A Quick Start
Diagnostics, particularly monoclonal antibody-based test kits, represent one of Israel's first major commercial successes in biotechnology. While diagnostics are a significant part (about 30 percent) of U.S. biotechnology sales, they have been and remain a major thrust in Israel's health-related biotech products. And while diagnostics' share of the U.S. biotechnology market is predicted to drop to 17 percent over the next 10 years, its share of the Israeli market should remain about the same, unless something happens to open up the more lucrative therapeutics market (Chapter 21). Since it is far easier for Israeli companies to meet the U.S. and European standards for new diagnostics than for new pharmaceuticals, Israel's tremendous human resources in clinical medicine can be brought to bear in rushing new diagnostic tests from the lab, to the hospital ward, to the market.
Just how much faster is Israel? According to the National Committee for Biotechnology's Hamutal Meiri, Israeli diagnostics firms get biotechnology-related diagnostic kits to market in 3.0-5.3 years. The U.S. average is 8-11 years, and Israel's closest competitor (Singapore) takes 5.4-7.3 years. Just how much cheaper is Israel? The recent average cost for bringing a diagnostic product to market in Israel is $0.9-1.2 million. The U.S. average is $25-30 million, and Israel's closest competitors (Singapore and South Korea) require $6.0-8.3 million. Figures for Switzerland and Japan are about the same as in the U.S. (7-10 years and $21-37 million). Although one can quibble about the exact nature and comparability of products, the overall message is loud and clear. Israeli expertise in moving through all stages of R&D to market in record time (and at minimal budget) can be of major benefit to American strategic partners. Conversely, diagnostics are one area where ongoing relationships and partnerships would be far more natural than "never-see-them-again" licensing agreements.
A typical example of how Israel got its early start in this area is Savyon Diagnostics. It began with Ben-Gurion University Professor Israel Sarov, a well-known expert on chlamydia, who had previously shown that chlamydia were bacteria not viruses. Chlamydia ("clap") is a sexually-transmitted disease that affects 3,000,000 to 4,000,000 Americans a year, and can cause female infertility, ectopic pregnancy and many other ills. In 1993, 15,456 cases were reported in North Carolina alone. Since early antibiotic treatment can prevent permanent damage, early diagnosis is essential.
In 1983, Professor Sarov developed one of the world's first serological diagnostic tests for chlamydia, based on horseradish-peroxidase labeled antibodies. A new company, Savyon Diagnostics, was formed in 1984 to further develop and market the test. An ELISA test for chlamydia antibodies followed in 1989. Savyon's chlamydia test kits are now widely sold in Japan and Europe. Savyon has gone on to develop and market tests for many other infectious diseases. Their tests for urinary tract infections (URI), for example, take only two minutes to detect the bacteria, or to detect the white cells that signal infection even when bacteria counts are low. The U.S. National Ambulatory Medical Care Survey logged nearly 5.3 million cases of URI in 1992 alone.
Savyon's Scientific Product Manager, Dr. Ora Horovich, is particularly proud of the company's new Rapid SeroTest for HIV (the AIDS virus). It gives accurate results, equivalent to Western blot determinations, in only two minutes, without the need for special instrumentation. The easy-to-use, self-contained kit needs only a blood sample. Savyon is seeking WHO approval and a lucrative worldwide market, especially in Africa and Asia, where a simple, field-ready test is a must. The U.S. confronts over 100,000 full-blown cases of AIDS a year, and an estimated 16 million people (worldwide) now carry the HIV virus that causes the disease.
Many Savyon tests are developed in close collaboration with university-based research groups. For example, using Technion technology, Savyon has produced a new reverse-ELISA diagnostic kit for mycoplasmal pneumonia (MP). Over a million Americans contract pneumonia every year. In general, pneumonia symptoms can be caused by mycoplasma, bacteria or viruses, and the proper treatment depends on knowing the causative agent. Unfortunately, accurate diagnoses are usually slow in coming. The new Israeli test gives accurate results in hours, rather than days, as required by conventional tests. This will allow public health officials and physicians to begin proper treatment in time to stop an epidemic from spreading.
So much for past successes. What new opportunities are in the offing? MATIMOP's most recent catalog lists 25 current opportunities in "Diagnostics." Excluding several projects involving hardware (biomedical engineering), we are left with 20 opportunities in:
Of these, 14 are described as university R&D projects ripe for partnerships and commercialization. Some of these are described below.
Looking even further into the future, a survey of YISSUM (Hebrew University) opportunities reveals continuing strong interest and activity, with an accelerating trend from antibody-based to DNA/RNA-based tests and diagnostic markers. This reflects the further maturation of both techniques.
Progress on new biotechnologies is never smooth across all fields; it tends to be "lumpy," with occasional clusters of several related technologies and applications ripening at one place at one time. In Israel's case, it was first monoclonal antibody test kits for sexually transmitted diseases, recombinant interferons and hormones. Now, for example, five of YISSUM's seven projects in human biotech diagnostics involve cancer, an important and potentially profitable subspecialty. All five rest on genetic rather than antibody techniques, and three have already reached the patent stage.
Chronic myelogenous leukemia (CML) accounts for about a quarter of all cases of leukemia in the United States. According to the American Leukemia Society, approximately 5,000 Americans contract CML each year. Without heterologous bone-marrow transplantation (BMT) therapy before CML enters its acute stage, victims die of their disease. Since BMT can be quite risky, doctors and patients often delay therapy until it is too late. Hebrew University scientists have discovered a genetic alteration that signals an early stage ("accelerated phase") of the transformation of chronic CML to its fatal acute form. This has led to a test to signal when BMT is still effective, but must be performed without delay (Israeli patent filed).
Bladder cancer is the fifth most common cancer in the United States. About 50,000 Americans contract this potentially fatal disease each year. They are usually treated by the administration of Bacillus Calmette-Guerin (BCG), with or without surgery. Remission follows two-thirds of the time, but it is essential to identify the one-third of all patients who will fail to respond as soon as possible, so doctors can modify their treatment. Hebrew University investigators have already patented a diagnostic kit that quantifies the regulated-expression of the patient's genes for producing interleukin-2 (IL-2) and gamma-interferon (IFN-). Patients displaying inducible IL-2 and IFN- messenger-RNA production during the initial BCG treatment, as measured by this new clinical blood test, have a 97 percent likelihood of remission; those lacking such inducibility have a 58 percent likelihood of recurrence or tumor persistence. Such patients can now receive extended or alternative treatment before symptoms reappear. A new patent application has been filed and the protocols for a study of the clinical benefits of diagnostic-guided treatment have been approved by a local Institutional Review Board.
The same test, used in clinical trials on over 1,500 Israeli patients, has: (1) accurately predicted the clinical outcome in cases of acute lymphocytic leukemia and systemic lupus erthematosis (70 percent), (2) uncovered immune advantages to peritoneal dialysis over hemodialysis in chronic renal failure patients and (3) found specific gene-regulation abnormalities in Down Syndrome, AIDS and bone-marrow transplant patients. The investigators hope to expand their tests to include other immunomodulators such as tumor necrosis factors and , and IL-6. Another Hebrew University group is doing pre-patent research on a gene whose expression in cells, voided in the urine of such high-risk populations as certain chemical workers and smokers, could be used as an early screening test for bladder carcinoma, and provide a measure of likely invasivity and prognosis -- both important for appropriate treatment.
Still further from the market is the Israeli discovery that cholinesterase (CHE) genes are amplified (duplicated) 100 to 1,000 times in 60 percent of all the ovarian tumors, and 20 percent of the bone marrow tumors studied. Amplification of other common enzyme genes is associated with reduced response to anti-cancer treatments (e.g., methotrexate in leukemia patients). The finding could conceivably lead to screening tests and improved treatment protocols for some ovarian (and other) cancer patients.
Despite the existence of such "hot" areas as DNA/RNA-based cancer diagnostics, other areas and applications are far from neglected. Consider, for example, a new Israeli test for diabetes mellitus, a blood sugar balance disorder that afflicts more than 14 million Americans. The American Medical Association and American Diabetes Association now recommend tight control of blood glucose levels to reduce such long-term complications as kidney failure, vascular problems and blindness. In practice, this means that patients must draw their blood at home 5-10 times a day and check their serum glucose level with chemically-treated strips and glucometers. The readings -- which can vary widely on an hourly basis with exercise, eating, etc. -- must be followed for general trends over several days. The finding that the degree of glycosylation of serum proteins (the number of sugars bound to proteins in the blood) increases with blood sugar concentrations, has opened the possibility of a new test for glycemia. Since the glycosylation of serum albumin reflects the mean blood glucose level for the past 5-10 days, two tests -- not 35-70 -- a week would suffice.
Roche has recently marketed a fructosamine test for this purpose; but the test is reportedly low in specificity and sensitivity, and does not correlate with weekly averages of conventional blood glucose measurements in Israeli trials. Current laboratory methods are more accurate, but too technically demanding for routine use. Hebrew University investigators have developed a new accurate, simple immunoradiometric (IRA) assay method, which they have tested in both regular and gestationally-diabetic patients. These conditions result in five-fold and two-fold increases in IRA test scores, respectively. The correlation between average weekly (49 measurement) blood glucose levels and this new Israeli twice-a-week test was excellent (r=0.83 to 0.99). Further clinical trials are underway while the investigators seek to produce a bedside test kit for hospitals.
Polymyositis and dermatomyositis are painful, debilitating autoimmune inflammatory muscle diseases. It is difficult to distinguish these conditions from systemic lupus erythematosus (SLE), scleroderma and similar rheumatic autoimmune muscle problems. Existing antibody tests, based on anti-Jo-1 and Mi-2 antibodies, detect only 35 percent of all cases. The Hebrew University researchers have found a new antigen with much greater predictive power. Some 85 percent of the myositis patients tested had detectable antibodies to this antigen; in contrast, 94 percent of the SLE patients tested did not. The degree of reaction also seems to reflect disease activity, a finding that could have prognostic and/or therapeutic implications. The investigators are now developing a commercializable differential diagnostic kit for myositis, SLE and similar diseases.
Tel Aviv University (TAU) scientists and their colleagues at Ichilov and Ezrat Nashim Hospitals have developed a new test for the early detection of Alzheimer's Disease (AD), which destroys brain cells and causes premature senility and dementia. Almost half of all Americans age 85 and over have this incurable disease, which recently claimed former President Ronald Reagan as a victim. At present, AD can be diagnosed with certainty only after death, when autopsies reveal characteristic plaques and antibodies in the brain. Hypothesizing that the blood of AD patients might contain antibodies that attacked cholinergic neurons, an important type of brain cell, the investigators exposed the cholinergic neurons of electric eels (an easy-to-use model system) to blood from normal and AD patients. The tests indicated AD patients have significantly higher levels of nerve-cell-attacking antibodies. Rats induced to produce these same antibodies, showed many AD-like behavioral problems, including reduced short-term memory. How these antibodies could penetrate the blood-brain barrier to produce these effects is still unknown. RAMOT Ltd., TAU's commercialization unit, has licensed the technology to a major international concern interested in developing Alzheimer diagnostic kits and other applications.
Currently eleven Israeli firms specialize in health-related diagnostic tests (Appendix C). Three of these -- Savyon Diagnostics, Orgenics and Eldan Technology -- are already established companies with total annual sales in the $2-6 million range. All are small and good enough to offer significant opportunities, and several already have developed special relationships abroad. Six other Israeli biotech companies are new startups, who would be even more eager than established companies to form mutually beneficial partnerships.
Jerusalem-based Eldan Technologies was founded in 1987, and since 1990 has belonged to the Eisenberg Group. Its 30 scientists and technicians develop specialty products for biotechnology laboratories (coatings for in vitro mammalian cell tissue culture, biochemical separation products) and clinical diagnostic centers (tests for infectious diseases and serum apolipoprotein concentrations). Eldan's tests are FDA-approved and overall sales have been growing 35 percent a year.
Orgenics, founded in 1983, specializes in three separate families of diagnostic products. The first involves 22 (to date) patented easy-to-use, stand-alone, ELISA-based "ImmunoComb" diagnostic test kits for such diseases as: chlamydia (trachomatis and pneumoniae), hepatitis A and B, CMV, toxoplasmosis, rubella, H.pylori, HIV-1 and HIV-2 (AIDS). Their AIDS test kit, which is already being used by WHO, gives precise, sensitive results in 36 minutes. The kits' innovative design involves the transfer of a solid phase through solution. Both serum and less-invasive saliva tests are available. Orgenics will soon be marketing a confirmatory HIV test that will approach current Western Blot reference methods in sensitivity. They are also close to marketing computerized systems to scan, analyze and display ImmunoComb test results on a standard PC.
Orgenics' "Chemi-Probe" tests avoid the use of radiolabeling by attaching sulfone groups to the DNA. When recognized by a monoclonal antibody, the sulfonated-DNA can be visualized by generating color or light (which can be recorded photographically). This technology has been licensed (non-exclusively) to several leading U.S. biotechnology companies. Orgenics owns its first two DNA-based test kits, which involve pieces of DNA (probes) designed to bind to (hybridize with) papillomavirus DNA. One is an in-situ hybridization test suitable for pathologists; the other uses "Immuno-Comb"-type methods to yield an easy-to-use test for viral genes in routine swab samples, similar to those used in the common PAP smear test for cervical cancer. Most of the "Genecomb" products are still under development, but they should eventually be able to diagnose a variety of infectious diseases, genetic abnormalities and cancer markers.
Orgenics' third product line involves non-wipe strips for measuring blood glucose levels. A drop of blood is simply put on one side of the strip and the color read on the other. This is a particularly important consideration in the U.S., where laboratory technicians, nurses and other health professionals are highly sensitive to handling potentially AIDS-contaminated blood.
Orgenics products are available for licensing. According to the NCB, annual sales are about $6 million. Orgenics' President, Prof. Max Herzberg, is a distinguished Israeli biotechnologist and Chairman of Israel's National Steering Committee on Biotechnology.
Savyon Diagnostics' pioneering immunology-based chlamydia test has already been mentioned. It now markets three separate ELISA-based tests to detect chlamydia-induced IgA, IgG and true-IgM antibodies (among others) in blood samples. The company's other main line uses Immuno-peroxidase labeling (IPA) techniques to detect IgA, IgG and true-IgM antibodies against chlamydia and Epstein-Barr virus (which causes mononucleosis). Savyon also markets the basic technologies used in their own kits.
Healthcare Technologies Ltd. acquired both Savyon and Diatech Diagnostica in the early 1990's and has operationally merged both firms. In 1993, the firm acquired Massachusetts-based Diatech, Inc. Healthcare Technologies, while Israel-based, is traded over-the-counter in New York. The company recently moved from Beersheva to its own building in Ashdod, which includes up-to-date laboratories and offices. Savyon's annual sales are about $3.5 million, almost all exports.
Unlike other well-established Israeli biotechnology companies, such as Biotechnology General, Savyon is perennially, if modestly, profitable. Dr. Ora Horovich, Savyon's Scientific Product Manager, attributes this to Savyon's limited resources. "Savyon had to get products to the market to survive," she says. "This has led to a firm market orientation." Horovich does point, however, to several new research directions at Savyon, including work on a test for respiratory syncytial virus (RSV), molecular biology and biosensors (with Hebrew University). Savyon received a large three-year BIRD grant in 1988 to develop a herpes test and a mini-grant for research on a urine chlamydia test (with IRIS, California) in 1994.
Jerusalem-based Zer Science-Based Industries ($700,000 annual sales) specializes in diagnostic tests related to fertility/infertility. The company's "Single-Step" pregnancy test requires just drops of urine and gives accurate results within five minutes, even before the first missed menstrual period.
Otherwise-fertile women can develop antisperm antibodies following genital tract inflammation, and men can develop antisperm antibodies following blockages in the sperm-secreting system. Such attacks on sperm can account for about 5 percent of male infertility and 15 percent of female infertility. Zer has developed sensitive, specific ELISA tests for IgA, IgG and IgM antisperm antibodies to help fertility counselors and gynecologists advise and treat infertile couples. Zer also produces a particularly sensitive (0.01 millionths of a IU/ml) TSH test kit, the most sensitive available, for diagnosing and monitoring hyperthyroidism.
North Carolina Medical Diagnostics
Of North Carolina's 65 biotechnology companies, 16 have some interest in diagnostics, and 8 list significant involvement in the clinical area:
Of these, three deserve special mention.
With 50 employees, $3 million in sales, and a total dedication to immunoassays, EDITEK, founded in 1986, greatly resembles Israel's Savyon Diagnostics. In fact, it is currently developing a chlamydia test, a long-time Savyon specialty. It differs in a distinct emphasis on tests for drugs of abuse (e.g., cocaine, amphetamines, barbiturates, opiates) and other drugs. It also produces tests to detect mycotoxins (alfatoxin, ochratoxin, T2-toxin, etc.) in grain, and is developing veterinary tests for canine heartworm and feline leukemia. All three areas have been comparatively neglected in Israel.
Organon Teknika is a subsidiary of Netherlands-based Akzo, which has 60,000 employees and $2 billion in sales worldwide. Its 600-person North Carolina operation has an annual R&D budget of $14.4 million. Organon is using recombinant DNA techniques to develop products related to retroviruses, and develop immunology-based diagnostics.
Trinity Laboratories (only 3 employees and $200,000 in sales) has already marketed immunology-based diagnostics for mononucleosis (another Savyon interest), rheumatoid factor, staphylococcus and cryptococcus. Trinity is now developing diabetes predictors and connective tissue autoimmune diagnostics.