Working Together:Natick's SBH Sciences Strengthens State's Link With Israel
When Gov. Deval Patrick traveled to Israel last year on a highly publicized trade mission, he was looking to find life sciences entrepreneurs like Tuvia Sofinzon.
A partner in a venture and private equity firm in the Middle Eastern nation, Sofinzon is heading a start-up company called Improdia, which is developing a blood test to gauge the health of the immune systems in patients who suffer from chronic inflammation.
Sofinzon met the governor on his trip to Israel, and now Improdia has been awarded a grant under a joint agreement between Israel and Massachusetts to collaborate with Natick-based SBH Sciences, a 15-employee contract research firm that also produces biologics for drug researchers.
Improdia has developed biomarkers that help identify chronic inflammation. That's a potentially big deal, considering existing inflammation tests on the market have trouble discerning between chronic inflammation and the less serious version, called acute inflammation.
A blood test that could routinely gauge immune system health would help doctors know if treatments on patients with cancer, diabetes and a range of other serious illnesses are working or not, Sofinzon said in a telephone interview from Israel.
It's a test that could have important implications for patients with diabetes and cancer, diseases often made worse by the presence of chronic inflammation.
A Ferrari With No Fuel
Improdia has an innovation, but it needs help. And that will come from SBH, whose CEO, Raphael Nir, is an Improdia investor. The two companies will receive a combined $386,000 from the Massachusetts and Israeli governments, which each company will use to hire employees to work on the project.
SBH will produce a special chemical compound, called reagent, for the blood kit Improdia is developing. But perhaps more importantly for the Israeli startup, SBH represents a foothold in the U.S. market, which Sofinzon said is vital for Israeli scientists.
That means knowledge of the life sciences and regulatory landscapes here, access to potential investors, and a large pool of patients that might qualify for future U.S. Food and Drug Administration trials. Improdia hopes to approach the FDA in two years.
"Everyone wants partners from Massachusetts," Sofinzon said. "Israel has a lot of start-up projects which are very brilliant, but without scale and without money, they will be in the garbage. A Ferrari with no fuel is a stone."
Pamela Norton, vice president for industry relations and programs at the quasi-public Massachusetts Life Sciences Center (MLSC), which issued the grant to SBH, echoed the notion that Massachusetts and Israeli life sciences companies need each other.
"They're very well known for innovation," Norton said of Israel. "We need innovation. We need more and varied ideas."
And the life sciences clusters of each are already intertwined.
There are nearly 100 companies in Massachusetts founded by Israelis or based on Israeli-licensed technology, according to state figures.
A Shared Past
It might not be apparent from the state's announcements about collaborations that have resulted out of the Massachusetts-Israel Innovation Partnership – under which $1.3 million was awarded this summer to four projects, including SBH's – that the companies involved are sometimes already closely intertwined.
Some companies that teamed up to apply for grant money represented new partnerships, Norton said.
Though SBH and Improdia have never performed R&D work together, Sofinzon and Nir are well acquainted.
Nir came to the United States from Israel 22 years ago after earning his doctorate in biotechnology from Tel-Aviv University. Both men are partners in Israel-based Goldman Hirsch Partners, which is backing Improdia and a number of other companies.
That sort of relationship helps clear some – but not all – of the dilemmas life sciences collaborations can often present, Nir said.
"It's not so simple to have two parties agree on responsibilities, on one hand," Nir said. "And second, how do you share the cake at the end? Even if you lose money, how do you share the cost?"
In the case of this collaboration, the lines are clearly drawn, he said. SBH will get the right to sell the reagent it's developing for Improdia.
And Improdia gets a lab partner who can help it realize its goal of commercializing its blood test, along with the profits that could eventually follow.
Because Nir is an investor in Improdia, both parties will make money if Improdia succeeds in bringing its product to market.
Nir describes the relationship as complicated. He said it doesn't clear up all the challenges that come with collaboration. Though he's an investor in Improdia and a friend of Sofinzon's, he must work out as good a deal as he can for his own company in the collaboration.
"I need to get a good return on my investment," Nir said.
Agreements Closely Vetted
As in many grant programs, the MLSC doesn't just hand out $184,000 to SBH grant right away. The same goes from Israel's office of the chief scientist, which is providing $202,000 to Improdia.
First, the two firms must draft a formal agreement on the scope and structure of the project. The agreement must then be approved by both the MLSC and the Israeli government. The two companies must also match their respective grants one to one.
"They have to spend their part first and then we match through reimbursement," Norton said.
The projects should take around one year to hit "important milestones," she added.
"If they demonstrate a milestone quickly, it adds gas to the fire and it'll burn brightly," she said.
Both Nir and Sofinzon said they were proud to have been selected by the MLSC's advisory panel, which is made up of high-profile names from higher education, venture capitalism and the medical field. The panel culled a field of six finalists to the four who received grants, Norton said.
Nir said he feels encouraged by the state's involvement in his industry.
"I believe if you can make life a bit easier, and if you have some grant money you can provide to projects here, you can see a big upside potential. I believe that is where the state can help," he said. "It was very nice to know other people believe in the project and your ability to deliver."
Sofinzon said he appreciates the support of both governments.
"It's very smart to collaborate," he said. "We believe it will be a very good match."
Norton acknowledges that providing funding to international collaborations is new territory for the center. Asked if she expects complications over responsibilities or profit-sharing, Norton admitted she's not sure.
"It's a pilot, first-time collaboration across oceans," she said. "We're hoping they will be motivated by the project and the budget." n
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