BioWorld International Correspondent

ZICHRON YA'AKOV, Israel - The U.S. FDA ban on sending authorized inspectors to Israel since December 2000 is about to be lifted, according to U.S. Embassy sources in Tel Aviv. Official visits will re-commence within a few months, with the first one planned for July 11.

About 15 to 20 biopharmaceutical, biotechnology and medical device companies that export to the U.S. or hope to are awaiting FDA inspections of new production facilities since all manufacturing plants and processing of products destined for the American market require FDA pre-approval.

The FDA had stopped inspectors' visits for safety reasons when the U.S. State Department issued a travel advisory for the Middle East some 18 months ago. A clarification in March 2001 by the U.S. State Department that the travel advisory was not for government officials effected no change in the regulatory agency.

Nor had the regulatory body's travel freeze been thawed by Israeli offers to deploy an agreed-upon security network for all FDA personnel; to pay any additional insurance for those FDA employees willing to travel to Israel; or to authorize an Israeli or European laboratory to perform the necessary tests, using video-conferencing as needed.

So the Israel Biotechnology Association and other industry bodies helped initiate intensive lobbying by the Israeli Embassy in Washington. It was hinted that diplomatic interventions at the highest levels had helped end the "self-imposed travel ban."

Zeev Holtzman, chairman and CEO of Giza Venture Capital, which was founded in 1992 and has $311 million under management, told BioWorld International that, ultimately, the widely perceived lack of security may be a blessing in disguise. "Ninety-nine percent of Israeli high-tech companies have their markets outside of the country. The current situation puts pressure on Israeli companies to become global; that is ultimately for the good. Israeli companies have to be closer to the markets, closer to the clients, with customer support closer to the customers. Regarding the FDA, the fact that they are not visiting Israel is a scandal that both the USA and Israeli governments should take care of."

Israeli firms affected were hesitant to confirm their difficulties, citing "business considerations," but the FDA's absence from Israel impacts Bio-Technology General Corp., headquartered in Iselin, N.J. BTG retains its founding research and development and expanded manufacturing facilities in Ness Tsiona. One industry leader said that BTG may be forced to move part of its operations [for its BioLon, which is classified as an ophthalmic medical device] to the U.S. if it wants to stay on schedule for its contract obligations to its American partner, Akorn Inc., of Lincolnshire, Ill., a move that would raise the device's production cost.

Others in line for FDA inspections are Teva Pharmaceutical Industries Ltd., of Jerusalem, which produces the multiple sclerosis drug Copaxone, and Taro Pharmaceuticals Industries Ltd. in Tel Aviv. Records show they had passed every test during the prior regular biennial visits, but this long absence throws off the production schedule significantly.

Another affected company is Omrix Biopharmaceuticals Ltd. in Kiryat Ono, which, ironically, has been cited by Israeli Quality Institute for its particularly high GMP standards in preparation of its human plasma derivatives for the local and European markets. Omrix was unfortunate to have filed its first product license application with the FDA in September 2000, just when the political unrest began in earnest.

Omrix had completed two Phase III trials with high marks on its proprietary, ready-to-use Human Surgical sealant Quixil, but awaits FDA approval, delaying its entry into the U.S. market, which would be its main market.

Officials are relieved that the FDA freeze is ending, but many wonder how it could have gone on for so long. David Haselkorn, head of the $140 million Clal Biotechnology Industries Ltd. in Tel Aviv, the life sciences arm of the $5 billion Clal Industries & Investments Group, told BioWorld International, "The misconceptions about Israeli security border on the ridiculous. There are risks everywhere in the world; more people die of cardiovascular disease than in terrorist attacks, but that does not make front-page news. We in Israel have grown an outstanding biotechnology sector despite everything. Imagine how advanced we would have been without all of these impediments. Peace will bring even greater rewards for everyone in the region."

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