Boutique Services for Biotech: The Israeli Company That Is Reimagining Drug Development and Manufacturing

In biotechnology, the gap between a scientific breakthrough in the lab and an approved drug on the shelf is long, expensive, and complex. When developing a pharmaceutical product for human trials, biomedical startups must meet stringent regulatory standards that require improving manufacturing processes and quality testing that were originally developed in university laboratories. They must adapt these processes to operate under controlled and consistent conditions to ensure safety, quality, and effectiveness when produced on a commercial scale.

Developing and manufacturing a biological drug product is several times more complex than manufacturing a chemical, small molecule, drug and require more advanced and expensive equipment as well as a sterile manufacturing infrastructure with clean rooms that are costly to build and operate. Most young startups cannot afford to acquire or build these advanced development capabilities, and they lack the experience needed to operate them. Therefore, they turn to companies providing contract development and manufacturing services (CDMOs), which allow them to outsource development and production processes.

This is precisely where Scinai Immunotherapeutics enters the picture, offering boutique-quality CDMO services to biotech and pharmaceutical companies. With a modern biologics facility in Jerusalem and a strategic entry into the American market, the company provides end-to-end solutions—from drug manufacturing process development and optimization, to drug substance and drug product production meeting cGMP standards. Scinai's boutique model provides its clients with maximum flexibility and significantly shortens the time required to advance new drug candidates to the clinical stage.

But Scinai is not just a CDMO service provider; it also develops an independent product pipeline based on nano-antibodies (VHH antibody fragments or NanoAbs), innovative antibodies sourced from alpacas (see box). NanoAbs offer significant advantages for treating autoimmune and infectious diseases thanks to their ability to bind to biological molecular targets in our body in a very strong, selective, and precise way. Thus, while Scinai helps startups realize their vision through its CDMO arm, it also develops its own innovative drug products with the potential to transform medical treatment.

"The company's dual model—combining advanced CDMO services with internal development of innovative drugs—positions Scinai as a unique player in the market, with a combination of deep knowledge and experience in biological manufacturing and innovative drug development," says Scinai CEO, Amir Reichman, in a special interview. " This reflects our strategy of diversifying risk by operating both as a service provider with production capabilities for clinical trials and as an innovative R&D company. The two growth engines operate under different divisions, ensuring short-term profitability and a larger multiplier on investment in the long term""

What is your expertise in CDMO services and what benefits do you provide to biotech companies?
"Let's say an entrepreneur has an idea, patent, or the beginning of a technology and has raised the initial seed funding. The company could of course rent laboratory space, purchase expensive equipment, recruit talent, hire consultants, and reinvent the wheel—or it can turn to us and significantly save on costs and development time. The solution we offer is not only efficient but also more economical in the two most important resources for entrepreneurs: time and money. In addition to extensive equipment, organizational processes, and an international-level facility, we also have extensive knowledge and experience in early-stage drug development, process development and optimization, development of analytical methods, and production of GMP-level batches for clinical or pre-clinical studies. We tell entrepreneurs: 'Scinai provides you with biological CDMO services in Israel, close to home! Don't waste investor money on laboratories, expensive equipment, and production rooms. Don't embark on recruiting and assembling a new team that must learn how to develop a drug as a team. Don't waste time understanding and complying with all the quality and regulatory procedures required for IND submission, and most important—don't go abroad. Put together a small team and work with us. Enjoy the personal approach of a boutique company, at reasonable prices and FDA/EMA-level quality, and the expense is recognized for reimbursement by the Innovation Authority. As a small startup, you might wait in line for eight months for a slot if you go to a CDMO abroad, which typically works with large companies, only to discover that even the smallest change in the process increases the rate and extends the timelines."

From planning to manufacturing by all standards and requirements
Reichman reminds us of some basic truths: developing a new drug is one of the most expensive and lengthy processes in the global industry. From initial laboratory research to final approval by regulatory authorities like the FDA, it takes an average of 10-15 years and can cost over a billion dollars. And despite the enormous investment, the success rate is low: only about 10% of drugs that reach clinical trials eventually receive marketing approval. "The high cost and significant risk logically lead many biotech companies to rely on CDMO services to reduce costs, shorten development times, and maximize chances of success in a competitive market."

Let's break this down. What are the different stages in the process and how does your guidance manifest in practice?
"We guide entrepreneurs in the target product profile planning stage, then in developing methods for product manufacturing to ensure that production meets the threshold conditions of regulatory authorities and enable scaling to a repeatable and safe process. We also develop analytical methods for in-process control and batch release so that it can be used for clinical trials and commercial production when approved."

"All this is carried out in our sophisticated plant, which includes laboratories, clean rooms, and high-end laboratory and production equipment worth some $14 million. We have extensive experience in using the equipment following strict rules (right first time), including appropriate documentation, and investigation of deviations. It is all carried out in clean rooms, under GMP manufacturing conditions, according to all standards and requirements of the Israeli Ministry of Health, the US FDA, and the European Medicine Agency (EMA).."

Safety and efficiency in protein production
"The development and production activities carried out at our facility are based on biotechnological processes. To produce proteins on a commercial scale, we need to 'train' cells to express and secrete the desired protein. To this end, we clone DNA sequences encoding the target proteins into yeast or bacterial cells," Reichman explains. "We then grow these microorganism cells under controlled laboratory conditions in fermenters—containers similar to those used for wine or beer fermentation—except that instead of an alcoholic beverage, we produce proteins intended to be injected into the human body under sterile conditions. During fermentation, the cells 'translate' the genetic information into the desired proteins and secrete them into the solution in in the fermenter. This process, called upstream, is performed in laboratories during process development and in clean rooms during cGMP production. These conditions are essential for maintaining the quality of the resulting proteins and preventing contamination that could damage the production process."

"After the upstream production stage, the downstream process begins. Its main purpose is to separate and isolate the desired protein from the cells and solution in which they were fermented. We carry out a series of cleaning and purification operations, including centrifugation, various filtrations, chromatography, protein concentration, and buffer exchange. The purpose of these operations is to remove contaminants, other proteins, and additional components that may be present in the mixture, until obtaining a single, pure, concentrated protein of high quality."

"After the cleaning and purification processes, we formulate the isolated protein: we dissolve the protein in a buffer prepared from high-quality water for injection (WFI), suitable for injection into the human body. We also operate an innovative facility for producing WFI that ensures the supply of water of the highest quality. It operates under strict standards to ensure that the water meets the stringent regulatory requirements for WFI and is connected via sterile piping to spaces in the clean room, feeding both the production areas and the cleaning and washing areas of the equipment. The use of WFI is essential to ensure the sterility of protein-based drugs, most of which are intended for injection into the human body."

In the final stage of the manufacturing process, the materials are filled into syringes or vials followed by a rigorous visual inspection to ensure they contain no foreign particles. Next, the syringes are labeled, furnished with information leaflets, carefully packaged, stored under GMP requirements, and eventually transferred to clinical trial sites.

Reichman describes laboratory workers in space suits, which they put on after showering, wearing special undergarments, sterile coveralls, special shoes, and two pairs of gloves, everything being checked and controlled to ensure that no bacteria enter the clean rooms. "We operate in three-hour shifts inside the clean room because the tasks require incredible concentration and attention to detail, working in these uncomfortable conditions and sterile clothing."

"During the entire manufacturing process and in the final stages, we perform rigorous quality control testing in a dedicated laboratory to ensure that the products meet accepted standards and are of high quality. Our quality assurance department is responsible for drafting the quality management system and breaking it down into processes and standard operating procedures (SOPs).. The quality assurance staff ensures that all processes are carried out according to the abovementioned SOPs while adhering to the highest standards, according to regulatory requirements."

Demand for outsourcing is on the rise
Reichman is an entrepreneur and was the first employee hired by the founders of NeuroDerm Ltd., an Israeli company that focused on the treatment of Parkinson's disease and was acquired in 2017 by the Japanese Mitsubishi Tanabe Pharma for $1.1 billion. Reichman studied business administration at the Wharton School of the University of Pennsylvania in the US, then went on to an international career with large pharmaceutical companies, such as Novartis in the US and GSK in Europe, gaining experience in the drug and vaccine development and manufacturing, including R&D, engineering, and production. A Zionist, in 2021 he returned to Israel and was approached by the board of Israeli company BiondVax to manage their reorganization after their lead product, a universal flu vaccine, failed the pivot clinical trial (Phase III). Under Reichman's management, the company underwent a complete transformation. He led the acquisition of exclusive development and commercialization licenses of new nano-antibody patents (NanoAbs) for treating autoimmune and infectious diseases from the Max Planck Research Institute and the University Medical Center in Gottingen, Germany. He split the company into two divisions—innovative R&D and CDMO services —turned the vaccine manufacturing plant into a plant specializing in contract development and manufacturing services (CDMO), and to top it off, changed the name of the company to Scinai Immunotherapeutics.

"Instead of being a company focused on a single product, essentially a one-trick pony, we became a vision-driven company engaged in a variety of R&D and manufacturing activities," Reichman explains the rationale behind the change. "As a former entrepreneur, I believe that I can understand the needs of entrepreneurs and how to best address them."

What makes an experienced entrepreneur board a sinking ship?
"I saw that the company had a collection of talented and experienced professionals who know how to take products from the patent stage to advanced clinical trials in humans. It is a trained team, experienced in highly professional and structured work processes, with a sophisticated and well-equipped plant that can accelerate biological drug development projects and manufacture under sterile conditions. In fact, the CDMO division had almost everything it needed, and with the help of the Innovation Authority, we built a business and marketing plan and made engineering adjustments to the plant. The R&D division, however, lacked technology and products for development, which we acquired through licensing from the Max Planck Research Institute. In this way, we completed the golden triangle of 'people-processes-technologies for both business units."

"As demonstrated in the case of BiondVax and other companies in the Israeli biotech industry, building a company around a single product (or service) is a mistake. The business model, which I learned in business school and later during my career in the US and Europe, is that of a company built around a vision you aspire to fulfill. Therefore, I converted the previous model of the company into one where it focuses on a vision and as a result it creates or acquire the technologies needed for future products that will fulfill the vision it wishes to accomplish. When you have several products in the pipeline, one failure cannot wipe out the company. You move from a binary success-failure model to a more sustainable one."

What do the numbers say almost four years later?
"In the CDMO division, which, unfortunately, began its operations just before the war broke out, we actually finished 2024 with good revenues and I estimate we will be profitable before the end of 2026. There is enormous demand for biological molecule development, a highly complex process. They are difficult to manufacture and require advanced knowledge and equipment. It's very expensive to do it in-house, so the demand for outsourcing is growing. In the R&D division, we have so far acquired two nano-antibodies, one of which will be starting development in a sublicensing collaboration with an American pharmaceutical company. The contract details will be disclosed by the end of April 2025."

US subsidiary
Recently, Scinai Immunotherapeutics established an American subsidiary called Scinai Bioservices Inc., which will offer CDMO development services to American companies. "We are expanding our CDMO marketing and sales services and targeting American customers, increasing our volume proposition," Reichman explains the rationale behind the move. "We are responding to the growing demand in the US for biological drug development and manufacturing services, partly owing to legislation (the Biosecure Act) that prevents US drug developers and manufacturers from outsourcing operations to Chinese companies.. It's important to understand that about 35% of the American market today depends on drug development and manufacturing services from Chinese suppliers, and this legislation came about because of national security considerations and concerns about intellectual property protection standards in China. This creates a tremendous business opportunity for us, as small startups, not necessarily American, that receive development grants from American federal authorities must contract with suppliers from countries that are not adversaries of the US, so we can offer them our services. We already adhere US FDA standards and we have no difficulty performing all development stages here in Israel, including manufacturing for clinical trials. We estimate that about 50% of our revenue will eventually come from American customers."

"This move also has a national aspect," he adds. "It not only brings foreign currency into the country but also causes a positive interaction with American biotech and the FDA, exposing Israeli biotech with all its advantages to American companies. It will also allow American companies to consider conducting clinical trials in Israel, together with leading medical centers, at more cost-effective rates."

Huge sales potential of $1 billion annually
In its innovative arm, Scinai Immunotherapeutics focuses on developing drugs for autoimmune and infectious diseases using nano-antibodies derived from alpacas. These nano-antibodies (nanoAbs) are ten times smaller than human antibodies and make possible targeted treatment, with local drug delivery (intradermal injection, inhalation, etc.) and fewer systemic side effects.

Among the key developments of the company is an innovative drug for treating plaque psoriasis, a chronic autoimmune dermatology disease characterized by lesions and itching. Current treatment includes subcutaneous injections of expensive antibodies. It is intended mainly for severe cases, and may cause significant side effects. Beyond the fact that most patients are not eligible for this expensive treatment, even in those who qualify for this antibody treatment, many areas in the body remain unresponsive to treatment because of poor blood flow.

Scinai's solution is to inject nano-antibodies directly into lesions using a tiny 2mm needle, which reduces the risk of systemic side effects. The drug, exclusively licensed from the Max Planck Institute in Germany, is in the pre-clinical trial stage and is expected to be available in 2031. "The drug has a huge sales potential of $1 billion annually," estimates Amir Reichman.

Another development is intended for treating asthma and chronic obstructive pulmonary disease (COPD). The innovative Scinai approach is to use an inhaler that introduces nano-antibodies directly into the lungs for targeted treatment with fewer risks.

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In collaboration with Scinai Immunotherapeutics