20, 30, 40 years ago.”

Until now, most biotech innovation has come out of academia.

“Professors and scientists come up with a great idea and start building something they’re passionate about. And then five years and 10 million dollars down the road they find out there is no problem they can solve with this solution — at least not that somebody would pay for — and the whole thing fails,” said Tidona.

“So we turned this upside down, inviting bright minds to send in applications explaining how they could solve [challenges in pharma]. We identify the best of the best, move them physically to our location and put them in a boot camp. The winner then gets the opportunity to develop platforms that will serve the entire industry.”

Israel’s sweet spot

Tamara Mansfeld, senior director and team leader for digital innovation and alliances at Pfizer, said big pharma understands that “we have to imagine a different future” and the AION Labs alliance is a promising way to do that.

“If we’re all solving the critical problems that are impeding novel drug discovery, we can do it at a much greater scale than if we all do it separately.”

Pfizer, she noted, “recognized early on that the intersection between computational technologies and finance is a sweet spot in Israel” and has been collaborating with Israelis since 2015 in bringing artificial intelligence, natural language processing and computational biology to pharma.

“We knew that the stuff coming out of this space in Israel is truly unique,” Mansfeld said, noting that Israel brings “the spark of brilliance, which is something that we really needed.”

Pushing the innovation envelope at AION Labs, she said, will require looking beyond known questions.

“Can we challenge ourselves to identify bigger problems, more complicated problems, and can we challenge the ecosystem to bring back even more innovative solutions?”

The Airbnb of pharma?

By incubating a handful of curated startups in Rehovot – both Israeli and foreign – Tidona believes AION Labs will facilitate a completely different paradigm in the industry.

And he has a pretty radical idea of what that could look like.

“What is the world’s biggest retail store? Amazon. Amazon doesn’t own a lot of retail stores,” Tidona pointed out.

“What’s the world’s largest hotel? Airbnb. Airbnb doesn’t own a single hotel.

“What’s the world’s largest taxi company? Uber. Uber doesn’t own a single taxi,” Tidona continued.

“So maybe the biggest pharmaceutical company in 10 years from now doesn’t own a single pharmaceutical.”

AION Labs, under the leadership of CEO Mati Gill, can facilitate such a drastic change, said Tidona.

“We need to create a place where the best talents of the world want to be. And we move them here with their families to create a local density and diversity, a local ecosystem conducive to innovation, which means free flow of ideas, no silos, cross pollination, family-style collaboration,” he said.

“This is what we’ve built in Rehovot.”

‘We’re in this together’

Mansfeld agreed that successful collaborations are built on “a series of things that create a feeling of working towards a common goal.”

“The strength in Israel is the recognition by all partners that we’re all in this together.”

Tidona recalled that an AstraZeneca executive looked around at the diverse representatives of big pharma at AION Labs’ first challenge pitch day and remarked, “Gee, this feels like we’re almost in the same company.”

“When all the pharma companies get together, they really need to ‘drop their pants’ and tell their secrets to all the others — and then you get innovation,” said Tidona.

He acknowledged that some of the stakeholders from overseas “are a little reluctant to move their families to Israel. So we all need to work on showing people that this is a brilliant place to be creative and to raise a family.”