At the beginning of 2023, Dr. Roni (Aharon) Gal, one of the best-known and longest-serving analysts in biopharmaceuticals, surprised the market when he announced his career change. Gall, who was working as a senior analyst at investment bank Sanford Bernstein, crossed the lines and joined pharmaceutical company Novartis as chief strategy and growth officer and a member of its executive committee.
This appointment was part of the strategy of Novartis CEO, Vasant Narasimhan, who announced at the time that he wanted to bring not the largest number of drugs to the market, but the most innovative drugs, with the greatest impact on the lives of patients.
This week, as part of this strategy, Novartis held a conference under the slogan “Ignite Your Curiosity,” in collaboration with venture capital firm aMoon and Startup Nation Central. For several years, the company has been holding such conferences, where it presents its vision and the areas and ways in which it seeks cooperation with Israeli biopharmaceutical companies and with academic institutions in Israel.
“I wanted to stir up Wall Street.”
In a conversation with Dr. Yaron Danieli, General Partner at aMoon, Gal pointed out the directions the company currently wants to focus on, but before that he talked about how he got to his current position. “The CEO, Narasimhan, was inviting me to lecture the company management about the state of the market, and at one point he said, ‘Come and work with us full-time.’”
Gal, who was born and raised in Israel, holds a PhD in biochemistry from the Massachusetts Institute of Technology. “I wanted to continue doing postdoctoral work at the Weizmann Institute, but then BCG Consulting came to do a presentation to our class at MIT, and I liked it. So I said, ‘I'll try it for a few years and I'll do it.’ Maybe I'll go back to academia.” 'He ended up spending seven years in the United States and Shanghai. “I realized that if I returned to Israel, I would probably limit my career to that place, and I wanted to experience the excitement of Wall Street.”
Gall was recruited by Sanford Bernstein and remained there for seventeen years. “Our feeling was that he had a crystal ball,” Daniele, who in the past served as CEO of Alcobra, a small pharmaceutical company, recounted in their conversation. “I came to him with the pitch I had made in advance of the show and he said, 'Forget it, it's not going to work.' “I invested five years of my life to discover that he was right.”
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For his part, Gal joked that 95% of Alcobra's startup products never made it to market, so his bet wasn't that risky, but Daniele was impressed.
“Innovation must come from outside”
When Narasimhan hired Jal, he emphasized that the goal was for Jal to continue to challenge the company's thinking. “I think the company can benefit from having an independent view on whether the assets we are advancing either internally or externally… We can then say ‘no’ to projects that won’t work, and have “The resources are available to really invest in those projects that we think will succeed.”
Today, Gal does more than just say what won't work. He manages business development, new product strategy and product portfolio strategy in development – around 400 medicines at various stages. He reports directly to the CEO.
“The unique feature of the drug field is that innovation has to come from outside as well,” Gal says. “Today, 30% of Novartis' products start outside the company, and CEO Narasimhan wants to raise that to 50%. A model whereby innovation moves from academia to venture capital funds, which know how to help create young companies then with careful guidance. With the baton being handed over to us when products or technologies are mature enough, it is a model that has undergone refinement bringing it closer to perfection, but it is not perfect for everyone.
It's an interesting model, considering the fact that a large percentage of startups fail financially or scientifically, but there is logic to it. Because the enormous risks involved in drug development are inevitable (and will be the case for the foreseeable future), it makes sense to share the risks among many players at different stages.
“When the patent expires, the drug has no value to the company.”
“The pace of innovation in pharmaceuticals and its impact on human life is astonishing,” Gal says. “In another twenty years, heart disease will no longer be the leading cause of death in the world. Cancer rates have already reached a kind of plateau. It seems that neuroscience is what interests us, as well as urology. It is difficult for older people to go to the toilet “
When Daniele says he's concerned about rising drug prices, Gall points the finger at the structure of the US health system and the patenting process.
“Unlike other industries, pharmaceutical companies are subject to a range of types of regulation, and their growth as a share of GDP is limited. What you see is a rise in the registration price of a drug for reasons primarily related to the structure of the company. The health system in the United States, but the real cost of drugs to the system Health is less.
“Our strongest argument is the loss of the patent. I still pay Microsoft every year for the operating system for my computer, but a drug whose patent has expired is worth practically nothing to the inventor. I work for a pharmaceutical company and I work for a pharmaceutical company.” I'm not poor; these companies are profitable, but it's not that we're abusing the system today, when I'm inside, I can say that with certainty.
Vision: Injection once a year for several diseases
Gal says Novartis now divides its drug development according to diseases and according to technologies. In terms of diseases, the company mainly deals with heart diseases, brain diseases, cancer and immunity. In technologies, Novartis focuses on classical chemistry, the development of antibodies, RNA-based products, cell therapy (using living cells as engines to produce drugs within the body), and focused radiation therapies.
“We're seeing an acceleration of innovation in neuroscience thanks to the use of RNA, because these drugs can get to the brain more easily,” Gall says. “In the past, I would talk to neurologists, and they would unfortunately laugh at the fact that their role was to ‘diagnose and say goodbye’, that is, to diagnose and prepare for the inevitable demise. Today, that is no longer the case.” They have something to offer even in the case of serious diseases such as amyotrophic lateral sclerosis.
He says the main challenge in heart disease is adherence to treatment. “We're on the market, looking at more treatments, that can be given by long-term injections, with the hope that we can go to the doctor once or twice a year and get a single injection treatment to lower cholesterol and blood pressure. And maybe weight.” Novartis has yet to launch products in the hot obesity category, but it has certainly put that on its agenda.
Even in such an imaginary future, millions of people will still suffer from heart disease, despite drug treatment. “From our point of view, this is a very attractive market, but the clinical trials required by regulators in these markets are large and long, and countries are conducting difficult negotiations on price, because they know that these drugs will be given to elderly people.” However, we see this category as an important source of growth, now and in the future, and we have between 30 and 40 molecules in development in this area.
In the field of cell therapy, Novartis was among the pioneers of CAR T therapies for leukemia, and today it is working to expand the treatment to other cancers and diseases. “At the same time, we very much want to improve the logistics of the treatment itself. Today, the management of the cells is very complex and there is risk to the patient. We want to achieve much better control over these cells, so that the treatment will be much easier, much faster, and much more accessible.”
Research and development center in Israel? Not soon
Novartis employs about 150 people whose mission is to create collaboration, Gall says. “We have scouts talking to the market all the time, and when they see a mature product, they present it to the head of the relevant field in the company,” he says of the working process. “After two- or three-week talks, if the response is positive, we form a team of about ten people, who conduct a short due diligence check. If it is successful, we examine the product in light of the company’s strategy.”
He says the connection with academia often starts with scientists at Novartis, who track science in their fields and point out researchers they think are doing interesting things.
Will Novartis consider establishing a development center in Israel? To this question from the audience, Gal answers: “This is a fair question. We have a presence in Israel that goes beyond marketing, for example numerous collaborations and clinical trials, but an R&D group will not be established here unless we have the impression that it is possible to do something here that does not “It can be done anywhere else, and we won't set up an R&D group here unless we see a differentiator here.”
Novartis and Globes collaborated to cover the conference in accordance with editorial standards and considerations that are important to Globes readers. The conference was held in collaboration with health technology and life sciences investment fund aMoon and Startup Nation Central.
Published by Globes, Israel Business News – en.globes.co.il – on May 23, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
