REHOVOT, Israel - The Clal Group, one of Israel's largest industrial concerns, formed Clal Biotechnology Industries (CBI) and will invest $10 million in D-Pharm Ltd., a developer of drug-targeting technologies.

This is the concern's first investment in the biotechnology field and is “in accordance with corporate strategy,“ said a CBI spokesman, adding “Clal Industries' management estimates biotechnology has one of the largest growth potentials in the coming decade. The company intends to augment its investments in it.“

David Haselkorn, formerly chief operating officer and managing director of BioTechnology General Corp., in Rehovot, Israel, is now CBI's CEO.

“We aim to establish CBI as a major player in the life science industries,“ Haselkorn said.

With a budget of tens of millions of U.S. dollars and an “aggressive but very strategic acquisitions strategy,“ Haselkorn predicted “CBI will achieve this goal within two years, with an emphasis on Israeli and European biopharmaceutical companies.“

D-Pharm, of Rehovot, develops platform technologies that selectively target drugs for activation at a disease site.

Alex Kozak, D-Pharm's CEO and president, said, “The funding will enable us to make the transition from being a technology start-up company in advanced development of drug-targeting platforms into a product development company taking drug candidates into the clinic. Two of D-Pharm's products should reach human clinical trials within 12 months.“

D-Pharm's most advanced product is DP-VPA, a new and improved derivative of valproic acid. By reducing side effects and improving efficacy, DP-VPA is expected to benefit those suffering from disorders such as epilepsy, bi-polar depression and migraines.

“We expect to commercialize DP-VPA through partnering with a major pharmaceutical company,“ said Kozak.

Another leading D-Pharm product is DP-BAPTA, a neuroprotective agent that has demonstrated a high pharmacological, neuroprotective efficacy with apparent lack of cardiac toxicity in animal models. The targeted drug lead is being developed for use as a prophylaxis against neurological damage associated with open-heart surgery. The company noted more than 500,000 cardiac artery bypass surgical procedures are performed annually in the U.S.

Derivatives of the DP-BAPTA family also are being considered for treatment of Alzheimer's disease. In addition, an anti-AIDS drug is being investigated with a target market estimated in the billions of dollars in annual sales.

“The technology has the ability to decrease or even eliminate side effects,“ said Kozak, as well as create “second-generation“ drugs with extended patent protection.

Previous investors in D-Pharm include a variety of venture capital groups. Among them are the Advent Venture Fund, Medmax Ventures, Gemini Fund, Apax Partners, Vertex Group and the Walden Group.

“If developments continue as they seem, then I hope that we will have much more news to follow in a very positive and enthusiastic spirit,“ Haselkorn said. *