Ovid Pharmaceuticals CEO details biotech pledge to cut ties with Russia

Ovid Pharmaceuticals CEO Jeremy Levin joins Yahoo Finance Live to discuss biotech industry leaders pledging to cut ties with Russia and how sanctions financially target key Russian officials.

Video Transcript

- Welcome back. As Western allies find common ground on sanctions against Russia, some businesses are following suit, severing ties with Moscow. Here to help us discuss all of this is Jeremy Levin, CEO of Ovid Pharmaceuticals.

Jeremy, thanks so much for being here. So in a letter you are advising business leaders to cut ties with Russia. And I'm wondering in what ways do you want them to disengage? And what impact do you hope that will have?

JEREMY LEVIN: Corin, thank you for having me on. It's less a letter than a pledge. And in order for us to really be effective, you have to have a very solid set of commitments.

There are over 300 and close, probably now 400, and increasing exponentially, signatories to this. They're all CEOs. Why is this important? It's important because Russia is actually governed by one man surrounded by a group of very wealthy oligarchs and advisors.

They run the businesses in Russia. It's not like the United States. So our intent is very straightforward.

Our intent is to economically disengage from these individuals. And how we do that, is we make the pledge first of all, to stop investing in their businesses, to stop having any kind of joint ventures, investing in infrastructure, and at the same time, also to stop collaborations, or other such activities in Russia. It doesn't mean we won't have medicines and food going to Russia, but it does mean that we stop actively promoting their businesses.

- And so what extent do you think that the medical industry should cut links, as well? Because biopharma industry there is actively testing more than 250 drugs and devices in clinical trials that include the Ukraine.

JEREMY LEVIN: Yes, the Ukraine clinical trials have already been disrupted. We are supporting the Ukrainians and also, the Russians who are protesting against their government. At the same time, we will not do anything to harm ongoing clinical trials. But by and large, the Russians have already done that. They've actually actively done it.

What we will intend to do is not start new ones. The clinical trial business is a very big business. Russia targeted biotechnology and clinical trial business as a way of starting to get their feet wet in biotech. They created businesses in this area. Many in the West went to invest in those.

Now, this is not something that we'll be doing in the future. We'll wait until we see that the pressure is exerted on Putin and those that surround him to ensure that they bring back a sovereign, free, democratically elected government in the Ukraine. But at the same time, please be very clear, we're not stopping medicines or foods going to those that need it. That will continue until such times as we see the whole world come back to some kind of normality.

- How can you be so sure by businesses and leaders taking this action, It will serve as a deterrent? Because nothing seems to have worked so far. Putin seems to be laser focused on one, and one thing only, and that is gaining control of Ukraine.

JEREMY LEVIN: Dictators always have people who are either acolytes, or those who enable them. The point here is to make sure that those acolytes and those who enable them, feel the pain, and make sure that they stop enabling the activities of Putin. We can't be sure that we, a small industry, can have this effect. However, what we can be sure is, if we show the example to other industries, like the minerals industry, like that of the digital industry, the service industries, financial industry, we most certainly can have an effect and it will be extremely harmful to the Russian long term interests. This thing need to understand--

- Go ahead continue your thought.

JEREMY LEVIN: No, they need to understand this because this is a serious and concerted endeavor, which hopefully will spread to other industries.

- And Jeremy, I'm wondering do companies now have to weigh the reputational risk of doing business with Russia versus the economic risk? For example, BP just severed ties with a large Russian oil company, expected to take up to a $25 billion hit on that. McDonald's is on hot water for a posting that it's closed stores in Ukraine, but came under fire for not saying anything about the stores in Russia. Delta has been very quick to sever ties with codeshare agreements with Russian carrier Aeroflot. So how much does the reputational value of these businesses now come into play?

JEREMY LEVIN: Very much so. Let's take a point in case. Jefferies severed ties with-- in their banking in 2014, when Russia first invaded into Ukraine. Jefferies is today one of the biggest banks in biotech.

So I think every company that does business there has to think very carefully about what those who consume capital in this country will be doing. We as an industry consume billions of dollars and raise billions of dollars in this country to fund our interest, our activities. So every company that continues to support the Russian regime needs to think carefully.

At the same time, those who have employees in those countries will most certainly be carefully thinking about how to take care of those employees. And in our case, making sure that the sick, those who need medicines, get them. Of course, this has been totally disrupted by the Russians in Ukraine.

And of course, refugee agencies are now having to deal with floods of refugees, many of whom need medicines, and whom we're going to try and help on the borders of that country. So just imagine for a moment, you can't get your insulin, just because the Russians have invaded your country. Not a thing to contemplate.

- No, and we've heard stories of people in Ukraine, for example unable to get medication that they so desperately need, as well. All right, we will leave it there. Thank you so much for your time today. Jeremy Levin, CEO of Ovid Pharmaceuticals.