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Exclusive Life Science Feature Examined from multiple angles, the three companies illustrate the essential capabilities, strategies, and stages small enterprises must master to discover and develop unique therapeutics for the industry's innovative portfolio, despite all the obstacles. Overcoming hurdles in funding, clinical development, manufacturing, and many other areas, the companies teach valuable lessons in how to survive, grow, and bring potential breakthroughs to the world of medicine. Many other companies may deserve coverage under the definition of "unique therapeutics," however impractical it would be to include them all, and many others may claim membership in the elite club of micro-innovators. But the key, definitive point here is this: The featured companies discovered the entities they are now developing, rather than licensing or acquiring them. This article also excludes companies that have reformulated drugs, combined them, or retrofitted them with new delivery technologies. These three companies have chosen the toughest possible route in the life science industry: taking an innovative path from the earliest stages of research on through the entire course of product development. I interviewed the CEOs of micro-innovators Sarepta Therapeutics, Melinta Therapeutics (formerly Rib-X), and Advanced Cell Technology (ACT). Sarepta has been in the news often for its Duchenne muscular dystrophy (DMD) drug, mainly concerning whether it will beat the competition, a GSK drug, to market. Melinta has bravely strode into the almost abandoned field of antibiotics with a product based on Nobel-winning research into ribosomes. ACT has pioneered a unique line of human embryonic stem cells for treating age-related macular degeneration (AMD) and other conditions. From the three companies' collective and individual experiences, a set of tenets emerges, which I have framed as imperative responses to the conditions such companies typically encounter. Like steps in a staircase, the tenets conform to a rough sequence that raises a company from the idea stage to a fully functioning business equipped and prepared to take a product through development. The steps generally range from initial management and funding through proof-of-concept (PoC), clinical development, and regulatory review. BUILDING IN BEST PRACTICES There was an old scientist who lived in a shoe — a tightly laced refuge from the world, where all incoming funds for the scientist's new company went into his lab. No taxes. No insurance. No administrative expenses. It was a wonderful fantasy land, but of course it was bound to collapse unless the scientist awoke to the realities of business. This sounds like an extreme and unlikely story even as I write it down, but in fact I've witnessed it or its close equivalent many times. In fact, I may have spotted a corollary: the more original the research, the more isolated the scientist-founder from commercial reality. The point here is not to teach an entire course in business management but to draw lessons from experience. Among the basic elements that can determine a company's fate is the quality of its leadership — a combination of board members, scientific advisors, and top executives. Much praise is heaped upon wearing different hats in entrepreneurial environments, but in companies formed to conduct original drug development, each of those functions should be filled by relevant experts. Unfortunately, it seems few companies get it right from the beginning. All of our featured micro-innovators have gone through multiple management turnovers. One was as recent as April, 2013; Melinta, founded in 2000, is now on its third CEO — Mary Szela, who succeeded Mark Leuchtenberger after his three-year tenure, and after she had briefly served as board chairman. But the company, whose cofounder is Nobel laureate Thomas Seitz, had taken a long time to meld science and business. Arguably, although no one can doubt the primary importance of a company's scientific leaders, much of their value may be, in curiously apropos syntax, effectively wasted under effectively ineffective management. It is hard to put specific blame on the previous chief execs, who generally received good reviews at the time. But for well more than a decade, the company had not met its main goal of a successful commercialization. Leuchtenberger represented a culture change from the previous CEO and cofounder, Susan Froshauer, a scientist who retained her position as CSO upon his arrival. He helped focus the clinical program on key development targets for commercialization. Szela was a further leap in the same business-oriented direction. Leuchtenberger had run a couple of small biotech companies that never achieved an approved product. Szela is from Abbott, where she helped launch Humira. Her appointment signals a hardened commitment by the board to get on with the commercialization of Melinta's lead product, eteplirsen. Another company languished for years in a kind of technological limbo, plagued by a lack of management focus on specific development targets. "Sarepta was not doing the critical path activities such as manufacturing, long-term animal tests, or study design, so there was some skepticism of its PoC data and whether its product candidates could be brought to fruition with the management teams in place," says the company's president and CEO, Chris Garabedian. Consequently, he says, Sarepta was failing to land a key partnership or advance any development program. Once it turned its focus to DMD, and after Garabedian joined as CEO in 2011, the company restored trust among investors and potential partners, helped by his prior industry experience at Celgene, Gilead, and Abbott. Garabedian also continued to rally the company around a single development program. Gary Rabin, CEO of ACT, spent some of his first years on the job cleaning up legal entanglements left by the previous manageDecember 2013 LifeScienceLeader.com 27