EP 145: Shlomo Noy - Why Healthcare Innovation Fails Without the Right Strategy

Healthcare investment is booming, but why do so few initiatives actually deliver lasting impact? While funding flows into biotech and life sciences, many leaders overlook the complex strategies needed to bridge research and real-world application. Are you ready to discover the key to successful healthcare innovation and make informed decisions that truly drive change?

In this episode, Shlomo Noy, a pioneer in biotech investment and former VP of R&D at Sheba Medical Center, breaks down the secrets behind impactful investments in healthcare. From reshaping the DNA of institutions to aligning incentives for breakthrough results, Shlomo reveals the strategies that fuel successful innovation on a global scale.

🎙️ What’s Inside: 

1️⃣ The Art of Incentives: Discover how to balance researcher motivations with long-term institutional gains for innovation that sticks. 

2️⃣ Israel's "Silicon Wadi" Secret: Learn how Israel transformed its natural limitations into a biotech powerhouse—and what other regions can learn from this approach. 

3️⃣ Opportunities in China's Healthcare Market: Shlomo shares his insights on the untapped potential of China's rapidly growing healthcare sector, including strategic entry points for Western companies.

👤 About Shlomo Noy:
With over 25 years of experience, Shlomo Noy has led R&D at one of the world’s top-ranked hospitals and spearheaded healthcare investments worldwide. His expertise in aligning financial, clinical, and technological insights offers a rare, multidimensional view on successful healthcare innovation.

💡 QUOTES:
(00:08:14) "In life sciences, bridging finance with clinical insight isn’t optional; it’s essential."
(00:29:39) "Transforming healthcare innovation requires reshaping the DNA of an entire organization."
(00:41:02) "Our natural resource isn’t oil or gas—it’s the innovative minds of our people."
(01:34:49) "China’s healthcare market is ready for innovation—and the opportunity is enormous."
(02:12:54) "In the next 5-10 years, China's focus on women's health will redefine global markets." 

⏰ Timestamps:

(00:04:10) Shlomo Noy's Journey in Healthcare and Biotech Leadership
(00:07:38) Multidisciplinary Teams: A Key to Biotech Investment Success
(00:19:22) Protecting Researchers with In-House Tech Transfer Support
(00:29:39) Transforming Healthcare: Changing the DNA of Innovation
(00:38:36) Israel’s Silicon Wadi: The Biotech Innovation Boom
(00:48:35) How Incentives Drive Institutional Tech Transfer Success
(01:04:50) AI's Role in Drug Discovery and Patient Recruitment Challenges
(01:20:02) China’s Healthcare Market: Uncovering Growth Opportunities
(01:28:53) Clinical Trials in China: Scale and Efficiency Advantages
(01:37:00) How Biotech Companies Can Navigate China’s Clinical Trial Landscape
(01:53:03) Global Investment: Aligning Interests in Healthcare Innovation
(02:17:13) Key Takeaways: Managing Innovation and China’s Healthcare Market

If you’re ready to uncover the strategies behind impactful healthcare investments and explore new markets with confidence, this episode is packed with insights you won’t want to miss.
Subscribe, comment, and share to help us bring more valuable content from leaders like Shlomo Noy.

👀 Stay Tuned: Watch the entire episode to learn how to harness innovation, incentivize success, and navigate global healthcare opportunities.

Transcript

00:00:00:00 - 00:00:11:04
Christian Soschner
Healthcare innovation is advancing at a breakneck pace, but understanding how to invest with true impact isn't always straightforward.

00:00:11:04 - 00:00:31:00
Christian Soschner
For investors and leaders, especially those looking at global markets, making the right moves requires a depth of insight. Most never realize the need. In today's episode, we explore the secrets to making these high stakes decisions count.

00:00:31:00 - 00:00:32:02
Christian Soschner
if you want

00:00:32:02 - 00:00:34:04
Christian Soschner
to be an investor, which has meaning,

00:00:34:04 - 00:00:35:20
Christian Soschner
you cannot ignore

00:00:35:20 - 00:00:44:09
Christian Soschner
Imagine trying to drive innovation in one of the most complex sectors without a clear roadmap.

00:00:44:11 - 00:00:46:20
Christian Soschner
That's where Shlomo Noy comes in.

00:00:46:20 - 00:01:08:22
Christian Soschner
With 25 years as the vice president of research and Development and founder of the Tech Transfer Office at Sheba medical center, ranked among the top ten hospitals globally, Shlomo has firsthand knowledge of what it takes to align research, finance and clinical application.

00:01:08:22 - 00:01:24:06
Christian Soschner
the main challenge because first, they don't believe you. Second, they think, the hospital has a leverage on me. I am an employee. So if I will argue, you know, they will have they have measures

00:01:24:06 - 00:01:33:05
Christian Soschner
In this episode, Shlomo shares insights that could redefine how leaders approach healthcare investment and innovation.

00:01:33:05 - 00:01:34:18
Christian Soschner
Here is what you can expect.

00:01:34:18 - 00:01:42:24
Christian Soschner
We delve into the art of balancing incentives for researchers and ensuring in-house innovation stays competitive.

00:01:42:24 - 00:01:50:02
Christian Soschner
Shlomo reveals the unique strategies that put Israel's tech ecosystem on the global map,

00:01:50:02 - 00:01:59:21
Christian Soschner
and he opens up on the healthcare expansion in China and market. Ripe with potential but often misunderstood by Western companies

00:01:59:21 - 00:02:03:07
Christian Soschner
So what is the objective? The objective is

00:02:03:07 - 00:02:10:23
Christian Soschner
If you are a CEO, politician or investor.

00:02:11:00 - 00:02:29:16
Christian Soschner
This episode is packed with insights you won't want to miss, so be sure to subscribe, comment and share this episode. Let's dive in and uncover the keys to making healthcare innovation work on a global scale.

00:02:30:06 - 00:03:00:20
Shlomo Noy
So I'm it's good to have you on the show. I looked into your CV in the preparation of the podcast, and it's so impressive what, you have done and what you have accomplished in, in your business career. Maybe you can we can start the podcast with you leading through your career. And let me start with the first question, what what sparked your interest in pursuing a career in health care?

00:03:01:05 - 00:03:24:23
Christian Soschner
Thank you. Thank you, Christian. First of all, thank you for inviting me to the show so that the podcast, I am happy very much. I'm very happy to be here. And as you said, let's start from the beginning. I started the to be a medical student when I was 17. I was interested for all my childhood, so to speak, in the field of healthcare.

00:03:25:00 - 00:03:59:02
Christian Soschner
And later on, my career went to other direction, but still, the fact that you can, you know, help people either by being a clinician or working biotech and be a partner to any development and, and, changing the modes of therapy, you have impact on lives of people. That's I think my, my main model to have impact on the way people are treated and the way people are said, most of I am an M.D. and MBA.

00:03:59:02 - 00:04:29:01
Christian Soschner
I did the Fontainebleau and Insead, and then I did the PhD. And, my career is a little bit clinician, but mainly healthcare manager. And in the last, 25 years, I would call myself R&D manager. Biotech manager. Things like this. And I think that what I learned in life is the most important thing is the interfacing.

00:04:29:01 - 00:04:57:08
Christian Soschner
Because if you are only a clinician, you will not be able to materialize the IP. The fact what you did in the lab or if you are a researcher, my main career is integrating between business investment, how to take it to the public, how to make a device or a drug. For me, and interfacing with the basic science or clinical side.

00:04:57:10 - 00:05:11:21
Christian Soschner
That's I think what they did in the 30 is interfacing between research and actually, development of drugs and devices.

00:05:11:23 - 00:05:42:02
Shlomo Noy
Let me ask you one question. What you said is, that you have, an education in, on one hand, in medicine in, healthcare, in, anything around healthcare. And on the other hand, you pursue also business, let's call it career. Business education, in the world's best, institutions. Actually, and I read something similar in the biographies of Elon Musk, for example, I said, okay, physics and business management.

00:05:42:02 - 00:06:06:24
Shlomo Noy
And his argumentation was I wanted to study business, so that I can become my own boss and that, nobody knows anything. More than I do in business and, can pull me over. And also, Charlie Munger writes in his output, Chinese Almanac that, he thinks it's necessary to my disciplinary in business and in investing.

00:06:07:01 - 00:06:28:22
Shlomo Noy
I'm curious to hear your opinion. Why do you believe it's necessary for life science investors not only to stay on the science track, but also become sort of multidisciplinary and look more towards business, more towards investing, and more towards other disciplines. But what is your opinion about that?

00:06:28:24 - 00:06:29:06
Christian Soschner
I

00:06:29:06 - 00:06:47:11
Christian Soschner
think that life science is very different from I.T or Siberia or any other investment opportunities. Oh, venture capital or investors or whatever Elon Musk is doing. I think that life science is different, is very unique in the sense that

00:06:47:11 - 00:06:53:16
Christian Soschner
if you want to invest to be an investor, which has meaning, you cannot

00:06:53:16 - 00:07:04:22
Christian Soschner
ignore the clinical side. You cannot be a pure banker here because the asymmetric information is so prominent.

00:07:04:24 - 00:07:35:15
Christian Soschner
I think that, I think no one can be an expert in it, but I think that you can learn it and understand it. But if I come to you and I explain you about a target in immunology, and you are the investor, you will feel a little bit uncomfortable. Or if I'm talking to you about investing in, in, in a, in a clinical indication, which is there, would you go and invest?

00:07:35:17 - 00:08:01:05
Christian Soschner
You need to understand the clinical indication. You need to understand the basic signs that no one of us is is a basic scientist. If you look at the American Medical Association, there are 74, specialization in subspecialty specific. And so no one can understand 74 I'll be an expert on all 74 disciplines, but you have to understand the vocabulary.

00:08:01:05 - 00:08:16:17
Christian Soschner
You have to understand it. Because otherwise being a pure financial investor is very different in life science as opposed to other investment fields. That's my that's my opinion. Yes.

00:08:16:17 - 00:08:24:05
Shlomo Noy
What's what makes it so different in your opinion? Asymmetric information is is such a problem?

00:08:24:07 - 00:08:25:24
Christian Soschner
No. But in

00:08:25:24 - 00:08:46:05
Christian Soschner
this discipline, the asymmetric information between, those that are in the field and those, not is much, much larger than in it. For example, the the gap between one that understand the vocabulary, that understand what to

00:08:46:05 - 00:08:52:20
Christian Soschner
ask and so on. As an investor, is much, much bigger than in any other

00:08:52:20 - 00:08:57:19
Christian Soschner
disciplines. For example, it but that's a big difference.

00:08:57:19 - 00:09:15:06
Christian Soschner
And that's why I think that in life science interfacing, like you, like you quote interfacing between the financial business side and the clinical side is crucial. That's what I feel that the is thing.

00:09:15:09 - 00:09:31:18
Shlomo Noy
So when I understand your rights, it's necessary to be really multidisciplinary with the team set up when someone is interested in investing in life sciences is, an understanding that you could do.

00:09:31:20 - 00:09:32:14
Christian Soschner
Put it very

00:09:32:14 - 00:09:44:21
Christian Soschner
accurately, very, very and very, very accurately. That's it. You need a multidisciplinary team if you want to deal with biotech investment.

00:09:44:23 - 00:09:54:10
Shlomo Noy
I'm curious to hear your opinion. What are the five most important disciplines that you would put on a team?

00:09:54:12 - 00:09:56:20
Christian Soschner
You mean you're talking about team members?

00:09:56:22 - 00:10:08:13
Shlomo Noy
Team members have, for example, you have your job is to put together a fund and a team. And you have a multidisciplinary approach. What would be the five most important disciplines?

00:10:08:15 - 00:10:08:19
Christian Soschner
If

00:10:08:19 - 00:10:16:14
Christian Soschner
we are talking about biotech and not medtech, we should really be different.

00:10:16:14 - 00:10:45:08
Christian Soschner
In biotech specifically, I would I would go for course, basic science, finance experience and investment understanding the capital market. There would be IPO, there would be M&A. You have to have some experience in that. You have to have also, someone that understand in clinics in the in the clinical application because it goes to clinical stages.

00:10:45:10 - 00:11:09:17
Christian Soschner
Hopefully. And and you need also, someone that understands regulation highly important at least the vocabulary does not have to be an expert to be someone that knows the legal slash regulation and can ask the regulator, regulatory consultant what to do. So these are basically the five discipline I

00:11:09:17 - 00:11:12:13
Christian Soschner
put in.

00:11:12:15 - 00:11:36:08
Shlomo Noy
You started in, your career from the medical side. What what was there? What was the pivotal moment where you said, okay, it's great that you work in the hospital. I saw in your CV that you have experience with the Sheba medical center. Yeah, and then decided to become an investor. What was that pivotal moment where you said, okay, I wanted to more in that field?

00:11:36:10 - 00:11:46:07
Shlomo Noy
I mean, many people are happy when they, stay in the medical field. And you said, okay, no, that's not, let's move on. What was this pivotal moment.

00:11:46:09 - 00:11:47:00
Christian Soschner
First of all,

00:11:47:00 - 00:12:18:23
Christian Soschner
curiosity. Cohesity is something highly, highly important for everyone of us to continue in this life and make it as interesting as you can because we are preparing. I think, in my opinion, you always prepare the next move. What I did in Sheba in Sheba goes for 24 years. The vice president for R&D and the chairman and founder of the tech transfer company of Sheba, which did very impressive exits.

00:12:18:23 - 00:12:45:03
Christian Soschner
By the way, the last one, if you look, we did, it's a company that I was the chairman and the founder in 2012. It's called innovation. Edwards, the large corporation of, of value Replacement and Value Equipment just purchased it a week ago, a week ago for 330 million US.

00:12:45:03 - 00:12:49:10
Christian Soschner
Well, and I was the chairman in Congress, so basically I

00:12:49:10 - 00:12:50:09
Christian Soschner
did it in my career.

00:12:50:14 - 00:13:24:22
Christian Soschner
Sheba is the VP or and the and chairman and founder of tech transfer. Basically I learned it hands on when he started. I had only academic background as an MBA and a big D in economics and policy, but they didn't have practice. So I started I created the institution. So it's highly important for a hospital with 10,000 employees to change the DNA organizational behavior and so on.

00:13:24:24 - 00:14:02:00
Christian Soschner
And basically that's what I did. But the difference is that what I've seen in 24 is that any other university or academic institute that I was in is early stage, early early stage, and what you do is basically licensing and going, and that's what you do. You have to understand what is the potential of the IPO, invest in the IP, but then you licensee, you are not following the development of someone comes early stage takes it out.

00:14:02:02 - 00:14:29:21
Christian Soschner
What I do in the fund is basically very different because I see companies in a more advanced stage. But what they did in Sheba basically prepared me very well to the fund. And then I decided that they needed another career. After 24 years, and I joined the fund as a partner. They will never take me as a partner, never.

00:14:29:23 - 00:14:32:23
Christian Soschner
If I didn't have the experience that Sheba.

00:14:33:00 - 00:14:33:17
Shlomo Noy
I believe to

00:14:33:17 - 00:14:52:14
Shlomo Noy
do this is this is very beneficial for a fund to have someone on board who understands the end to end value chain from the patient back to track tech transfer before we move the discussion to the fund. I have a lot of questions, for define, but let's stay a little bit with tech transfer and Sheba medical center.

00:14:52:14 - 00:15:06:14
Shlomo Noy
I saw in your CV that you started in, 2000 as a VP for research and development and founded the Tech transfer unit. We are talking about the year 2000. Is is this correct?

00:15:06:16 - 00:15:08:00
Christian Soschner
Yeah.

00:15:08:02 - 00:15:30:15
Shlomo Noy
Tech transfer in Europe, in my opinion, as a as a functioning and organization is rather young and try to new. So basically you were one of the first ones who said okay, that's necessary. But what I'm interested to hear is why did you think it's necessary to have an old tech transfer function in the hospital now?

00:15:30:15 - 00:16:14:23
Christian Soschner
Because basically the, the basically without without terms and condition, which assures the researcher and the clinician there. Right, there will be no signs and there will be no innovation because the asset is the IP. Eventually at this stage. So until 2000, what people did was basically take what they did, went to a venture capital, not to the hospital, and then continue from there, but eventually they did not make a good return because dilution and dilution and dilution and other capital around and so on.

00:16:15:00 - 00:16:45:15
Christian Soschner
And they left with nothing. The fact that we did a tech transfer in-house basically made their life easier. And our output as a but only ten years after. But these are very long term processes. What we sold effect of creating the tech transfer company in-house only after 8 or 10 years, because you have to to change the DNA of the stuff.

00:16:45:17 - 00:17:11:02
Christian Soschner
Basically we we said to the staff, listen, you don't take a risk. You'll bring your idea to us in-house. We are in the hospital in the middle of Lunchbreak you come, you show all your innovation. We help you. We don't have to do it. We have an IP, we have an IP expert in-house. It looks, for example, that there is no buyer out.

00:17:11:04 - 00:17:41:14
Christian Soschner
You don't just research. It's not understated by all. And there are many, many databases specializing in this which are highly expensive. So there's us don't chase it goes people helps in and then it doesn't listen. Excellent idea. But here you heard you see you have so many people that thought about it before. So he leaves it. But if it's good, you go to the patent committee.

00:17:41:20 - 00:18:13:11
Christian Soschner
The patent committee means payment means the hospital. Take the risk. Early stage patent can come to 50, 70, 100 bands on what you do. And suddenly the early stage, high risk money is paid by the hospital. So he thinks that's good. And now we protect him. We are a big organization. We are professional organization. We protect him when it comes to the next stages because we are professional.

00:18:13:12 - 00:18:50:03
Christian Soschner
He continues to be a researcher. He does not have the time or the attention, all the knowledge, how to deal with the board meeting that decides on capital raise for debt valuation or debt. He does not. So here's he got an umbrella that also protects his life. And we created a mechanism whereby when the when the hospital gets $1.30 5 to 40 depends, then comes to him so his rights are aligned with us.

00:18:50:05 - 00:19:23:04
Christian Soschner
We invested the money, we took the lawyer to, to to make the licensing agreement. We protect the milestone payment, we protect the IPO, we protect everything. And he gets 35 to 40% of each dollar to the hospital get. And that's a evolution because it gives him incentive. It allows him to stay with what he likes a nation or be a researcher takes care of all the things that he does not understand.

00:19:23:06 - 00:20:04:07
Christian Soschner
Capital raise and all of it. And basically, by the end of the day, if it's a success story, he is benefiting like all other players. And this has increased the outcome of R&D at the hospital of the band is five fold five x outcome measures in IP in x six. In licensing agreement, because they understood that the best way is not running out to the venture capital, but the others stay in the hospital.

00:20:04:09 - 00:20:12:18
Christian Soschner
And continue to do what you like. Why we like of is I'll take in Gil. It's a revolution.

00:20:12:20 - 00:20:13:04
Shlomo Noy
I believe

00:20:13:04 - 00:20:34:04
Shlomo Noy
that it's a win win win. Basically, it's a win for the venture capitalists because you take a lot of work from their table. It's a win for the researcher and it's a win for the hospital. And it sounds to me like it's, tech transfer plus it's tech transfer plus incubation program that you can start. Yeah, it's, it's the shape of medical center.

00:20:34:06 - 00:21:01:22
Shlomo Noy
I'm curious. I had some episodes, and some experience myself with Tech transfer. And, in Europe, I experienced a variety of terms when it comes to out licensing technology from a research organization and a hospital or research organization or university into the first corporation. On the one hand, the most extreme that I experienced was 90% equity goes to the, owner of the patent.

00:21:01:24 - 00:21:02:04
Shlomo Noy
On

00:21:02:04 - 00:21:29:13
Shlomo Noy
the other hand, on the other side was there's a model of CERN in Switzerland which said 2% royalty when 2% royalty for licensing to technology, not exclusive. It's not exclusive. So it's, just part of not the patent, but just part of the technology as initial step. And then they upgrade the license when the team moves forward into compliance capital and wants more protection.

00:21:50:16 - 00:22:18:19
Christian Soschner
In my opinion, the majority of cases that transfer of office in and in the university of all speak on, cannot, cannot be an equity player. There are cases like in Nevada, which I mentioned to you, whereby we will we will an equity player, but usually it is changing. By the way, in the last three, five years, more and more research institutions are trying to play on the equity level.

00:22:18:19 - 00:23:00:01
Christian Soschner
But in general, I would say that you out license it in royalties manner. That does not being influenced by any capital raise in the future. And you as a tech transfer need the majority of flexibility if you want to go out whenever you can. So you have a royalties agreement and but you can you will have also a net present value model that if if someone let's say that now you are in phase two, you can go out without taking the risk or face the veil or not.

00:23:00:03 - 00:23:27:18
Christian Soschner
And there is something that is a calculate the net present value. And then you can go out with less money. But some money you have to be flexible. There should be milestone payment that you seek cash you need to cash. Mainly you need to seek cash in order to to self sustain the R&D unit. The money that will come in will be served to finance future patents that you want to do.

00:23:27:20 - 00:23:57:14
Christian Soschner
It's a it's a closed system. So in milestone payment you you finish the preclinical part, you get the 100,000 whatever whatever you agree you are, you have an and I and the approval and other 600 whatever. So you need to do a milestone because waiting for the royalties in ten years now sales is quite frustrating. So you make royalties, you make payment of sub licensing.

00:23:57:16 - 00:24:34:14
Christian Soschner
You make payment of of the milestones by clinical AI and the whatever you, you make, a definition of exit. For example, if you go IPO after phase one, the hospital gets a significant amount of money. That's if you play on the royalties game, if you want to play on the equity and then you need, you need to understand that in your office there's someone experience that can play in the board.

00:24:34:16 - 00:25:04:01
Christian Soschner
Of of of when you are an equity player meaning understand capital market, understand valuation, understand what does it mean in terms of of the hospital and and lights and value and so on. So I would say the basic idea of tech transfer is to signal to the researcher there's a that there's a change. Now if you have good innovation you will benefit.

00:25:04:03 - 00:25:18:04
Christian Soschner
You can do your research. Some of the money by the way, some of the other 60% on top and above the whole team that he gets, going to his lab. So he gets personal,

00:25:18:04 - 00:25:24:17
Christian Soschner
but also lab money. So the signal is you will be able

00:25:24:17 - 00:25:30:05
Christian Soschner
to do whatever you like. You don't have to go out. Everything is here in the campus.

00:25:30:07 - 00:26:02:19
Christian Soschner
You'll get personal money. You get lab money. And this will, first of all, stimulate significantly all the research in the hospital, all the university to be more applicable, to be more applicable in theoretical. And then, if you have the first layer, the first basic layer of more research, the second layer of devices or blogs will come out of you.

00:26:02:21 - 00:26:05:02
Christian Soschner
So, that's what I would do.

00:26:06:03 - 00:26:30:01
Shlomo Noy
Now, I totally agree, totally. My expertise is in business, and, especially what you said about equity. I think, the equity side in private companies, especially in deep tech, in biotech companies, should be reserved for people who actually invest capital into their company and are committed, for at least a 5 to 10 year, story.

00:26:30:01 - 00:26:53:03
Shlomo Noy
And, have also the capability and the network to invest more in the company, if necessary, to participate in for long rounds. And I always have, a very unpleasant feeling in my stomach, in my belly when, someone suggests, a high equity stake for a patent, I say, okay, this is more for the people who invest capital.

00:26:53:05 - 00:27:19:21
Shlomo Noy
And I also agree to what you say that, tech transfer offices should rather go milestone payments and royalties. Milestone payments practically signal also from the VC side that they are serious and that they are willing to pay and de value the institution and the value to research. And I think the third part is still also, I note that researchers don't like this term, but, it's from the business side.

00:27:19:21 - 00:27:35:08
Shlomo Noy
Service fees. So when researchers participate with the lab in further research and further development work, of course they should be paid at a good cost level and should not, donate the work for free to the company.

00:27:35:10 - 00:27:36:00
Christian Soschner
Not at all,

00:27:36:00 - 00:27:45:05
Christian Soschner
and I will. I agree with you. I highly not recommend to go on the model of 90% equity. The researcher,

00:27:45:07 - 00:27:47:18
Shlomo Noy
Is just the most extreme. Devote the most.

00:27:47:20 - 00:27:57:06
Christian Soschner
Students out of 70 and not 60 and no, it's, in my opinion, in my experience, this is not the right move to do.

00:27:57:08 - 00:28:16:23
Shlomo Noy
Yeah, I think it also, I mean, it makes venture capitalists walk away from the deal silently. Just, don't look at it any further except, an institution that has a fund when they come on board and say, okay, look, I invest 500,000 to R1 million with my fund. It's a different game. Or just for the patent? I would not do it.

00:28:17:02 - 00:28:30:03
Shlomo Noy
When we stay at your role, it's tech transfer. What was your biggest challenge when you started the tech transfer? You only started to that. You had to solve.

00:28:30:05 - 00:28:30:20
Christian Soschner
The biggest

00:28:30:20 - 00:29:06:23
Christian Soschner
challenge was the DNA of the research and and clinician at the campus. It's very hard. Doctors, conservative. And it's good that they, And they were used to 20 years of doing innovation in a very different way of going out of the hospital. But, they're changing the DNA, changing the atmosphere, the organizational behavior of the hospital.

00:29:07:01 - 00:29:22:19
Christian Soschner
It was the main challenge because first, they don't believe you. Second, they think, the hospital has a leverage on me. I am an employee. So if I will argue, you know, they will have they have measures

00:29:22:19 - 00:29:40:02
Christian Soschner
to force me. So I'd rather be out. Not in the know, not in their capacity, so to speak, in the, in their, in their bed work to leverage and let me put some of the eggs outside the companies.

00:29:40:02 - 00:30:12:00
Christian Soschner
Why why should I put all the eggs in in the company and things like this way of thinking like this. This was the the major challenge to change the behavior in the campus inside the company. And I think that after a few years, all of them were convinced that this is the the best way and the maximizing way for them and for the research in the lab is way.

00:30:12:07 - 00:30:39:07
Shlomo Noy
So you experienced a lot of headwind from the researchers at the beginning of your journey in the tech transfer field, and invested assume a lot of time in negotiations. And I think this is something business leaders very often face that initial reaction is rejection. And people don't want to don't don't see the value. And my question to you is how do you tackle such a situation?

00:30:39:07 - 00:30:50:06
Shlomo Noy
What's your tactic to motivate people and convince people to join forces with you? What's what's your negotiation secret?

00:30:50:08 - 00:30:51:24
Christian Soschner
I think the the are two elements.

00:30:51:24 - 00:31:18:01
Christian Soschner
First element is is case studies. And every everyone knows professor X we had we had a company. They did they did a very nice investment in collagen treatment of reflux. They will find you, very famous company didn't exceed the inventor. Everyone was, you know, it was in the paper.

00:31:18:01 - 00:31:50:00
Christian Soschner
So everyone was calling in, to congratulate him. And he told, like, 20 people, me between them. Listen, it's not big. The. After all, the capital around, the exit, they have 0.00002%, which means I have nothing. Because they looked at them, they looked at me, they looked at me, and everyone was thinking, hey, this professor is now a rich guy.

00:31:50:02 - 00:32:08:06
Christian Soschner
Look at that exit. No. And if you come to your faculty in the hospital and tell them, listen, we all you all know professor X, look at the story. He has a a huge investment. The company was called called Bao

00:32:08:06 - 00:32:11:22
Christian Soschner
Collagen Bao. And look

00:32:11:22 - 00:32:21:00
Christian Soschner
what happened. If you come with us or show, you will get more to you and to the lab.

00:32:21:05 - 00:32:52:05
Christian Soschner
So this was the first element case studies that showed that the glass outside the campus is not that green. And the second thing was talking to their comfort and rationale. And basically also one bottom thing is that I, as a doctor, understand the doctors and the 90% of us are risk averse

00:32:52:05 - 00:32:57:22
Christian Soschner
here in this country, very conservative.

00:32:57:22 - 00:33:14:15
Christian Soschner
As you said in the beginning, why moving from the medical field to another field, this is another and other illustration of the conservatism and of not taking this.

00:33:14:17 - 00:33:41:17
Christian Soschner
And you come to them and you said, listen, you are risk free. There's innovation. You are risk free. In-house makes the first screening for, you know, payment. You go to a you go to a patent attorney in the city and ask to see whether they apply what it will call it. It will cost you 15,000 bail when 10,000 will be so your risk free.

00:33:41:22 - 00:33:57:00
Christian Soschner
We took the blow off. We invest in the patents once we think it's going and we take out guns. All this 100,000 or in or with legal standard and put them from 80, 70, what have you.

00:33:57:00 - 00:34:03:02
Christian Soschner
High risk money. You don't know what will come out of it. We take

00:34:03:02 - 00:34:11:05
Christian Soschner
this new Mr.. Doctor, you are risk free.

00:34:11:07 - 00:34:11:16
Christian Soschner
Didn't have

00:34:11:16 - 00:34:14:21
Christian Soschner
any success. You are part of the

00:34:14:21 - 00:34:23:08
Christian Soschner
success. So this tactic of approaching the DNA of risk of health was very success.

00:34:23:20 - 00:34:57:24
Shlomo Noy
It. I understand you correctly. The tech transfer unit of the share, a medical center. When you installed it, took over the entire risk of this initial investments, which basically is patent fees and also provide it, I think, support for the researcher in the basic research. So the paid for the lab, they paid for the employees and gave a lot of support from the initial ideation face up to patents.

00:34:58:01 - 00:35:07:01
Shlomo Noy
And in the deal terms, you give 40% of everything that comes into to share with Medical Center, 40% to the 30.

00:35:07:01 - 00:35:10:04
Christian Soschner
Five, 35, the majority. Yeah.

00:35:10:06 - 00:35:17:05
Shlomo Noy
About 45, okay, 35% to the inventor and 60%. You said to the lab, you take it. All right.

00:35:17:08 - 00:35:19:04
Christian Soschner
No part of the 60 goes out.

00:35:19:04 - 00:35:20:01
Shlomo Noy
Okay, okay.

00:35:20:04 - 00:35:51:05
Christian Soschner
Because part part go. And majority of the part goes to the R&D, which is a silicon. There is no dividends. There is no money taking home by the, you know, but whatever comes the other 60 is two part of it to the lab of the investor o of the inventor, the researcher. But part goes to the R&D because with this part it goes to the R&D unit, to the tech transfer.

00:35:51:05 - 00:36:09:16
Christian Soschner
Basically, I will be able to finance the next pattern that will show up in six months or whatever. So if, by the way, if the tech transfer is a failure and does not have exits, eventually after a few years it will

00:36:09:16 - 00:36:14:03
Christian Soschner
be closed, because it will not have money to invest in

00:36:14:03 - 00:36:23:04
Christian Soschner
the future paid. But here, when the money comes, some of it stays with the tech transfer and finance.

00:36:23:06 - 00:36:24:23
Christian Soschner
The next move.

00:36:25:01 - 00:36:43:19
Shlomo Noy
That's also motivation, then for the tech transfer team to be profitable and to negotiate profitable terms and not fully rely on the hospital. So to really, I got you start turning the wheel and then you invent it in a way and keep it going in a way. That cash flow scene goes back into research. They produce new patents.

00:36:43:21 - 00:36:59:10
Shlomo Noy
You put the new ideas out on the market, fund it with venture capital, which creates the next round of returns. And at the end of the day, hopefully in 10 to 15 years, then you have a few big hits and they create bigger returns for everyone involved in the process.

00:36:59:13 - 00:37:01:07
Christian Soschner
Exactly, exactly,

00:37:01:07 - 00:37:01:22
Christian Soschner
exactly.

00:37:01:22 - 00:37:26:24
Shlomo Noy
So that makes a whole lot of sense. The share of medical center is in Israel. Yes. And up until a few years ago, at the beginning of the pandemic, I always thought Israel is very good in research, of course. But not much better than the European, regions, like in the United Kingdom, like in Switzerland, like in Austria, like in Germany and all the other beautiful countries we have here.

00:37:27:01 - 00:37:52:04
Shlomo Noy
But a conversation on my podcast, four years ago, convinced me that it's different, that Israel is so far ahead than Europe and more comparable to Silicon Valley. And, she said, there is this name, Silicon Valley, that some people refer to, especially as areas in Israel and say, okay, it's as innovative as Silicon Valley.

00:37:52:05 - 00:37:52:13
Christian Soschner
Right.

00:37:52:14 - 00:38:12:01
Shlomo Noy
And I had some Israelis on my podcast in the last years, and they all confirmed the same. It's, it's really a good breeding ground for innovation. And my question to you is, why is that? What is the secret sauce of Israel wise? Why Israel, we're so far ahead in Europe.

00:38:12:03 - 00:38:31:09
Christian Soschner
I think, first of all, just to illustrate it, last week there was a deal of a cyber company called weeds that was 23 billion, 23 billion USD sold to Google.

00:38:31:11 - 00:38:33:02
Shlomo Noy
And this was also Israeli.

00:38:33:04 - 00:38:33:23
Christian Soschner
Yeah.

00:38:34:00 - 00:38:36:10
Shlomo Noy
Really? I didn't know that.

00:38:36:12 - 00:38:46:21
Christian Soschner
Last week w I z 23 billion. While, it's I cannot even count it.

00:38:46:23 - 00:38:48:19
Shlomo Noy
Yeah. We need more such success stories.

00:38:49:00 - 00:38:50:18
Christian Soschner
Yeah.

00:38:50:18 - 00:39:25:06
Christian Soschner
So, I think that, as you said, what is the secret sauce? I think I think that first of all, Israel invested a lot of of energy and, and time and attention to, research. Even in the 50s, when we were a company, we understood that we don't have oil, we don't have minerals, we don't have anything, we don't have gas.

00:39:25:08 - 00:39:39:07
Christian Soschner
Our natural resource is. The head. That's the only gas that we have. Our heads so invested a lot of money in excellent academic.

00:39:39:07 - 00:39:43:07
Christian Soschner
And I think the the DNA of Israeli is very

00:39:43:07 - 00:39:52:21
Christian Soschner
entrepreneurship. We like to be entrepreneurs. We like to moon. We like to go to use to the States, come back, go back to Europe.

00:39:52:23 - 00:40:41:08
Christian Soschner
We like to move. We don't stay. We are in a way, we are in unrest. Unrest has some positive implications, like forcing you to do things. And I think that's the second thing. I think that also, people ignore it. But we had the blessing, in the beginning of the 90s, in 91 and 92, Israel was something like 5,000,005.5 and 1.2 K with the Russian immigration after Yeltsin and the change in 80, 90, 91.2 Jews came from Russia to Israel.

00:40:41:10 - 00:40:48:06
Christian Soschner
A big change, because what happened in Russia, because they didn't have money was excellent

00:40:48:06 - 00:40:53:12
Christian Soschner
education in basic science, in medicine, physics, chemistry,

00:40:53:12 - 00:41:16:18
Christian Soschner
but no laboratories, no money for equipment, no money for that. So excellent theoretical experience. These guys were amazing. Amazing. And they came to Israel and and the government didn't know what to do. Okay. You know, you need to do something with 1 million immigrants to a society which is 5.5.

00:41:16:18 - 00:41:39:24
Christian Soschner
So it's like, you know, almost 20% newcomers. What do you do? And in my opinion, the game changer was the incubation system that started in 95 and 97. The government created 28 incubators for biotech, benthic

00:41:39:24 - 00:41:49:11
Christian Soschner
I.T, even food. They think about food tech. Really interested when no one thinks about this already.

00:41:49:13 - 00:41:53:14
Shlomo Noy
We are talking about 95, 96, 97. So it was when business system.

00:41:53:14 - 00:41:54:08
Christian Soschner
So basically

00:41:54:08 - 00:42:28:18
Christian Soschner
what the government did was creating the envelope investing in in, in in a core envelope. We called it in Hebrew envelope, which is only a financial guy in accounting guy and marketing guy, a logistic guy, which is the core team. And around them between 15 to 20. Early stage, early stage, two people, three people, a project even not company project.

00:42:28:20 - 00:42:36:17
Christian Soschner
Now they get all this knowledge which they don't have from this core team, and they have two years in the incubator,

00:42:36:17 - 00:42:41:04
Christian Soschner
and the and after two years, we

00:42:41:04 - 00:42:47:10
Christian Soschner
call it the Death Valley because many of them cannot go to

00:42:47:10 - 00:42:58:22
Christian Soschner
the next step, which is wasting money and staying alive. And that's why it's called the The Valley. But if you showed something in two years, you will get finance and you'll move on.

00:42:58:24 - 00:43:15:20
Christian Soschner
Incubation system 28 incubators, which is something like 300, 400 projects or all. There is one change and it's still the engine of the economy until now. And this was a game changer. No one talked about this.

00:43:15:20 - 00:43:23:22
Christian Soschner
No one, no thinking about incubation in 97. Now the whole world is doing incubator now.

00:43:23:24 - 00:43:43:21
Shlomo Noy
When when I was first, one of the first incubation programs in the world was Y Combinator. I think it started in 2003 or 22, and Israel started already about, let's say, ten years, ten years, seven, seven, eight years earlier, where inspiration came from.

00:43:43:23 - 00:43:44:23
Christian Soschner
I think there was

00:43:44:23 - 00:43:57:10
Christian Soschner
and there was a pressure show that came a bottom up, lots of engineers, lots of I.T guys, lot of chemistry, physics

00:43:57:10 - 00:44:12:17
Christian Soschner
with no work, with nothing to do. And the guy was said wisely, smartly, they said, anyway, I will need to feed them, feed them, so to speak, in the next five years until later.

00:44:12:19 - 00:44:43:03
Christian Soschner
So let's give them money that helps their immigration and absorption. But let's tunnel them to what they know physics, chemistry, medicine and so on. Because anyway, I will have to spend the money because I will not let them die in the street. Oh yeah. State we are a solidarity society. We don't have homelessness. Right. So this was the genius.

00:44:43:03 - 00:45:25:16
Christian Soschner
I mean, it was a pressure from bottom up. What do we do? And they said, listen, let's take the money. And instead of giving them an allocation and we must come to the Social Security again, I don't know, 1000 zero. I'll put the 100,000 or the 1000 oh. Alternatively, in this incubator system and this, this, I think this was the changing point of Israeli economy until 97 and until 99 and 2000, the GDP here per person was one of the lowest in the world.

00:45:25:18 - 00:45:30:17
Christian Soschner
One of the lowest in the world. There was nothing here.

00:45:30:20 - 00:45:53:14
Shlomo Noy
I mean, these trade is one of the big problems, like Singapore, for example. I mean, no natural resources. But this incubation idea, I think this is genius. This was genius. I totally agree to that. And, I mean, you're a fan of meritocratic systems where you say, okay, look, eminence, that's giving you money for doing basically nothing or getting drunk, all day long and, sitting home and watching television.

00:45:53:16 - 00:46:09:00
Shlomo Noy
You have some money, you come back in two years if you understood you correctly. And if you'll show me something of value, you get a million, and then you come back into a year. And if you show me something of value, then I give you 10 million. That's a very smart move.

00:46:09:02 - 00:46:09:17
Christian Soschner
I'm not

00:46:09:17 - 00:46:10:23
Christian Soschner
sure that about it.

00:46:10:24 - 00:46:16:19
Shlomo Noy
I just just it's just just just making it up to to, exemplify.

00:46:16:21 - 00:46:18:00
Christian Soschner
Something of value.

00:46:18:00 - 00:46:25:08
Christian Soschner
This will get funded. If not, you move forward. That's like salary.

00:46:25:10 - 00:46:44:13
Shlomo Noy
When you have a lot of players in. We talking about governments now? We have to because we have the tech transfer offices. We have, of course, the researchers without people like the researchers, nothing would work anyway. Think it's a system, when governments would come to you, let's say, like, for example, European Union and say, okay, what is your advice to us?

00:46:44:13 - 00:46:52:01
Shlomo Noy
How should we, deal with the researchers? What would the advice be that you give them?

00:46:52:03 - 00:46:52:19
Christian Soschner
Researcher

00:46:52:19 - 00:47:06:24
Christian Soschner
in general of, very hard to manage because they, and rightfully so. And it's good because researcher in general of the experience.

00:47:06:24 - 00:47:09:17
Christian Soschner
For example, we never we

00:47:09:17 - 00:47:25:19
Christian Soschner
never thought or we never forced anyone to do research on whatever he likes. If he has grants, he can research whatever he likes, even if it's not applicable. There are free spirit.

00:47:25:21 - 00:47:56:14
Christian Soschner
So the main idea about them is a system of incentive and balances. Because why? Why do I mention? Because on the other hand, you don't want them to leave where they are best and and starting to to, to allocate 100% of their time into the new venture which they are active in. It's their baby, so to speak. No, we need professional to do it.

00:47:56:14 - 00:48:36:01
Christian Soschner
We need to, improvise on this. But please keep on what you are good at. What he said and the balances and the incentives. This is the main issue. If you create an incentive and balances the, that's the first step. Second step is to create an envelope, so to speak, that basically makes his life easier. You are taking care of all the things that he does not like Paytm Nagar, Finance Capital raise.

00:48:36:06 - 00:49:10:01
Christian Soschner
And so on and so forth to make his life comfortable. But still his apartment. You will get money when it comes is success. And thirdly, you. You convince him together with him, together with him and the institution, the integration is the best optimal means because when you will come and the venture capital will start play, you don't know the rules of the game.

00:49:10:03 - 00:49:48:14
Christian Soschner
You will end up with 0.00002 with us as a big organization, professional organization, you are protected. So I would say that this is and another highly important thing is some government money, which is high risk money for early stages. Encourage the early stage in even even a small subsidiary not big money. Give every every year make a competition in the hospital on of 5 to 10 grants of 15,000.

00:49:48:14 - 00:50:11:03
Christian Soschner
In which everything. It's easy you don't have to pay for it. One pager, one pager competition. You get 15,000 for early early stage and and this also in a way basically stimulate the wheels.

00:50:11:06 - 00:50:54:05
Shlomo Noy
When I look, at Europe, the Mediterranean Sea, also to regions around the Mediterranean Sea, there are a lot has evolved in the last decades, in the early stages. So early stage funding, early stage grants. And from my experience, which is now 18 years in life science, when ever I look at the later stages, series A, series B, series C, I perceive that this region, if we talk about Europe, down from the United Kingdom, from Scandinavia, Israel, and also northern Africa, is very good at the early stages in funding, but can the late stages.

00:50:54:07 - 00:51:06:11
Shlomo Noy
So there is a lack of venture capital, in my opinion. And as a result, like this, for example, you mentioned it sold to Google for 23 billion. It's good. But Google is an American company and the companies go to the United States.

00:51:06:13 - 00:51:09:11
Christian Soschner
And you decide to pay cyber.

00:51:09:13 - 00:51:33:09
Shlomo Noy
Cybersecurity. It's defense tech, which, usually is not. Yeah, it's very interesting to see that going to another to another nation. But I think that the reason for that is there is no funding in Europe for that. And also when you look at Southeast Asia and China, they are also very attractive because they later stage funding.

00:51:33:11 - 00:51:48:14
Shlomo Noy
My question to you is, is this just my picture or, do you did you make similar experiences, when we talk about funding or do you think it's we have enough funding in Europe in all stages. It's just the companies are not good enough to get funding.

00:51:48:16 - 00:51:49:08
Christian Soschner
I think that

00:51:49:08 - 00:52:37:10
Christian Soschner
Europe is undergoing a significant major, and change in the last 15 years. I think that I think that smartly, wisely horizon program, like horizon program. Excellent. Excellent stimulation to European and companies. I mean, I think according to my fund I obtained by a European biotech with I just was in San Sebastian and in Barcelona for the biotech, with the antiviral and Dubai or Europe and I, I can see the that changing the last 15 years horizon maybe a huge, huge excellent environment.

00:52:37:12 - 00:53:08:15
Christian Soschner
We come to the biotech Europe and you see hundreds, hundreds of company which was not the case earlier. So you see lots of companies. You see lots of professional think I think this is X now talking about private money. It's different. But also in the lab if you look at the last thing is the Chinese in venture capital in Europe, which was not the case before in France, in the Netherlands, in Scandinavia.

00:53:08:17 - 00:53:38:11
Christian Soschner
Big change. You see Nasdaq Nordic in Stockholm, okay. It will go up because the traffic is not that much. But it's a big change to a Nasdaq in in Stockholm. And all this shows that here we come to the data in 2023. It was the first year, the first year that you had more startups

00:53:38:11 - 00:53:41:03
Christian Soschner
in Europe than in the US.

00:53:41:05 - 00:53:45:10
Christian Soschner
Really, it was never before. 23

00:53:45:10 - 00:54:10:13
Christian Soschner
was the first year with more startup in Europe than in the U.S., and this illustrates the big change. Government in Europe, in my opinion, should be a player because early stage, high risk money is always government relative. And by the way, even the American, which are not so much, you know, socialist

00:54:10:13 - 00:54:14:20
Christian Soschner
then and all the time think saying this

00:54:14:20 - 00:54:24:17
Christian Soschner
government, less government, less government, even then they have they have excellent program federal program for early stage.

00:54:24:19 - 00:54:51:18
Christian Soschner
So I think that Europe is moving in the right direction. Much more money, much more venture capital, as opposed to and many, many more biotech and medtech startup, much more than any of, you you go to all these forums and you see excellent company, high quality company, big change.

00:54:51:21 - 00:55:01:14
Shlomo Noy
What's what's the challenge that we should focus on now in the coming five years, to improve the situation even further in Europe?

00:55:01:16 - 00:55:01:22
Christian Soschner
I

00:55:01:22 - 00:55:46:16
Christian Soschner
think the challenge for Europe is, take advantage of the EU. Now, the EU is a big advantage, you know, regulation, EMA is a very smart move that was done 25 years ago. So it's excellent, but I think that it should be more European. And you also see now I met few companies in in in the bio in bio equity and it's starting to be and that's the challenge how to integrate a Spanish company with a French company and with a Swiss company.

00:55:46:18 - 00:56:17:21
Christian Soschner
So I can do multi sides in five countries or the EU and submit all the five countries, all the five side to EMA. So I think that if Europe can be go further and not be a Spanish company only or a Swiss company only, but integrated, this is, this will make it the US because then I call it my interpretation of resources.

00:56:17:23 - 00:56:46:21
Christian Soschner
This guy in Switzerland and they start to believe this guy in Switzerland is excellent in discipline. A and the other guy in France is in. And so if you can integrate them, I think that's a big challenge now that the money is central, the regulation is simple. And if the companies will be starting to be European in the sense of multi countries, and it's already started, in my opinion that's a big challenge.

00:56:46:23 - 00:57:06:19
Shlomo Noy
There are good points. I totally agree. We have to think European as a continent to be able to compete on a global scale with the United States and also with Southeast Asia, which is made with maturity. China, basically. But later to that, when we talk about your fund, before we dive into your fund, let's, let's talk a little bit about drug development and biotech.

00:57:06:21 - 00:57:28:17
Shlomo Noy
So my background in biotech and drug development is, dating back to, Genentech. What I've read, the first biotech company, in my opinion, that was financed, within a modern model with venture capitalists, providing the seed funding, in a staged approach, first hundred thousand, then a few million commits to an IPO and later, I think, integrated into rush.

00:57:28:19 - 00:57:32:03
Shlomo Noy
And this laid the groundwork for the whole sector.

00:57:33:06 - 00:57:57:04
Shlomo Noy
I started in Life science biotech with Novartis. Been out in 2006. It was the department of Nobel who later founded Crispr Therapeutics with Emmanuelle Charpentier. And we got financed, with venture capital money, €40 million in 2006, which was very unique from that size in that day and age, because there were not so much funds. And, I think Europe was mostly empty, except Switzerland.

00:57:57:06 - 00:58:24:07
Shlomo Noy
The first business plan that I calculated, had the number we need 1 billion to bring a drug to the market. So we calculated from the beginning, it was, a little bit, late preclinical development up to how much money would we need to, get it approved by the by the EMA, or FDA in the United States, the latest number that I heard before the pandemic was around 3 billion.

00:58:24:07 - 00:58:47:04
Shlomo Noy
In the pandemic, the number grew to 4 to 5 billion. So the cost, exploded, over the years. And my question to you now is, in your opinion, these days, in 2024, in the coming years, what are the biggest challenges that you see in drug development and therapeutics that we need to tackle?

00:58:47:06 - 00:58:48:05
Christian Soschner
I

00:58:48:05 - 00:59:27:20
Christian Soschner
think that one major change happening now still still, we have to see if it will be validated and be practical as they claim. And this is all the drug discovery platforms. If the companies that are now in the market and others in the pipeline, which basically claim that they can do the selection process of it, so to speak, blockbuster drug in the future much more efficiently than before, especially because of databases.

00:59:27:20 - 01:00:04:00
Christian Soschner
And I and to predict that, compound number 6 to 3 would be the winner as opposed to what we do now. We go now we take all of them, or we do in vitro. Then we do, then we do animals. Preclinical. Then we go to phase one and all that they claim. Then they will be able to do this selection process much more efficient.

01:00:04:02 - 01:00:05:10
Christian Soschner
Yet

01:00:05:10 - 01:00:10:23
Christian Soschner
remains to be seen. But it if, if, if, if

01:00:10:23 - 01:00:38:12
Christian Soschner
the claim is right, this will be a significant change in the industry. It will lower. It will lower significantly the development prices, the development cost of a drug until it reaches the market or to 2 billion, or what it is will reduce it significantly. I think this is one of the future trends that one has to land.

01:00:38:12 - 01:01:09:02
Christian Soschner
That is industry has to, you know, pay attention to it and to see if it works. I have seen a few of them in the last two years. Some of them are impressive. And, and it's it will be interesting to see what is the future of this platform or this drug discovery and better selection. I think this is one thing that is highly important.

01:01:09:04 - 01:01:37:01
Christian Soschner
I think the other thing is that, in I think that recruitment of patients will become challenging much more than, you know, I, I see a challenge, for example, now in the States, first corner, first corner. It's harder and harder to compete. And because the stuff the hospital don't have the attention, don't have the willingness and the passion to do it in Europe.

01:01:37:03 - 01:01:43:00
Christian Soschner
So I understand it's less of a problem, but recruitment in general

01:01:43:00 - 01:01:46:24
Christian Soschner
becomes an issue.

01:01:47:01 - 01:01:49:10
Shlomo Noy
Why is that an issue.

01:01:50:05 - 01:01:53:10
Shlomo Noy
Why is recruitment such an issue?

01:01:53:10 - 01:02:25:20
Christian Soschner
Because first of all, I think it's this theology of the patient. Many of them don't like to be involved in study unless you are a very severe patient in oncology, and you understand that this is the only chance. But if you, I don't know, diabetic or coronary disease or something like that. Not necessarily. You want to really go to the staff is less paid for it.

01:02:25:22 - 01:03:01:00
Christian Soschner
Staff is less attention to, has less attention because they want to do the job and go home. And many, many companies will tell you that. And recruitment became an issue in North America. And, there's also all this social media, especially after the vaccination, the people are, influenced by social media, which they think, don't be a guinea pig.

01:03:01:02 - 01:03:14:24
Christian Soschner
Say no to being. Yeah. It's basically about psychology and sociology of the patient. But it's there.

01:03:15:02 - 01:03:41:08
Shlomo Noy
Yeah. That's probably a point to a point. So the you thought you were talking at the beginning. When we go back a little bit about artificial intelligence interact discovery. Yeah. So that the basic idea is, invent molecules, just simplify to get to invent products with artificial intelligence, throw them onto targets and, simulate the, the outcome of, of preclinical studies.

01:03:41:08 - 01:03:41:13
Shlomo Noy
And

01:03:41:13 - 01:04:08:15
Shlomo Noy
we take the best molecules and progressed them through the clinics and we increase the success rate. So this is the basic understanding. Yeah, much cheaper, much faster, better improve the process cuts out cost. But my let me be a critical friend. My counter argument always in this area. But pre-clinical development is basically cheap. So I mean, it's not the most, cost intensive area of, of development.

01:04:08:15 - 01:04:34:03
Shlomo Noy
It's more in the clinics. And of course, when you improve the molecule and, you have a bad outcome, which stands for bad outcome. But the thing is, all this artificial intelligence, as far as I understand, this, needs existing data. So basically, you work with existing targets, and they can't make up targets. My question to you with your medical background is, what about the disease and the biology?

01:04:34:03 - 01:04:54:23
Shlomo Noy
Do we understand the progression of diseases well enough yet, or do we also have problems on this side? To me, it always feels okay. I mean, when you don't understand the progression of diseases, you don't have a whole lot of data around that. And from a new molecules on existing targets, probably you don't change anything. I mean, you just repeat with different molecules, the same mistakes.

01:04:54:23 - 01:05:04:06
Shlomo Noy
What about, the data and the biology? Is there also something that we can improve that would, improve the outcome overall?

01:05:04:08 - 01:05:04:12
Christian Soschner
I

01:05:04:12 - 01:05:32:18
Christian Soschner
think that you are very right. And that's why I said in the beginning, there's a lot of potential, but there's also lots of skepticism and, and questions like those that you raised, about the about the validation about whether it really, really work or is it like any other buzz that we had? I mean, we could talk now for hours about digital methods.

01:05:32:20 - 01:05:58:10
Christian Soschner
5 or 6 years ago, you would say digital medicine. It was a piece of cake to raise money as an investor. Now, you would say digital medicine, digital health. Very, very, very few. And we invest in digital health. So in medicine also we have our fashion and friends. And I is now, you know, the past the demand.

01:05:58:12 - 01:06:27:20
Christian Soschner
But I think, yes, this is this is of course an interesting question. And especially in oncology, we really don't understand fully the diseases. We don't understand the gaps. We are understanding it better, better. But still, the more you understand. And here comes new targets. I don't know typically how to think about this. Here it comes. The it's dynamic.

01:06:27:22 - 01:06:42:12
Christian Soschner
It's very changing. I don't think that in the next five years, someone will be able to match the database on the AI side and drug selection with the mechanism of biology. Be.

01:06:42:13 - 01:06:44:06
Shlomo Noy
Don't you don't think so?

01:06:44:08 - 01:07:13:01
Christian Soschner
No. It will take more time to, to do an optimal matching. You will still, as you said, waste time and effort on on on on things. You know, all things. We didn't find the we now, it's a continuous effort. I, if it will work, then biology will be changed as well. But it's a good question. I mean, it's it's interesting.

01:07:13:01 - 01:07:30:24
Christian Soschner
It's interesting and phenomena. I hope it will work because it will bring to the market many more bugs today because the barrier will be lowered. But. I don't know.

01:07:30:24 - 01:07:53:06
Shlomo Noy
Which means at the end of the day, that there is still opportunity in drug development for investors. So it's, not everything is solved in that area. So we have still a lot of technology and a lot of open questions to work on. And we are not in this one interpretation, but also be okay. The cost go up because we have all possible drugs already on the market.

01:07:53:06 - 01:08:01:07
Shlomo Noy
The best version of them. And anything that comes now is worse. So there is still enough room for potential.

01:08:01:10 - 01:08:12:09
Christian Soschner
There's a lot of room for potential. And that's why the industry, by the way, in numbers, is going, the industry is going annually,

01:08:12:09 - 01:08:33:10
Christian Soschner
even if we thought it would with the pandemic, more and more it is invested. And although you see, for example, in the IPO market, in publicly traded companies, you see this all I know, this little that here it comes in here for nine months.

01:08:33:10 - 01:08:55:03
Christian Soschner
There's no investment no IPO. And suddenly boom and sudden it going again. Again. But if you look at the graph over the years more money is invested in biotech and method in life. Some all in all. So there is opportunity. Otherwise they wouldn't come more money.

01:08:55:03 - 01:09:01:13
Shlomo Noy
Those is good for investors basically. Let me ask you two questions before we move to China and your fund.

01:09:02:17 - 01:09:35:06
Shlomo Noy
The first question is about mistakes for biotech entrepreneurs. I think biotech entrepreneurs have the downsides that they come out of the scientific world, are pushed into entrepreneurship with zero education, and have to learn everything from scratch to make their journey a bit easier. My question to you is, what are the three biggest mistakes that you saw in the biotech fields that new entrepreneurs should avoid to accelerate their development speed?

01:09:35:08 - 01:09:35:13
Christian Soschner
I

01:09:35:13 - 01:10:02:02
Christian Soschner
think that the first the first mistake is not knowing your limitations. I am a good researcher, but I am not the fewer, which are also excellent beneficial, but the majority, excellent researcher and not so much excellent managers. So the first thing is, is not to know all my mistakes and to think that I can do everything.

01:10:02:02 - 01:10:39:09
Christian Soschner
No, you cannot do everything you do what? You are very good. The second thing is, is not to do mistakes in the in the early stages of structuring the company well, just actually a very carefully vis-a-vis, for example, Texas highly important piece of the team members, part time, not part time. Who who is contributing? How do you how do you benefit team and so on.

01:10:39:11 - 01:10:48:12
Christian Soschner
Like the structure and incentives is highly important. And the third one is, of course, the people you choose, the people themselves choose good people

01:10:48:12 - 01:11:03:19
Christian Soschner
don't do mistakes. Not that's true. Oh, this is the. So I think this is the the three main elements highly important for a new entrepreneur.

01:11:03:21 - 01:11:24:09
Shlomo Noy
That's true. I couldn't agree more. And connected to this question is that in the last 18 years, I perceived two approaches in the biotech industry. So one is very technology centric. It's a gene says, okay, we have a technology, we advance it no matter what. And, full force ahead. It will work at the end of the day.

01:11:24:11 - 01:11:46:04
Shlomo Noy
Exaggerated, of course. And the second one is coming more from the market side. So I say, okay, we understand the market, we understand the patient, we understand the biology. We put together a world class team to tackle a problem on the market, and then we license any technology we can find and just move it forward. And we are much better in selecting that.

01:11:46:06 - 01:11:57:11
Shlomo Noy
In your opinion, with your experience in tech transfer, in investing in the medical field, what are the advantages and disadvantages of these two approaches?

01:11:57:13 - 01:11:57:18
Christian Soschner
I

01:11:57:18 - 01:12:22:18
Christian Soschner
think that like any other elements of life, is what we call dose dependent. No overdose of one of the two poles. If you mention you have all the side effects in the world. Taking the analogy from the medical field and I think it should be those

01:12:22:18 - 01:12:26:19
Christian Soschner
related. Don't take it here over those, don't take it here over.

01:12:26:19 - 01:12:57:00
Christian Soschner
The technology is highly important in the first stages. But a very, very early stage. You have to see the match with the business side. And that's where we started the conversation. The thing of multidisciplinary, of interfacing between the technologists and the business, you have to start and it's it it's the milestones related. In the beginning, you have to focus on the technology.

01:12:57:02 - 01:13:34:24
Christian Soschner
But very soon you have to see the match with business. And if there's no match, don't hesitate to drop topic. But if there's a match, then start to do both dosages on the business and technology, integrating them together. But if there is no match, you should think about even which I recommend to young people which come to me sometime live in your waste of time and energy and money in the next 2 to 3 years and come to the point as of today.

01:13:34:24 - 01:13:47:10
Christian Soschner
So I think that it's, you know, step related and it's, matching between the two poles.

01:13:47:14 - 01:14:31:07
Shlomo Noy
Charlie Munger in his book, with Charlie's Almanac, which is a collection of, his speech, he said, that's the problem in business very often is social proof that, people seek people who are like, they are them selves. So it's pretty much the same. And this, this, this, this point in his speech made me think about what I saw very often in life science and biotech that basically, researchers tend to hire researchers, whereas when, repeat what you said before, they should start thinking multidisciplinary and to say, okay, let's match the technology with the business side and let's find someone from the business side.

01:14:31:09 - 01:14:55:08
Shlomo Noy
My question to you is how can they overcome this hurdle? I mean, it means basically for them stepping out of their comfort zone and starting to look for people who are not like they are. But what's your advice to to a CEO of a biotech firm? Former researchers, as okay, I want to go on the journey. How should I do that?

01:14:55:08 - 01:15:31:19
Christian Soschner
It's it's very challenging. The real challenge, I think that there is a clear selection, a Darwinism, so to speak, of this CEO. I think that those that cannot integrate with others discipline will eventually not start with being a CEO. It's like Darwinism. I think that those that will say, listen, I am an open now, I'm a CEO, I'm doing it all the way.

01:15:31:21 - 01:16:03:16
Christian Soschner
They have a different DNA. They will be more open to integrate with other people, which are not exception. And I think that, these are people that can be convinced and eventually, if they are, you know, if they are open enough, they see often very short time that they are not able to move forward. They're not able to move forward without the help of discipline X or Y.

01:16:03:18 - 01:16:28:07
Christian Soschner
And I think this is the major force, the fact that they face the wall and cannot move if they hit the wall, unfortunately, there will be no company. But this they hit the wall and understand that this is the best lesson. Then they would be open to other discipline.

01:16:28:09 - 01:16:46:10
Shlomo Noy
And you can you it. From my experience with tech transfer, do you think it's possible to change the DNA? I mean, that someone, who is closed up to other discipline and says, okay, I want to stay in my fields to just, flip them to the other side and say, okay, now you are multidisciplinary. Is that possible to to change psychology?

01:16:46:11 - 01:16:47:00
Christian Soschner
In

01:16:47:00 - 01:16:54:21
Christian Soschner
my experience, is that with the right incentives. I can send it and I balance this

01:16:54:21 - 01:17:07:04
Christian Soschner
and the vision and the dream. It is possible, it is possible to change. I mean he will not be another man. But in this regard it can be

01:17:07:04 - 01:17:09:10
Christian Soschner
changed. Yes.

01:17:09:12 - 01:17:22:15
Shlomo Noy
It's like but this means actually to, to teach people to start embracing different disciplines outside basic research.

01:17:22:17 - 01:17:40:07
Christian Soschner
Many of them at this stage of their life, ready and open to accept this. They are not, you know, blinded. They understand life usually when they are at this stage, this much.

01:17:40:09 - 01:17:43:01
Shlomo Noy
So it is basically an advantage.

01:17:43:03 - 01:17:47:02
Christian Soschner
And to a certain degree.

01:17:47:04 - 01:17:50:18
Christian Soschner
It becomes disadvantage.

01:17:50:20 - 01:18:12:11
Shlomo Noy
Eye contact now use as a hook point to go to China because how should I? China is an old country. So it is. I think it's one of the oldest cultures, cultural regions in the world. Pretty much similar to Israel, if I just think about it, it is also a very, very long tradition and long history.

01:18:12:13 - 01:18:30:05
Shlomo Noy
I think you can also trace it back for 5000 years. When we look at China. Now, my question to you is the first question, why is China a big significant opportunity for European biotech companies, in your opinion?

01:18:30:07 - 01:18:30:22
Christian Soschner
I think,

01:18:30:22 - 01:18:53:08
Christian Soschner
for two main reasons. If you look, if you look at, one parameter, highly important in my opinion, and that's the health care expenditures, as part of the GDP, you see that the US is the big market. I'm talking about the big game on the US is something like 18, 19% out of GDP. It's insane.

01:18:53:11 - 01:19:32:16
Christian Soschner
It cannot grow anymore. And doesn't matter who would be the president. To come, you will have to cut healthcare expenditure as part of the GDP. Otherwise there would be no economy. Europe is Europe. It's not growing. It's not growing. It is in the same numbers. For many years, China, on the other hand, is, allocating only five, 5.2% of GDP, so has expanded.

01:19:32:18 - 01:19:48:07
Christian Soschner
This is a very low number, very low number that the central government declared healthcare services as part of the three main objectives of the of the country.

01:19:48:07 - 01:19:52:00
Christian Soschner
So what is the objective? The objective is the

01:19:52:00 - 01:20:17:20
Christian Soschner
average of the OECD countries, the average over the US. The country is around 9% 99.1 and so on. Healthcare expenditure is public. Now, if you think about moving in the next five, seven, eight years from 5% to 9%, it's radiance and trillions and trillions of dollars.

01:20:17:22 - 01:20:49:23
Christian Soschner
And this and that's a big market. It's not I don't know. It's not these right. 10 million people. It's a big market. The big market ready for innovation and and changing dramatically, changing dramatically. I'll give you another number in China this NHS national health system like in the in Europe, in many countries which is fairly good. It covers hospital.

01:20:49:23 - 01:21:33:17
Christian Soschner
It covers medication. It's good user charges and so on. But this middle class of 400,000,350 or 400 middle class, which have a second layer, a second layer of private health insurance. Now, if you think about this, it's 400 million, which is larger than the whole population of you. But with a second layer of private health insurance. This is a big model, and I can afford new technologies because the second layer is for new technology mainly, and

01:21:33:17 - 01:21:39:21
Christian Soschner
because the first layer covers, if I have me, I don't know, pneumonia.

01:21:39:23 - 01:21:42:08
Christian Soschner
So this is a this is again

01:21:42:08 - 01:22:15:15
Christian Soschner
on the market side. And that's why you should go to China and do clinical activities in China, because then you can, you can go and get an nmpa the Chinese FDA approval, and you can be a player. And I think that any big pharma cannot ignore the Chinese market if they want to grow, because us will not grow.

01:22:15:17 - 01:22:46:09
Christian Soschner
I think that's my estimation. And and Europe is putting whatever they can and managing it smartly. They manage it very smart. It's and they do cost containment, which is wise. So I think that it's, highly important to go to China. Another issue, which we talked earlier, is the recruitment.

01:22:46:11 - 01:23:19:15
Christian Soschner
The structure of the healthcare services in China is very favorable for clinical ties, in the sense that there is no community services as opposed to Israel or to Germany or something where you have good community services. Granted custody. Let me and all that. In China, only 6 or 7% out of the doctors are family physician. So everything is hospital only.

01:23:19:16 - 01:23:53:18
Christian Soschner
And that that's the structure. You have a flow. You go to the, and you stay there for many hours because the other. But if you talk about recruitment, the structure is ophthalmology hospital, women, children, hospital and so on and so forth. So it's it's very concentrated, hospital oriented and also not only acute care, outpatient visits, recruitment of patients.

01:23:53:20 - 01:24:35:10
Christian Soschner
Every big third, third level hospital is a huge catchment area of millions of population. And the number, significant. There are thousands thousand of outpatient visits daily, daily in this third level hospital. And many of them, many of them, highly educated, top, top board-certified, some Ivy League hospitals in the state coming back to China because of incentives.

01:24:35:12 - 01:25:21:04
Christian Soschner
So the system is favorable for clinical trials. And if you take an example, okay, you need now 100 patients for phase two start. Okay. You can do 35. Because if you do more than, you know 32 types and FDA will not acknowledge it. But if you do 30, 35 in China and 65 in the US or Europe, eventually the aggregate 100 patient you can submit, you can submit to two regulatory agencies in parallel big than bigger than.

01:25:21:06 - 01:25:52:05
Christian Soschner
Because then you create value, which is unbelievable. With the same study. With the same study you can submit to two regulatory agencies. This is the asset. This is your asset. The data, the value creation and the and the ability to submit to two regulatory agencies in parallel on the same multiple.

01:25:52:07 - 01:25:59:09
Christian Soschner
And this is why I think European and European companies should go to China.

01:25:59:12 - 01:26:10:24
Shlomo Noy
It's this is this, you know, standard last point, right, that the data generated in China clinical trials are fully accepted in Europe and the United States.

01:26:11:01 - 01:26:18:22
Christian Soschner
Yeah. In the federal hospital, it depends on the hospital and or the by. But yes, it is it is.

01:26:18:24 - 01:26:44:07
Shlomo Noy
So basically doing a phase 1 or 2 study. So the first phase two study or the phase one study, you can pretty much take the data from any Chinese, study center when it's accepted and in your condition, and also address the FDA and the EMA when you get efficacy and safety data out of these studies, and they will use this data and not demand automatically.

01:26:44:07 - 01:26:50:18
Shlomo Noy
Okay. It's not data from the United States or from Europe. So you have to redo the study in our region.

01:26:50:20 - 01:27:21:08
Christian Soschner
No. As long and now I'm talking about a very general, cutoff point, but usually it should not be, more than 30% Asian origin patient. It cannot be, you know, 60% Chinese and 40% the American. It should be up to 30%. And then and then the FDA will acknowledge.

01:27:21:10 - 01:27:43:13
Shlomo Noy
I mean, the the thing is, especially in, in rare diseases, I mean, you mentioned stats, in China, you have this huge sites, you have this huge hospitals and this huge regions where the the challenges and the chances and the probability of finding enough patients for this study are just higher than in Europe. Europe is very fragmented.

01:27:43:15 - 01:28:06:23
Shlomo Noy
China has I mean, it was 2014. It was a trip to China, to the sharing implant. We did some sightseeing and, someone asked the bus driver if, he can name all cities with more than a million inhabitants in China. And he started laughing. And, when we asked why, why? Why do you laugh? And he said, there are just too many cities.

01:28:06:23 - 01:28:19:14
Shlomo Noy
So let's talk about those with more than 15 million inhabitants. I can name that. But the 1 million cities. And for Europe, a city with more than 1 million inhabitants is huge for China, it's normal.

01:28:19:17 - 01:28:52:19
Christian Soschner
Exactly, exactly. For example, the Women and Children Hospital in Guangzhou, where we work, has something like 20,000 I of patients visit, and they know the majority of them. Yes, the majority of them are pregnancy monitoring, which is semi-automatic process, you know, blood pressure, blood. But but still, this is the numbers. Oncology hospital, ophthalmology hospital. Huge numbers.

01:28:52:21 - 01:29:32:11
Christian Soschner
The ophthalmology hospital in in Guangzhou, it makes between 60 to 70,000 Catholic operation yearly in one floor. There are floors for 18 floors for cornea, cataract research. And so yes, it's it's huge numbers and it's, it's very efficient, by the way. And that's what I mean by structure. If you want to do a study in Europe, some of the patient according to the structure will never reach the hospital because it is solved

01:29:32:11 - 01:29:36:02
Christian Soschner
at the community level.

01:29:36:04 - 01:29:39:24
Christian Soschner
Yeah. Here's the implementation.

01:29:39:24 - 01:29:47:00
Christian Soschner
There is almost no community service. Everything is hospital.

01:29:47:02 - 01:30:27:16
Shlomo Noy
And they are very modern. The logistics is, just solved. This is, high tech, a lot of digital in the hospitals already ten, already ten years ago. Now it's, must be even more advanced. So did the when I summed up what you said in the last minutes is one advantage in China is that the government has in the current five year plan that they want to double the healthcare expenses, basically from around 5% to roughly 9%, which is roughly doubling you know, it's not 100% correct, but there is a lot of more money flowing into the system from the government.

01:30:27:18 - 01:30:27:24
Christian Soschner
Yeah.

01:30:28:04 - 01:31:00:22
Shlomo Noy
On the other hand, you pointed out that also the new Chinese middle class that's developed in the last 30 years have almost all private insurance, which is another layer which, puts also more capital into healthcare, which is very attractive for every company in the world to address this market, because it's, two forces playing in the same direction, which, then in the future will have a huge need for better therapies, for better digital health solutions, for better medical devices.

01:31:01:03 - 01:31:25:07
Shlomo Noy
And they can pay for it. On the other hand, you mentioned that one advantage for biotech companies are these huge study sites, these huge, regions that are well organized that see a lot of patients. You mentioned that, for example, in women's health and in labor, you mentioned your hospital that you work with, with 20,000 visits per day.

01:31:25:09 - 01:31:35:19
Shlomo Noy
These are 20,000 per day potential patients that, show up and could be addressed for participating in clinical trials.

01:31:35:21 - 01:31:36:24
Christian Soschner
Okay. Yeah. Yeah,

01:31:36:24 - 01:32:00:14
Christian Soschner
that's that's the advantage. And of course, also clinical trials, the same protocol will be cheaper in China. As a rule of thumb, we estimate that the the complete crowd will be less, with 35% than the cost in the U.S for the same part of.

01:32:00:16 - 01:32:04:07
Shlomo Noy
35% less.

01:32:04:09 - 01:32:16:19
Christian Soschner
Because of labor costs than because of doctors and because of lab, and because the MRI is less expensive, the. Than the than the US.

01:32:16:21 - 01:32:17:06
Shlomo Noy
So

01:32:17:06 - 01:32:28:22
Shlomo Noy
it was basically makes sense to I mean. So it would make sense to do every phase one study there at the end of the day and every face to study the data in the data is.

01:32:28:24 - 01:32:37:10
Christian Soschner
Not only not political in ethnicity while blockade the approval by the regulatory agent.

01:32:37:10 - 01:32:43:12
Shlomo Noy
But but but but but, sorry to interrupt you, but, for my understanding.

01:32:43:14 - 01:32:45:14
Christian Soschner
Yeah.

01:32:45:16 - 01:33:09:16
Shlomo Noy
I still perceive the Western pharma companies. Maybe it's different with Chinese pharma companies, but they still perceive the Western pharma companies as having a a sweet spot, for purchases, for acquiring assets at around clinical phase two with, safety and efficacy data. Regardless of their ethnicity. So it's just, show me some showed me that it works.

01:33:09:18 - 01:33:40:02
Shlomo Noy
Show me that it's safe. Then, acquire will be sign a license deal and a completes the development. So when I just look at the biotech sector in this early stage developments for the biotechs coming out of universities, research organization, when they hit the end stage and have the need then to conduct clinical trials. I mean, it's cheaper, the data is accepted and they can probably reach, with the same speed, like in Europe or the United States.

01:33:40:04 - 01:33:57:20
Shlomo Noy
This crucial phase two efficacy and safety data point, and then later push all the studies with different ethnicities and region to the later stages, but have the necessary data to initiate negotiations with pharma. Would that be a valid approach in your eyes so they can be something?

01:33:57:22 - 01:33:58:08
Christian Soschner
Yes

01:33:58:08 - 01:34:27:05
Christian Soschner
and yes. But, I would emphasize that the model you describe is very valid, very valid for phase one baseline. No doubt. No question about what you said about phase one. Phase two starts to start to raise some question about the population, the patient population. If I want to move in phase two, basically has to get approved by a regulatory agency.

01:34:27:07 - 01:34:31:00
Christian Soschner
And if you do phase two only in China, it will

01:34:31:00 - 01:34:55:22
Christian Soschner
never be acknowledged. And rightfully so. So it needs to be, as I mentioned in my example, an aggregate of Chinese patient phase two and and us or European phase one. Yes. Phase one. There is no question. Generally speaking, there is no question of at least. But phase two there is a question.

01:34:56:00 - 01:35:17:04
Shlomo Noy
When I come from the market perspective, when I come from my centric financial perspective and say, I have to make sure that I can initiate negotiations with pharma very quickly to see if there is an appetite to justify later studies. After the the, the first phase two data point or first efficacy data point.

01:35:18:19 - 01:35:50:17
Shlomo Noy
How would you set up that with China for a biotech company or says, look, I mean, I have $20 million. I need data. I need data for to convince pharma to enter a license deal with me so that we get enough firepower and fuel, to continue our development. If that fails, the question is, if we provide more money, what's your advice to them when they want to look at the China opportunity?

01:35:50:19 - 01:35:51:01
Christian Soschner
There

01:35:51:01 - 01:36:15:20
Christian Soschner
is no chance to go to China without the local and without the local partners. You cannot. You are the company you describe will never be able to do anything in China. You need the Chinese. Otherwise doesn't work. Now, what are your option? One option is a distributor. But then. Then all the value creation is not your.

01:36:15:22 - 01:36:44:00
Christian Soschner
It's his name. He will get the assignment from the NBA and not the company. So some decides to go this way and said, listen, you give us side the potential of the Chinese market, but I want to be the. So here I out licensee to the distributor, invest the money in the clinical trials. He does it but he will get also the nmpa approval.

01:36:44:02 - 01:37:14:04
Christian Soschner
The asset will be his. He will pay me royalties from option one. Option two is a V with a Chinese partner, which usually he is the majority when he's the majority in some point of time. Many of the Western companies are afraid to lose control, to lose the data to lose, and they're afraid to be partner with the Chinese that has the majority.

01:37:14:06 - 01:37:50:16
Christian Soschner
Our fund, model is totally different. We, the Chinese partner we are. The fund is the Chinese parliament. We finance, we create the JV. But here is the big difference here is the Big Dipper. The big difference is that you, the European company, you are the majority. We, the Chinese, give a the JV, the VC, we are the minority in the Chinese JVM.

01:37:50:18 - 01:38:32:05
Christian Soschner
It has major implications. First of all, you, the parent company, the open government. You want to show we help you. We we invest the money in the JV. We help you to recruit the clinical director to do the studies. We have ten full time is on the ground. We help you in the process that I would describe shortly, but you are, the majority, which means all value creation can be consolidated to the parent European company, which means value creation also to the parent company, to the medical.

01:38:32:07 - 01:38:48:21
Christian Soschner
It's a big difference. Huge difference to the two models that I described earlier, because this model maximizes the potential trademark. And that's the big difference.

01:38:48:24 - 01:39:19:14
Shlomo Noy
So when we summarize it's the. So the basic needs is that European companies cannot enter the Chinese market alone. So they need a partner in China to move forward. Which is also smart to, I mean, in other regions of the world. You mentioned three options, two to these partnerships. One is, distributor collaborator who basically license the technology and starts the development by themselves and has full control over the development.

01:39:19:14 - 01:39:42:07
Shlomo Noy
But the owner of, the original technology and data loses the control, and he hands basically everything over, which is, I think, a valid model for everybody who says, okay, look, I mean, my my team has moved on. I don't have a team, I have patterns, I have data, it looks promising, but, it's not on my strategic landscape anymore, and they can't move it forward to you want it and develop it for China.

01:39:42:09 - 01:40:08:08
Shlomo Noy
The second model you mentioned is a Chevy, and the majority of the tribes in China is basically, under Chinese control. So you license the technology and they do the development. You have higher percentage, higher stake in the in the total endeavor. You need to invest money, but it's not under your control, which I don't think for the, the first tier of technology is in first year of companies.

01:40:08:08 - 01:40:29:17
Shlomo Noy
It's it's out of question. They want to keep control when they say it's a promising technology, but wants to harness the advantages of China, want to be ready for the Chinese market, wants to have, fast clinical trials and use the data also for registration in Europe and, and later in the United States. And this is where your model comes into place.

01:40:29:17 - 01:40:44:09
Christian Soschner
Exactly, exactly. Now, one exception is that, the, the big Pharma, the big Pharma, Pfizer and Novartis and all that. They have Chinese subsidiaries, 100% owned

01:40:44:09 - 01:40:50:21
Christian Soschner
by the by the pharma company. So they are working in a different model because they are very, very big.

01:40:50:21 - 01:41:02:11
Christian Soschner
But, we are talking to we are talking about a company that has, I don't know, one compound, another three compounds in the pipeline, you know, wants to go to China.

01:41:02:13 - 01:41:12:22
Christian Soschner
They have 30, 40,000,010 employees that, that's the model we are working. The big ones know how to play in

01:41:12:22 - 01:41:18:06
Christian Soschner
in China. And they, by the way, they do conduct many trials in

01:41:18:06 - 01:41:20:04
Christian Soschner
China. The big ones.

01:41:20:06 - 01:41:47:11
Shlomo Noy
Yeah. I believe you mean when you have enough capital, you can do everything basically, and create your own subsidiary and hire your own people, which is not should not be the job for biotech. So they need a partner, like like you. Can we play the process through how would how would it work with European company? Let's assume that a European company has raised a series B, they have 100 million capital on their bank account, and they have ten compounds that look very promising.

01:41:47:13 - 01:42:09:10
Shlomo Noy
Some are in pre-clinical, some are in phase two in Europe already. And to now here the podcast Inside China. It looks interesting. I mean, we have a lot of ideas, a lot of, potential in the pipeline. We have a lot of, more ideas for several different indications, but it's too costly in Europe, and it's, it's too slow.

01:42:09:10 - 01:42:18:18
Shlomo Noy
Maybe we can work together with you. How about your process with them? Look at assuming that the assets are attractive to you.

01:42:18:21 - 01:42:33:13
Christian Soschner
Okay. We have a very structure. We have a very structured process. Just to mention our first plan. It started eight years ago, was 100 USD and invented, invested in 12 companies in this model.

01:42:33:13 - 01:42:37:07
Christian Soschner
We completed, the first fund and

01:42:37:07 - 01:42:48:23
Christian Soschner
started. And since the, our LP is, so realized that the model works, they invested another 300 million in the second fund.

01:42:49:00 - 01:43:05:13
Christian Soschner
The second fund is now in action, fully in it for almost two years. And it's invest only in pharma, only in therapeutics, not in not in, in in devices. So we have 300 million to invest in this

01:43:05:13 - 01:43:06:10
Christian Soschner
model.

01:43:06:12 - 01:43:08:00
Shlomo Noy
321.

01:43:08:18 - 01:43:15:08
Shlomo Noy
300 million. You have a huge warchest to put to work.

01:43:15:08 - 01:43:49:08
Christian Soschner
And we and we already invested in three companies, and now we are finalizing the first company in the second part. So we have a very structured process of will working. We start with understanding the signs. And then we have analyst, basic science analyst here in Tel Aviv but also in China, two talented genius guys, young guys, they check first of all the signs with it to see whether it, you know, has some question on or not.

01:43:49:10 - 01:44:22:12
Christian Soschner
Second thing, we go into clinical indication they find the right keyword in Quanzhou to discuss the clinical implication. Epidermal epidemiology is might be different in China. But I'll give you an example. Multiple sclerosis I see many and many, you know, potential drugs for multiple sclerosis. But you come to China and the prevalence is very low.

01:44:22:14 - 01:44:28:02
Shlomo Noy
So why why is that?

01:44:28:04 - 01:44:59:15
Christian Soschner
I ask many, many top researcher and no one understand epidemiology wise. They only can state one thing. If you look at the globe was the more north you go, the higher the prevalence. That's all they know that they got the equivalent. You know, a lot about the disease okay. So so the second thing is like we spoke mentioned matching on the clinical need proven epidemiology.

01:44:59:17 - 01:45:26:07
Christian Soschner
So the next thing is that if we think that the science is good, we create a meeting between ourselves, the company, the parent company and the clinical cold, which potentially can be a API. And then we we have 1 or 2 discussions between them. And, and we see whether we have a match on the clinical need.

01:45:26:09 - 01:45:49:06
Christian Soschner
We ask him our Chinese team, we are as I said then full time is on the ground. How the Chinese team is basically arguing with him, whether it has an A clinical relevancy or not. Next move is making an appointment. All these zoom between the company, the parent company, and our regulatory

01:45:49:06 - 01:45:52:16
Christian Soschner
consultant. What are we facing ahead of us?

01:45:52:18 - 01:45:56:00
Christian Soschner
Numbers of patients and all the next move

01:45:56:00 - 01:46:26:21
Christian Soschner
is a CRO. Well we have our CRO that can see the protocol and can start and price the study that we want to do mutually together with the company and now, which is that we need X million. And from this X million we extrapolate our investments. Because the model is that the parent company does not put a penny in the GP.

01:46:26:23 - 01:46:31:17
Christian Soschner
We finance everything that the clinical time.

01:46:31:19 - 01:46:45:22
Shlomo Noy
Can, can, can we stop a little bit here before you continue? Did you understand it right. Creating a chip. We with you means that the parent company, which in our model is, currently a European company.

01:46:45:24 - 01:46:47:08
Christian Soschner
Yeah.

01:46:47:08 - 01:47:23:06
Shlomo Noy
It has all the data, has done all the work up to the point where the license needs to China with you in a new into a new entity. Your fund finance is 100% of the Chinese endeavor. And one of the studies and the European parent company has the maturity of this cherry and only needs to license the data and everything that's necessary to conduct the trials in China into the cherry, but remains in full control of the TV.

01:47:23:08 - 01:47:29:23
Shlomo Noy
Yeah, and in full control of the data. And you provide all the capital.

01:47:29:23 - 01:47:35:22
Christian Soschner
Yes. And to particular team they license set to themselves.

01:47:35:24 - 01:47:39:10
Shlomo Noy
Exactly. And.

01:47:39:12 - 01:47:42:23
Christian Soschner
Because they're majority they control.

01:47:43:00 - 01:47:59:23
Shlomo Noy
So on the trust side it means that you put a lot of trust in the cherry. And if the parent company has a trust issue and says, okay, if anything goes south and we don't know you yet, and a lot can happen, but if anything doesn't work, they can pull out everything.

01:48:00:00 - 01:48:07:06
Christian Soschner
Yeah, it's there's. There are the majority.

01:48:07:08 - 01:48:09:07
Shlomo Noy
Okay.

01:48:09:09 - 01:48:12:18
Christian Soschner
And we did it 15 times.

01:48:12:20 - 01:48:14:24
Shlomo Noy
So you have 15 case studies.

01:48:15:01 - 01:48:18:17
Christian Soschner
12 plus three. And now comes the four.

01:48:18:19 - 01:48:25:13
Shlomo Noy
So anybody interested in your model can also talk to 15 other companies.

01:48:25:15 - 01:48:27:24
Christian Soschner
Yeah I would bother all the 15 but yes.

01:48:28:00 - 01:48:42:18
Shlomo Noy
Yeah. But in principle you have a long days where and say okay call the CEOs, talk to them. They tell you how it works. What's the upside. What's the downside. What's the problems. So there is a lot of social proof.

01:48:42:18 - 01:49:25:10
Christian Soschner
Yeah. And if we continue with the process, then we we understand the numbers. Once our CFO is involved, all of that process is together with the company at this at this stage, we start to dig into the IP arm of the company to see the there's no problem. That's our job. The next move is, which I do in in two weeks from now on August 11th, I go, to China together with the company that we invested in.

01:49:25:10 - 01:49:55:17
Christian Soschner
It's a Swiss company, Basel based, that we invested in this model. And after we did all the process that I told you, we tell them this. Before we start, you go to China to see everything in in your eyes. It's not virtual. You'll come and meet the people. For example, for this company, we are arranging to interview local guy, which will be an employee of the JV.

01:49:55:23 - 01:50:21:08
Christian Soschner
You will be a clinical director is a pity. We know him. He will be the clinical director and he will be responsible for clinical activities. The cool stuff now. So they interview him, they see our people, they meet our team. They go with us to the hospitals to see where it will be conducted. They meet, they meet Chinese FDA people with us.

01:50:21:10 - 01:50:33:24
Christian Soschner
They meet the CFO. So they come for three days where they see everything in life.

01:50:33:24 - 01:50:53:04
Shlomo Noy
And you mentioned, you invest with the parent company in Europe. Do you also take a strategic stake in the parent company? Do you also invest, in your TV model, vice versa, to say, okay, that you, can secure also influence in the decision making to also put money to work in Europe, in the company or.

01:50:53:06 - 01:50:53:15
Christian Soschner
By

01:50:53:15 - 01:51:24:00
Christian Soschner
our guidelines, by our guidelines, we cannot invest in the parent company, but money and we can show it money can go, full what we decide jointly can go up to the parent company for, I don't know, certain. Money can go from China to put it to put it. We think we think of ourselves as part of the global effort because we do 30.

01:51:24:02 - 01:51:54:10
Christian Soschner
You need to raise money for clinical data, right? You raise $100. But if I do 30 patients to 100, you need to raise only 70. So basically we take care of 30 or 35 patient out of the no. 100. And so we are part of the global effort. What we do is two things. We have a conversion formula on day one meaning we don't have equity shows.

01:51:54:10 - 01:52:33:14
Christian Soschner
But if there's an X on the parent company in 30 years from now we are out together with them. So the buyer would have 100% of the JV. And we would be out in a formula that we decide on day one when we invest the money. So instead of having let's say 40% of the JV and the parent company has 60, just for the illustration, we will have 10% on the parent company when they have an exit.

01:52:33:16 - 01:52:55:20
Christian Soschner
And then the buyer will have our 40% in the JV fully. So that's the way we are part of it. And yes, we are part of the slides that you did. So that's the way we see. And that's why our vector of interests are aligned. And that's why we are ready to move money to the parent company.

01:52:55:20 - 01:52:59:03
Christian Soschner
Yes, money moves to the parent company.

01:52:59:05 - 01:53:35:07
Shlomo Noy
So for example, when you consume the resources, during the clinical trial from the parent company, it's like a similarly tech transfer. You make a service agreement and, the tribe pays then for the, general services that are necessary to conduct that thing, to not to drain down sources of the parent company. And you also ensure with the investment contract that when the parent company is acquired by pharma company that the Chinese chives part of the, of the overall deal so that it's not left behind and, the parent company just wanted to acquire that.

01:53:35:11 - 01:53:38:11
Shlomo Noy
Then you stand alone with the TV.

01:53:38:13 - 01:53:46:05
Christian Soschner
We cannot be an obstacle within Tokyo's,

01:53:46:07 - 01:53:53:14
Shlomo Noy
Okay, this makes this makes sense. This makes sense. What are the challenges? I mean, to assume which companies to approach. You assume.

01:53:54:13 - 01:54:17:06
Shlomo Noy
Basically, it's clinical stage companies. Otherwise it wouldn't make sense. And I also assume that, mostly they want to do multicenter studies, across the globe. So with sites in Europe, the United States, and in China to be ready for market entry and have a very nice and sweet deal for big Pharma is okay. We have all the data, we have the approvals from the Chinese government.

01:54:17:08 - 01:54:29:01
Shlomo Noy
We have the approval from the European governments, regulatory authorities and from the US authorities. How what are the challenges with such trials?

01:54:29:01 - 01:54:58:24
Christian Soschner
It's no different from any trials that I know you'll have. If you have a good seal. Basically the company does. It does not like speed. Usually it's a it's a good call that manages everything. It's responsible for it. Okay. So I don't think it's I don't think it's it's a major challenge. If you have a good local clinical director, which we have in China, you supervise, inform your supervising, you talk to him.

01:54:58:24 - 01:55:29:18
Christian Soschner
There's a guy in the company which is responsible for all clinical activities. Yes. You will be supervising him on a daily basis. Contact will will visit China every, I don't know, three months. But the guys there are professional. Many of them are highly experienced from European companies, from U.S. companies came back to China because life is easy there now.

01:55:29:20 - 01:55:32:21
Christian Soschner
They have good salaries.

01:55:32:23 - 01:55:35:05
Shlomo Noy
Chinese cities are more advanced than the European ones.

01:55:35:11 - 01:56:13:09
Christian Soschner
So in certain aspects, yes. And there's also another dependency in China. CDMO your company, early stage you start you need now to manufacture the compound. Excellent. CDMO in China. You can take our money, our investment and use it for CDMO. It's okay with us. Bushy Tiger made many excellent company that can do this. It can do the manufacturing on a very high quality are totally accepted by the regulator.

01:56:14:20 - 01:56:26:24
Shlomo Noy
This is so so you can do the entire manufacturing for a global clinical trial. Yes. In, in China and distributes then the compounds, across the globe to European sites, to US sites.

01:56:27:01 - 01:56:30:12
Christian Soschner
To. And we invest the money.

01:56:30:16 - 01:56:31:22
Shlomo Noy
And you fund it.

01:56:31:24 - 01:56:33:23
Christian Soschner
The JV fund. Yeah.

01:56:34:00 - 01:56:37:17
Shlomo Noy
Okay. Which basically fund it then, 100% for your fund.

01:56:37:17 - 01:57:18:14
Christian Soschner
Yeah. Exactly. That's an that's a major thing. Also, you mentioned earlier about the challenge of multi-site use US Europe and so on, all the majority, all sorry, all the major players of CLO have active, active Chinese subsidiary. Like and Novatek all of them, they have active Chinese subsidiaries. So you are a pain company. You created the JV with me, but you want, by excel to want to understudy in China.

01:57:18:16 - 01:57:26:08
Christian Soschner
Why you believe in both them. Okay. So banks will be.

01:57:26:08 - 01:57:33:17
Shlomo Noy
And for companies who don't have a preferred zero CDMO and rehab, then you can provide the services.

01:57:33:19 - 01:57:36:06
Christian Soschner
Yeah, we have our learning curve.

01:57:36:08 - 01:57:41:02
Shlomo Noy
I believe that, yeah. With 15 cases already, under your belt.

01:57:41:04 - 01:57:47:15
Christian Soschner
Yeah. We started with some of them, which, you know, were a disaster.

01:57:47:17 - 01:58:10:09
Shlomo Noy
But that's just this, this data. And, working with a global player who understands the ecosystem and has already, done the learning curve and went through the learning curve multiple times, so understands the, the strengths and weaknesses of the players on the market and can select the right players for the right problem. This is a huge advantage.

01:58:10:09 - 01:58:48:20
Christian Soschner
Yeah. I'll tell you another example from our fund. Our second a second investment in the second fund is a very interesting company with an antibody or oncology. Now suddenly after, you know, going to China and starting the activities and all that, they move one of their pipelines to ADC. And the most developed market, the most developed knowledge and experience of ADC today is China.

01:58:48:22 - 01:58:49:09
Christian Soschner
Much

01:58:49:09 - 01:58:54:19
Christian Soschner
better than the West? Oh, really? You need to see they can. So suddenly

01:58:54:19 - 01:59:03:15
Christian Soschner
I came to China indication x antibody y. Good. But I'm there and in another

01:59:03:15 - 01:59:20:11
Christian Soschner
pipeline I'm starting to work on ADC, but since I'm there anyway. Hey, there are excellent companies. There is an excellent Chinese company which they are signing now with them to give them the linker, which they didn't know in advance.

01:59:20:13 - 01:59:29:09
Christian Soschner
But since they're out there. See the link. They see the Chinese company with this excellent technology opening. Go.

01:59:29:11 - 01:59:36:08
Christian Soschner
And the fields will be Chinese. Very good. And this is an example.

01:59:36:10 - 01:59:37:05
Shlomo Noy
I didn't know that.

01:59:37:06 - 01:59:49:16
Christian Soschner
Didn't know that. Yeah. So when we hit this market and you will see prominent prominent Chinese company.

01:59:49:19 - 02:00:19:07
Shlomo Noy
When we look at the process will be the process I think is clear that you bring a lot of value to the development you provide. The capital, you leave the majority ownership to the parent company. You support on the Chinese market have the right network, made every possible mistake already on the market that you have a vast learning curve and can really be a helpful, partner in a Chinese endeavor.

02:00:19:09 - 02:00:33:23
Shlomo Noy
What's your sweet spot when you select deals? What are you looking for? Development, stage wise and indication wise? What's your what's your sweet spot? When does it make sense to approach you?

02:00:34:00 - 02:00:34:05
Christian Soschner
I

02:00:34:05 - 02:00:59:15
Christian Soschner
think that, if you are facing a phase one in the short, you know, in the short months to come. Yes, we are there. If you are very early. No, I mean, if you are, you know, clinical or whatever, you know, but if you are starting to approach clinical stages, phase one, we can take the phase.

02:00:59:17 - 02:01:37:04
Christian Soschner
Phase two, preferably, an indication. Yes. We take indication because indication is in the example I gave you. It's not only for prevalence later, but it also like all over the world it's also reimbursement implications. So if, if, if, if the history is any indication is not proven then as a general rule, your chances of having reimbursement by the Chinese system is less.

02:01:37:06 - 02:01:42:21
Christian Soschner
So we have to we have to match the clinical indication.

02:01:42:23 - 02:01:44:12
Shlomo Noy
And so

02:01:44:12 - 02:02:09:01
Shlomo Noy
if you understood you like you want to have a full journey story with a potential market entry ticket market entry in China in case the studies have a positive outcome. You don't want to be solely somebody who finances, production, for example, you say, okay, we make a Chinese, joint venture. There will never be a Chinese clinical trial, never be a Chinese, market entry, because there is just, that the disease is not prevalent in China.

02:02:09:03 - 02:02:15:15
Shlomo Noy
But we can still produce the compounds. So you want to have the full story and not only part of the story.

02:02:15:18 - 02:02:44:08
Christian Soschner
Yeah. The false the basic story is clinical activities. That's the guidelines. That's the mandate. If the JV does clinical side and besides the manufacturing with washing, is the best thing for the JV. Let it be. But the basic idea is the clinical activity.

02:02:44:10 - 02:03:00:20
Shlomo Noy
That makes sense. My question to you is I mean you set up your funds between Europe, Israel and China. Are you also open to United companies from the United States for this model?

02:03:00:22 - 02:03:05:05
Christian Soschner
Yes, we are open, but I'm not sure that they are open for this.

02:03:05:07 - 02:03:08:16
Shlomo Noy
Let's let, let's, let's, let's leave the political landscape out of it.

02:03:08:18 - 02:03:09:23
Christian Soschner
But I think.

02:03:10:00 - 02:03:11:15
Shlomo Noy
Otherwise we need another to tell us.

02:03:11:18 - 02:03:23:19
Christian Soschner
Exactly. But but, if I understand correctly, the situation now in the States, they need the special a special authorization. To go to any such model

02:03:23:19 - 02:03:44:11
Christian Soschner
which involves Chinese. And this is interesting because basically we are not in the cap table. If you look at the at the parent company, we are not the capital China. It's not in the capability but still there is this new authorization, which they have to fill in.

02:03:44:13 - 02:03:59:12
Christian Soschner
Yes, we are open to U.S. companies, but I think that, according to the situation, they will not only believe because it's too much of barriers on their side, not on my side.

02:03:59:15 - 02:04:24:03
Shlomo Noy
Yeah, I hope it changes. At least it is on this podcast. Much fan of the times from 1990 to 2020, where we talked about global collaboration and, the whole world worked together on solving, the big challenges that we have as a human society. And I think also it is from, I think, one of the Chinese martial artists of, country called his name right now, Jackie Chan.

02:04:24:03 - 02:04:36:02
Shlomo Noy
I think he always talks about this one family concept. And I much fan of that. And I hope also that, politics one day, politics one day will resemble that photo of the United World.

02:04:36:04 - 02:04:40:04
Christian Soschner
Hopefully. Yeah, we look into it. Yes.

02:04:40:06 - 02:04:55:18
Shlomo Noy
When we look at the fund creation, I'm, I'm sorry to interrupt a little bit. I see that we are already after two hours. How much time do you have? If you were going to try talking to you? And I have some questions left, but I would like to ask you, how much time do you have left?

02:04:55:20 - 02:04:59:04
Christian Soschner
Whatever is needed to talk about the fund.

02:04:59:06 - 02:05:07:09
Shlomo Noy
Okay, then, we can talk until 10 p.m. or 11 at times on.

02:05:07:11 - 02:05:08:24
Christian Soschner
Let's make the patient.

02:05:09:01 - 02:05:33:11
Shlomo Noy
So that a ten, 15 minutes, probably to go for a vote. What I would be interested in learning from you is, You are the chief medical officer of the fund. You're located in Israel. What were the challenges of creating such a fund in China and acquiring and and collecting capital?

02:05:33:13 - 02:05:36:08
Christian Soschner
Okay. I

02:05:36:08 - 02:06:01:22
Christian Soschner
was, it, to put it mildly, the, the raising the capital was done, but by our chairman. Our chairman is doctor Chuck Lightman, which is the only foreigner to be an owner of a citizens of the city of Wuhan. So, but as we started the discussion, he was the father of the incubation system in Israel.

02:06:01:24 - 02:06:32:17
Christian Soschner
In 99 is a big name. He is a special special. The world Bank consultant on innovation and basically here is the man. And the idea was that they wanted innovation to come to China. But they understand that if they understand, if they invest in the parent company, it will not be in China. So they said, listen, let's he created the model.

02:06:32:19 - 02:06:57:19
Christian Soschner
With all due respect to me, to the model. And he said we will do clinical activities in China which is the beginning of creation of ecosystem. They are interested. The Chinese are interested in the ecosystem. By the way, the company just another important feature, the company, the JV, it does not touch at all IP no way. It's only license.

02:06:57:21 - 02:07:21:24
Christian Soschner
So IP stays only with the parent company only. So he said we will bring Chinese company on the European companies on this model and, and we will do the job. We the professional, we are three partners. We will do the the job. We are full partners. The method one is Chinese and we we will do the job.

02:07:21:24 - 02:07:49:12
Christian Soschner
We will do professional job of investment, of selection of you know on what we talk. And the companies will come to to Quanzhou and in this way will stimulate the ecosystem and also make money. So, it took us two years or took him two years of negotiation when I was working at Chiba and, and, and that's the model.

02:07:49:12 - 02:08:22:12
Christian Soschner
The model is, to bring innovation without frightening the foreigners. Because many foreigners are afraid, you know, that there will be whatever name you choose with the IP. It is such a fear. But here we don't touch doing, and it's a win win. And that was something that made the breakthrough.

02:08:22:12 - 02:08:48:01
Shlomo Noy
While you were talking at one four, one question popping up, when the TV in China, that's also part of the production of, the compounds necessary and often there is some new, new ideas, some new inventions in that area. Also in clinical phase two, trial estimates be something that's worth patenting. What about these ideas when when they happen in China?

02:08:48:01 - 02:08:51:17
Shlomo Noy
How do you handle novel IP?

02:08:51:19 - 02:08:52:10
Christian Soschner
It's

02:08:52:10 - 02:09:14:03
Christian Soschner
in practical terms, it's in our nation. Listen it's Sheba. We do 3000 human trials a year, 3000. And I've never encountered an IP coming from phase two. So it's still it's not an issue. I don't think it's an issue. And manufacturing is not our main,

02:09:14:03 - 02:09:19:03
Christian Soschner
main objective. It's only if the company decides to do

02:09:19:03 - 02:09:20:21
Christian Soschner
manufacturing and.

02:09:20:21 - 02:09:26:22
Christian Soschner
Okay let it be. But but then they are the majority.

02:09:26:24 - 02:09:36:13
Shlomo Noy
So basically in the rare events that some later stage development that some UAP would be discovered, it would also be under control of the parent company at the end of form.

02:09:36:15 - 02:09:38:14
Christian Soschner
Yeah, yeah.

02:09:38:16 - 02:09:49:12
Shlomo Noy
You mentioned incubation in China, incubation incubation models in China. How does it look like in China? Is it, the same like in Israel, Israel, 1999, or is it different?

02:09:49:14 - 02:09:49:20
Christian Soschner
It's

02:09:49:20 - 02:10:17:15
Christian Soschner
very different in China. Incubation system is more like and to put it explain. So it is more like a real estate one. Beijing renting and so on. We create as an incubator in one show. That is one incubator like this, that is very similar to Israeli model. And we have Chinese and German and Israeli early, early stage companies there.

02:10:17:17 - 02:10:34:06
Christian Soschner
But this is not the main topic of the fund. It's another, early stage incubator. But main is what we discussed, the investment.

02:10:34:06 - 02:10:58:19
Shlomo Noy
Okay. So really your, your focus is, getting companies in clinical stages, who are interested in expanding their scope towards China. You are the experts there. You can help them understand the market, identify the market opportunity, assess to market opportunity, set up clinical trials, help setting up productions in China, deliver the data at the end of the day.

02:10:58:19 - 02:11:11:19
Shlomo Noy
And also our help for when it comes to exit discussions. They can also assume that probably Chinese pharma companies might be, valid exit partners in the future. You can also accelerate and, and, utilize these processes.

02:11:11:21 - 02:11:12:21
Christian Soschner
Yes.

02:11:12:21 - 02:11:26:23
Christian Soschner
This is an interesting point. We believe that in the future exit strategy via an M&A by a Chinese pharma company becomes more and more and more realistic.

02:11:27:00 - 02:11:44:18
Shlomo Noy
What are the target? I mean, when we look at the next 5 to 10 years with your fund, and you had to look in the crystal ball and come up with some ideas about what's the target areas of Chinese pharma companies will be in the next 5 to 10 years. How would it look like?

02:11:44:20 - 02:12:02:01
Christian Soschner
Like the rest of the world, it will be oncology oriented, very much oncology and and, there is a specific, objective in China, which they in a way, raised

02:12:02:01 - 02:12:10:08
Christian Soschner
it up in the list of endorsement, which is women diseases. They are now giving a lot of, a lot of focus

02:12:10:08 - 02:12:18:01
Christian Soschner
on women's disease. So this in many parts will be part of it.

02:12:18:03 - 02:12:55:00
Christian Soschner
And I think obesity and diabetes and diabetes as part of the Western lifestyle is becoming more and more and more of a challenge to like all over the rest of the world. I think that this is the usually the main issues, like the rest of the world beside women's health, which is more specific to China, and also, and also the, trying to,

02:12:55:00 - 02:13:01:05
Christian Soschner
to dive more and more into genetic diseases.

02:13:01:07 - 02:13:01:23
Christian Soschner
This is the

02:13:01:23 - 02:13:05:15
Christian Soschner
focus in the next 5 to 10 years, I think.

02:13:05:17 - 02:13:17:00
Shlomo Noy
So if I would try to simplify it for me, it sounds to me like it's pretty much the same strategic landscape, like, in the Western world, more or less.

02:13:17:02 - 02:13:41:05
Christian Soschner
Borders and also, changes in prevalence. We say on ecology. But, you know, if you look at leukemia, the different subtypes of leukemia, which are much, much, much less prevalent in China as opposed to other places. So there are differences in the prevalence, as we mentioned before. But basically the direction is is what I mentioned.

02:13:41:05 - 02:14:09:07
Shlomo Noy
Okay, that sounds great, Shlomo. It's really great talking to you. And I could go on for another 2 or 3 hours. You're such a valuable source of information and have so much experience. I have two questions left before I ask these two questions. To not hold you up any longer. Is there anything you would like to address at the end of the podcast, that hasn't tackled yet with my questions?

02:14:09:09 - 02:14:25:07
Christian Soschner
No. I think that we covered everything, especially on the tech, on specific talk and on the and on the opportunity of European companies in China. And I want to thank you for the opportunity.

02:14:25:09 - 02:14:30:12
Shlomo Noy
It's great. It's great having you on the show, but let me, finalize with the last two questions.

02:14:30:14 - 02:14:31:18
Christian Soschner
So,

02:14:31:20 - 02:14:56:14
Shlomo Noy
We we we we are coming close to 2.5 hours. And when someone looks at the podcast and says, oh my gosh, this guy's for talking to us, I, I don't listen to everything. Yeah. So when in the description of the podcast, when I make the last point in the table of contents, a Tldr, too lazy to listen to everything.

02:14:56:14 - 02:15:04:01
Shlomo Noy
Here is the summary. What key message would you like the listeners of the podcast to take away from this conversation?

02:15:04:03 - 02:15:41:11
Christian Soschner
One is, one is, managing innovation from research to applicable products, tech transfer in university and hospitals. I think that we have a very intensively and I'm happy with it. Second will be a unique model of investment and the exploiting the Chinese has good market. These are the two topics which I think should be emphasized.

02:15:41:13 - 02:15:57:18
Shlomo Noy
Yeah, I will do that. And the last question then, when biotech investor or entrepreneur is, inspired and things. Okay, let's, look into the Chinese opportunity. What's the best way to get in contact with you?

02:15:57:20 - 02:16:16:24
Christian Soschner
I think the best way would be via email of the phone. And Shlomo. Shlomo. So then Giba, sent them same kind of simple bio, bio.com.

02:16:17:01 - 02:16:19:12
Shlomo Noy
Okay, then I will add this also to the description.

02:16:19:16 - 02:16:20:24
Christian Soschner
That you have.

02:16:21:01 - 02:16:24:12
Shlomo Noy
Are you also active on LinkedIn? I learned that, some people,

02:16:24:14 - 02:16:43:22
Christian Soschner
I have my profile there. I have not over there. But then because I'm not that much active demo, but I have my profile and I have my maven. Yes, but I'm not too active. That's why I think that the best way is maybe so.

02:16:43:22 - 02:17:06:22
Shlomo Noy
But anyway, recommends that anybody who asks me and also in the description that if you are interested in evaluating the Chinese opportunity, reach out to Shlomo. He understands the market. He has a fund. He has 300 million ready to invest in new endeavor. It's not fully allocated yet, so there is enough room. China is interesting and might also be, coming in the next 5 to 10 years.

02:17:06:22 - 02:17:11:06
Shlomo Noy
One of the big exit opportunities for European biotechs.

02:17:11:08 - 02:17:13:19
Christian Soschner
I'm sure, about the.

02:17:13:21 - 02:17:30:21
Shlomo Noy
Super Shlomo, thank you very much for your time. Thank you very much for being guest on my show. I enjoyed every single minute of our conversation and let's catch up in a couple of months and, see how what came out of this podcast and how China evolved.

02:17:30:23 - 02:17:42:22
Christian Soschner
Excellent. Thank you very much. Likewise, I enjoyed it. It was very, very nice and productive show. And I really thank you.

02:17:42:24 - 02:17:47:24
Shlomo Noy
Thank you. I wish you, a great rest of the weekend. Let's catch up soon.

02:17:48:01 - 02:17:50:16
Christian Soschner
Yeah, let's let's do it. Bye bye.

02:17:50:17 - 02:17:51:24
Shlomo Noy
See you. Bye bye.

02:17:51:24 - 02:17:59:14
Christian Soschner
We have journeyed through the heart of healthcare innovation, uncovering the pivotal insights that drive real impact globally.

02:17:59:14 - 02:18:05:16
Christian Soschner
Today, Shlomo Noy gave us a real look into the mechanics of creating value in biotech.

02:18:05:16 - 02:18:12:07
Christian Soschner
From Israel's trailblazing innovation ecosystem to China's vast untapped market,

02:18:12:07 - 02:18:41:03
Christian Soschner
we explored strategies to incentivize researchers balance clinical and financial insights and the importance of securing control while navigating global partnerships. If these insights resonated, please remember to like, comment, and share this episode. Your engagement helps us bring more top tier guests like Shlomo and deliver even greater value. Entirely free to your.