Two Tentative Deals Come Out of Cuomo’s Cuba Trip

On his first day in Cuba, Gov. Andrew Cuomo said he did not expect any of the business executives traveling with him to complete a trade deal during the delegation’s 26-hour stay on the island.

But by the next day, a Manhattan technology company and a Buffalo cancer center announced that they had secured potentially lucrative agreements with new partners in Cuba.

Infor, a business software company with headquarters in Manhattan’s Chelsea neighborhood, said that it had signed a contract with a Cuban company that will distribute its customized health care software at hospitals in Havana and other parts of the island—and, down the road, possibly in other untapped markets across Latin America.

The other big announcement came from Buffalo’s Roswell Park Cancer Institute, which finalized a partnership with Cuba’s Center for Molecular Immunology to collaborate in developing a promising vaccine for lung cancer.

“Frankly, I did not believe we would make that much progress in that short a period of time,” Cuomo told reporters afterward on the flight from Cuba back to New York. “I was shocked that they made as much progress as they did in two days.”

Neither deal is a sure bet, however. For starters, both require federal approval. Infor will have to apply for a special license from the Treasury Department since Cuba is still under the U.S. trade embargo. That could come more easily than the U.S. Food and Drug Administration’s approval of the lung cancer vaccine, which is in the preliminary stages of development in Cuba.

The tentative nature of the agreements also echoes a broader reality on the Cuban side: that developing ties with the socialist country and carrying out business deals with government-run entities who control much of the economy often goes at a slow pace and can fizzle out altogether.

“The fact that they got those deals and that they were led by chief executives is a good thing. It’s symbolic,” said Antonio Martinez, a lawyer who heads the Cuba & Latin America Trade Group at Gotham Government Relations. “The challenge with Cuba is always going to be the follow-through. There’s going to have to be time, resources invested in making sure that these deals go through to fruition and they’re not a one-shot deal.”

Whether or not the deals pan out in the long run, they provided Cuomo with evidence that his trip, paid for with taxpayer dollars, was worth the cost. At a press conference in Havana’s Jose Marti International Airport Tuesday afternoon that concluded the governor's trade mission, representatives unveiled the basic outlines of the agreements and thanked the governor for playing an essential role in facilitating the partnerships.

Candace Johnson, Roswell Park Cancer Institute’s president and CEO, said that the groundwork had already been laid to partner on the vaccine, but that the governor got it to the finish line.

“This would not have happened without this trade mission, which provided that face-to-face finalization of that agreement that will enable us to go back to New York and get started on this exciting clinical trial,” Johnson said. 

Johnson said later that the vaccine, if successful, could eventually have a “huge economic value.” She said that Cuba, despite its struggling economy, has a remarkably innovative pharmaceutical sector and that its vaccine facilities meet standards set in Europe and Japan. The new vaccine could also be more cost-effective, Johnson added, consistent with a number of treatments used or developed by the cash-strapped medical community in Cuba.

But in the U.S., many promising drugs and therapies fail to make it through the FDA’s approval process, which can last a year or more.

“One of our challenges is that obviously the Food and Drug Administration doesn’t see too many applications to do a Cuban vaccine, so that’s going to be our next challenge to get it through,” said Kelvin Lee, the chairman of immunology at Roswell Park who was also part of the delegation.

But if this vaccine does succeed, Johnson said, it could be a breakthrough in treating lung cancer and even preventing recurrence. It could also pave the way for future partnerships with Cuba, she added.

“The real beauty of this vaccine is it's against a growth factor that tumor cells make. So instead of killing the tumor cell itself, you get rid of the growth factor that’s actually stimulating the tumor to grow—a very innovative way to approach things,” she said. “The other beauty of this is it has very little toxicity associated with it. That’s not always true with many things that we give cancer patients.”

Charles Phillips, the CEO of Infor, said he was optimistic about his agreement with deSoft, a Cuban company, to integrate health care records with hospital accounting systems. Infor’s software is widely used in the U.S., with 72 percent of hospitals relying on it.

Unlike Roswell Park’s deal, Phillips said he had not been in touch with deSoft at all before arriving in Cuba with the governor. “We reached an agreement at dinner last night over rice and beans,” he told reporters.

Phillips later said that locally developed health care software is already installed in about 62 hospitals in Cuba, while another 100 or so are basically manual and need to be automated. His company will update and integrate the existing software with its own.

“So that’s kind of the size of the immediate market, and that’s potentially millions for us,” he said. “And they’re in something like 40 other countries in Latin America, so that’s the real upside. We sell expensive software, so the average deal is around $200,000. So if there’s hundreds of hospitals or thousands of hospitals, the number could go into the millions.”

Phillips said that he and other business representatives had been briefed by the Commerce Department and the Treasury before the trip about the process of getting a license to bypass the embargo, and that they had been assured that their applications would be expedited.

“They’re waiting for us to come back to them and tell them what license we need,” he said. “Whereas before, you don’t even know how to do it normally.”

Representative of several other companies on the delegation had already taken steps toward doing business in Cuba. JetBlue, for example, operates charter flights to Cuba, and MasterCard announced shortly after the announcment of the historic thaw between the two countries that its cards would be accepted on the island.

For others, the trip was little more than an introduction to the country and potential trade partners.

“We had a really good meeting with the farmers, the importers, but most importantly I think there’s an import opportunity there,” said Hamdi Ulukaya, the CEO of Chobani, which produces Greek yogurt. “I think the next thing would be to visit them on their farms and their operations. There’s so much to share.”