Monday, August 8, 2016

A Look at Three of Boston’s Biotech Disruptors: Christopher Viehbacher, Michael Pellini and Noubar Afeyan

Disruptors are a special type of innovator who go outside the box and attempt to change preconceived notions and practices. If you take a look at the meaning of the word, “to disrupt” means to “rupture” or break apart, and essentially disruptors do this - discarding the old ways to bring in new ones. We might even take it a step further and look at as the commonly used root of "dis" which means to "do the opposite of" - and see the idea that disruptors are "fixers" essentially putting the pieces of something broken back together. Here’s a look at three disruptors in Boston Biotech who are revolutionizing traditional pharma to radically change the ways cures are being brought about for disease.

Boston Biotech Disruptors

From all the stories that have been in the press about Christopher Viehbacher lately, you see a man who’s an extremely successful change agent that helped Big Pharma save billions. But dig a little deeper and you see a different Christopher Viehbacher, a person who is passionate about “bringing medicines to patients” without “distractions”. Joseph Haas from The Pink Sheet interviewed Viehbacher last year at BioPharm America™ and in the video Viehbacher comes across as fairly triumphant about having left his career in Big Pharma behind and invigorated by his current work as Managing Partner of Gurnet Point Capital and Executive Chairman of Boston Pharmaceuticals.

Interviewer Haas discussed how it’s a current trend that key executives in the industry are moving from Big Pharma to “small pharma” or biotech, and this theme was echoed throughout the entire conversation with Viehbacher. Viehbacher explained his thoughts on how he feels biotechs are simply a better model for efficiency: “There are dys-synergies of scale in this industry. As you get bigger you don’t necessarily get better. ... (Pharma) is an industry that has to reinvent itself all the time… Genzyme was an important tech investment for Sanofi, we weren’t really in biologics, we didn’t have a credible R&D base in the US. Building from scratch would have taken so long. Some of these acquisitions are not just product based but actually help you to shape the strategy of the company.”

Viehbacher explained what he sees as a big pitfall with many Big Pharmas – the inability to take risks: “What people forget about this industry – and that was particularly difficult to communicate in a big company - our business is inherently risky. If you don’t take risks, you will not advance. The question is ‘How do you manage the risk?’ That’s partly through a portfolio strategy… you need to be in multiple therapeutic areas, in multiple products. That means diversifying your sources of innovation, if you’re just betting on your own teams all the time you’re not necessarily going to come up with innovation. You have to mix sourcing of innovation from outside and from inside.”

He goes on to discuss the freedom given to biotechs versus the demands placed on Big Pharma: “You have to accept that some of the things you are going to do are not going to work out. I used to look at Regeneron, they would have Fidelity as a big investor, Sanofi had fidelity as a big investor – but it’s not the same Fidelity. And the expectations when you’re Big Pharma are buy backs on dividends. You’re a big cap company, they want you to have this predictability and sustainability of results. It became more difficult to take on risk and do innovation. In biotech there’s an assumption that this is risky and there’s an assumption that it’s going to take a while to see a payoff. Biotechs aren’t so concerned about quarterly earnings. That is one of the other reasons why I was quite happy to shift, if you really want to be involved in science and innovation you have to have patient capital and you can’t be on that treadmill of quarterly earnings. There will always be a role for biotech and big pharma but they really have to think about themselves in a complimentary way instead of a competitive way.”

How does Boston Pharmaceuticals disrupt? Well for one thing they have “no specific therapeutic area in mind” and focus on drugs targets that have already proven to have a benefit – and develop them with outside providers. Their site describes what they do well and simply: they acquire clinical stage molecules which they develop through clinical phases and then either partner and out license or keep and commercialize. The copy for the Gurnet Point Capital website strongly echoes Viehbacher’s disruptive vision: “We partner with life science leaders who have the vision and drive to transform their businesses. Those leaders are born risk-takers. Original thinkers with big ideas and bigger ambitions. Explorers who question the status quo. They are driven to succeed and are uncompromising in their quest to make things happen, even if the solutions aren’t easy or obvious.”

Michael Pellini is also a Big Pharma veteran who has transitioned to biotech. The President and CEO of Foundation Medicine, an organization that uses genetics to help select the right drugs to treat cancer patients, he and his organization are disrupting the siloed approach to cancer research to make cures happen faster and more effectively. He discusses his reasons for this disruption in a Pershing Square Foundation presentation last year.

Pellini begins: “Our aim is to democratize the precision medicine initiative and the work going on at academic centers around the US - not to be competitive with the academic centers – but let’s face it 85% of the patients in the United States never end up at Sloan Kettering, Weill Cornell or MD Anderson - they are treated in the communities around the United States.”

Pellini explains the need for what Foundation Medicine fundamentally does: “We extract information…we’re all building these databases that have to come together and they should absolutely not just come together inside my company or inside a medical center…they have to truly come together over time. (You need to combine) learning from the West Coast, Southeast, New York City, Boston, Hong Kong – because you’re going to see patients that are these snowflakes, tumors represented as snowflakes all around the world even the experts might not have seen enough of any one patient diagnosis to know exactly what to do with that patient. That issue is magnified many times over in the communities around the United States.” He emphasizes that “all data needs to be connected” and he urges the scientific community to “take the learnings from Silicon Valley.”

Moderna Therapeutics, a company co-founded by Noubar Afeyan, was given the distinction of being the #1 disruptor by CNBC last year, one of just a handful of non-tech companies in that list. Afeyan is the founder, Senior Managing Partner and CEO of Flagship Ventures, the firm that launched Moderna as well as several others. In fact, in his 30 plus year career, Afeyan has founded over 38 life science and tech startups, making him the perfect person to - know when and how NOT to start a start-up. An immigrant to the US at age 13, Afeyan credits being an immigrant as a big part of his success. He said to the Armenian Mirror-Spectator this spring: “What keeps you from innovating is being comfortable…If you’re an immigrant, then you’re used to being out of your comfort zone.”.

Two years ago Afeyan gave an inspiring talk to a group of scientists at Imperial College in London, and interestingly enough his talk was less about scientific innovation than it was about the business aspect of how to make scientific discoveries successful. Afeyan opened his talk with the affirmation that the most important innovation in the last fifty years wasn’t the internet, biotherapeutics or even genome sequencing but “startup ventures” as an entity. Afeyan makes this point: “Startup ventures are a fairly new phenomenon. When I was at MIT in the mid-1980s there was maybe one company every year of any note that was being created.”

He goes on to describe his experience of founding multiple startups, and offers the idea that startups as the way they are now will radically change. Afeyan is at the epicenter of that change with his organization Flagship Ventures: “Flagship ventures asks the question, can you think systematically about innovation, instead of doing it when it comes to you or when an opportunity is presented. Venture Labs is an institutional attempt to create first of their kind companies around technologies developed to solve a problem – not around advancement of science.”

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