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Bio-IT Shines Bright in Israel - Companies such as Quark and Pharmos are still flourishing as other industries decline in this country torn by conflict.  

By Hillel Alpert

Dec. 10, 2002 | Riding the cool, comfortable, double-decker commuter rail from Tel Aviv, it is almost possible to forget momentarily the backdrop of death and violence that afflicts Israel. The train is following the trail of a sizable explosion — not the bombs that were detonated twice on this rail in recent months, but rather the blast of post-genomic information that portends new and improved medicines.

Israel's traditional stronghold in both IT and the life sciences makes it fertile territory for the 20 or so new enterprises that seek to capitalize on the convergence of these two industries. These bio-IT companies constitute about one-fifth of Israel's biotechnology startup industry, which has assumed more importance as other industries, notably tourism and construction, have suffered during the recent conflict and turmoil. These startup companies remain viable today due primarily to the infusion of funding shortly before the decline of the stock markets and high-tech industries, says Bernard Dichek, founder of BioIsrael Communications Ltd.

Quark Biotech Inc. is one of a select number of Israeli firms producing new technological platforms for drug development. It is nestled among many other large and small corporations between two scientific industrial parks that straddle the cities of Ness Ziona and Rehovot, about 13 miles along the Coastal Plain area south of Tel Aviv.

The company is perhaps best known for its principal investor, Larry Ellison, Oracle Corp. CEO, America's Cup challenger, and Quark's chairman of the board. Ellison owns about 70 percent of the company's shares and aims to develop cures for cancer and other diseases. "His vision is for [Quark] to eventually become one of the leading big pharmas," says Boaz Laor, president of U.S. operations, "and we are the spearhead of that intention."

Quark, Stem Cells, and Chips 
The essence of Quark's blueprint for drug discovery is its endpoint-driven drug development approach, by which it specifies desired clinical endpoints and relentlessly pursues axes for intervention. The

Pharmos Corp. CEO Haim Aviv is referred to by many as the father of Israeli biotechnology because he was among the first to attract the attention of American venture capitalists. 
company begins by focusing on a key phenotypic event characterizing the disease pathology, such as cell death or reduced glucose uptake. This event is reproduced in tissue culture conditions. A proprietary set of complementary high-throughput technologies are then used to identify the genes and/or proteins that mediate or inhibit the event and profoundly affect relevant disease pathways. Finally, inhibitors are developed as therapeutics.

"There was always this 'promise of the genome,' but everyone was looking at [gene] expression, which is important because it finds you the targets, but it finds you hundreds of targets," notes Shai Ehrlich, Quark's senior director of portfolio management. "Many genes/proteins that are important in disease are not differentially expressed, and they remain undetected or overlooked. Protein regulation, not RNA regulation, is the relevant process here."

"Function is where we distinguish ourselves — real function in the phenotype of the disease," asserts Daniel Zurr, Quark's president and CEO. "We have developed a method to look at translation and post-translation events. Rather than looking at the total RNA, we compare polysomes [RNA loaded on the ribosomes and ready to produce proteins] between healthy tissue and pathological tissue."

Quark recently patented its method of separating polysomes, creating probes, and putting them on microarrays, which enables them to differentially detect the genes/proteins as they are being made. "Our secret, basically, is the different ways we use the DNA chip," Zurr explains. "We have a method to make extra uses of a microarray. I can look at a protein and see whether it is purely a translation of RNA, is already chopped, cleaved, phosphorylated, or acetylated, at the time when it has something to do with disease. I will catch the culprit in the act."

One of the perpetrators sought by Quark causes collateral damage and possible rapid deterioration of a patient's neurological status after the initial ischemic insult of a stroke. "We have found the genes that are responsible for normal cells at the periphery of the infarct getting the signals to commit suicide, resulting in expansion of the infarct," Zurr says. "We have even transformed one now to chemical screening and bioassay and can block the self-destructive process of the cytotoxin gene products, so you will get a much better prognosis."

Several years ago, Zurr developed relationships in Japan that have helped his company to strike collaborative research and license agreements with eight large pharmaceutical companies, including AstraZeneca Pharmaceuticals LP, Sankyo Corp., and Fujisawa Pharmaceutical Co. How do current regional geopolitical circumstances affect Quark's other business in Israel? "People are refusing to come to meetings in Israel, so we have to travel," Laor says, "but we have not found that it is causing potential collaborators to back down or to stop negotiations."

Academic collaborations provide Quark with important resources such as purified cell lines for its stem cell research program, an endeavor that cuts across its various pursuits in therapeutics for cancer, cardiovascular diseases, senescence, diabetes, and other disorders. "We want to identify the genes that are critically involved in self renewal and differentiation of stem cells and obtain a clear idea of how they are activated and when they interact," says Jan Visser, head of the Laboratory of Stem Cell Biology at the New York Blood Center, one of a three-member consortium working with Quark.

Dov Zipori is professor of molecular cell biology at Weizmann Institute of Science in Rehovot. The institute provides Quark Biotech with cell lines for its stem cell research program. 
"The number of stem cells in a donor is minute. Nobody knows what the signals are for them to multiply. This is the 'holy grail,'" says Dov Zipori, professor of molecular cell biology at the Rehovot-based Weizmann Institute of Science, another member of the same consortium. "If [Quark] succeeds [in causing stem cell proliferation], they will be able to create a medicine that will be useful in any kind of therapy, such as in blood diseases, cancer, organ transplantation, remodeling of organs, and creating organs de novo."

The effort to identify and clone each one of the thousands of changing genes, express it, and build assay systems to assess its role in stem cell renewal represents a huge analytic project that involves many people from multiple disciplines. Quark has almost 300 employees, including scientist experts in molecular and cell biology, genetics, pathology, and chemistry, as well as 40 bioinformaticians.

Founding Father 
A few doors down in the Weizmann Science Park resides Haim Aviv, the CEO of publicly traded Pharmos Corp., who is often considered the father of Israeli biotechnology because he was the first to attract American venture capitalists. He founded Biotechnology General Inc. as well as Novamed Ltd., Peptor Ltd., and HerbaMed Ltd. His youngest corporate offspring, Ramat Gan-based Predix Pharmaceuticals Ltd., is in the business of computationally based drug design.

Aviv and molecular biologist Silvi Noiman, Predix' chief operating officer, teamed up in 2000 with Oren Becker, a Harvard University graduate and Hebrew University-trained computational biophysicist. Becker, along with graduate student Sharon Shacham, had been developing algorithms at Tel Aviv University for protein modeling and structure prediction. They obtained from the university an exclusive worldwide license for their algorithm, PREDICT, and raised about $8 million from Orbimed Advisors LLC, Yozma Venture Capital Investment Fund, and Fred Frank, vice chairman of Lehman Brothers. Most recently, they hired as CEO Michael Kauffman, a previous vice president of medicine at Millennium Pharmaceuticals Inc.

Multiple-level hierarchical algorithms such as PREDICT employ sequence information and the known properties of membranes in specific cellular environments to determine the 3-D structure and properties of G-protein coupled receptors (GPCRs), the most successful and popular targets to date for drug discovery.

Structure-based drug discovery relies on the competition of a drug molecule with natural ligands by inserting itself into the functional site of the target protein and inducing or inhibiting its activity. "We take the chemical, physical, and biological understandings of the process with all its complexity, and we write a code to formulate them in terms of 3-D structures of the protein target itself and of the small molecules," Becker explains. "I call it computational biophysics, but any combination of the names would work."

Computational biophysicist Oren Becker is one of the Tel Aviv University developers of the PREDICT algorithm. PREDICT helps to determine the 3-D structure of target proteins used in drug discovery. 
The principle works. Cox-2 inhibitors, such as rofecoxib (Vioxx), were developed by means of structure-based drug discovery using X-ray crystallography. These so-called "super aspirins" are designed to retain the cyclooxygenease enzyme structures having analgesic properties but not those causing side effects such as blood thinning and stomach ulceration. Such methods are viable for water-soluble proteins, which can be crystallized, but proteins that are embedded in the membrane (ion channels, receptors, transporters) constitute a huge class of targets, and their 3-D structure cannot be experimentally solved.

"That is where you put your algorithm to work," Becker says. "If you have the 3-D structure, you know why compounds interact, where they interact, how they interact, and if you have that kind of insight you can design or screen compounds in a faster and more efficient way. When you have the 3-D structure, you can really work miracles."

The model structure produced by PREDICT for rhodopsin was validated against the experimentally determined structure. The root mean squared distance between the two was 3.4 angstroms, indicating close similarity.

"Of course, one of the fun things is that you cannot just do that solely on the computer," Becker says. "At some point you have to go to the lab, and you continue to work together with that chemist, for example, hand in hand, and each brings his own insights." Noiman also points out that Predix' tools allow medicinal chemists to work together with their computational colleagues to acquire information about the binding modes of the lead compound and decide how to modify it for lead optimization. It is a good example of successful bridging of the culture gap between life sciences and IT.

Meanwhile, in the same neighborhood, a young biosimulation firm is working single-mindedly with mathematical algorithms and software tools, along with clinical and preclinical information, to rationalize the drug discovery process.

Optimata Ltd., led by biomathematician Zvia Agur, develops clinical-trial simulation tools for cancer and hematological disorders. Its set of mathematical algorithms, called the "In Silica Patient," simulates the behavior of a drug molecule inside a cell, running it through the various pathways in a patient undergoing drug treatment. Detailed knowledge of a drug's properties and crucial physiological and pathological information are used by the algorithms to optimize treatment protocols for individuals or subgroups of patients. Novartis Pharma AG has contracted Optimata to assess the mechanism of a new drug under development and to provide improved schedules for a drug's various indications.

"With so much experimental trial and error [in drug discovery], and too little rationalization, I have been telling my students to think forward to methods such as the E-Cell and electronic clinical trials.

The Sweet Spot 
Lod, Israel-based Glycominds compiles information on carbohydrates for pharmas

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Eventually, you may simulate a human being," Aviv says.

Lod, a few stops on the commuter rail southeast of Ramat Gan and minutes from the international airport, is home to the headquarters of Glycominds Ltd. (see "The Sweet Spot," right). This startup is opening up the world of carbohydrate research, or glycomics, for medical research.

The lure of Israel's traditional strong position in high-tech and the life sciences and its reputation for innovation and entrepreneurial spirit is evident. Within Tel Aviv, the Sharon Valley, and Coastal

Written in Stone 
Rosetta Genomics uses an industry-standard platform to solve the challenges of scalability and high cost

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Plain areas, there is no shortage of young companies providing information science tools and platforms for post-genomic drug discovery. Back in the direction of Jerusalem, a number of companies are specializing in data modeling and data mining for drug discovery, such as Rosetta Genomics Ltd. (see "Written in Stone"), IDgene Pharmaceuticals Ltd., and Clinical Discovery Inc. As the traditional saying goes, "Next year in Jerusalem."*

Hillel Alpert is founder of Vital Science & Health, an R&D and scientific communications consultancy with offices in Newton, Mass., and Israel. He can be reached at 


For reprints and/or copyright permission, please contact  Jay Mulhern, (781) 972-1359,