Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Today’s guest on The Long Run is Vineeta Agarwala.
Vineeta is a general partner with Andreesen Horowitz’s Bio & Health fund. She invests in a variety of therapeutics and diagnostics startups.
Vineeta Agarwala, general partner, A16Z Bio & Health
Gate Bioscience, Rome Therapeutics, Rezo Therapeutics, Bighat Bioscience, Function Oncology, and Orbital Therapeutics are a few examples.
She also is a physician by training, still sees patients once a week in a cancer survivorship clinic at Stanford. That is part of what gives her an unusual ability to move from the lab bench all the way to the implementation side of healthcare. Pearl Health, Memora Health, and Pomelo Care are a few of her portfolio companies on the ‘health’ side of the house.
Vineeta is a previous guest on The Long Run from December 2021. In this more recent conversation, she and I spoke on stage at the Life Science Innovation Northwest conference in Seattle on Apr. 17, 2024.
We talk here mainly about her view of recent developments with AI for drug discovery.
Before we get started:
I’m looking for a business representative. This person will be asked to sell group subscriptions to Timmerman Report, sell sponsorship packages to The Long Run podcast, and negotiate my speaking engagements. This position will pay a base salary plus commissions. The ideal candidate is someone seeking to grow their knowledge and network in the biotech industry. Interested? Email me at luke@timmermanreport.com
Now please join me and Vineeta Agarwala on The Long Run.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
David Liu, professor, chemistry and chemical biology, Harvard University; core institute member, Broad Institute of Harvard and MIT
Today’s guest on The Long Run is David Liu.
David is a professor of chemistry and chemical biology at Harvard University, and a core institute member at the Broad Institute of Harvard and MIT. In biotech industry world, he’s a founder or co-founder of a long list of companies, including Beam Therapeutics, Prime Medicine, Editas Medicine, Chroma Medicine, and Exo Therapeutics. And that’s not the entire list.
His best-known contributions to industry include a first-generation CRISPR-Cas9 gene editing company, a CRISPR base editing company, then a prime editing company, and epigenetic editing company. But there’s a small molecule drug developer taking aim at unconventional binding sites on enzymes.
One common thread that runs through David’s career is a focus on using new tools, and developing new techniques, to advance biology. Besides the widely known advances in gene editing, he’s known for fundamental work on phage-assisted continuous evolution and DNA‐Templated Organic Synthesis that set the stage for his later work. Going back and reading some of those early papers sheds some light on what and why he did the things that came later.
In this conversation, I asked David to talk about his early life and influences that maybe aren’t so widely known among collaborators in academia and industry. We spent a good bit of time on that, before getting into more recent advances with base editing and prime editing.
This conversation was recorded Apr. 2 in his office at the Broad Institute.
Before we get started, I have a couple of announcements to make:
One, I’m pleased to announce two new Timmerman Traverse campaigns in 2024. One is for Life Science Cares with a focus on fighting poverty around the US. The next one is for Sickle Forward, a nonprofit devoted to improving newborn screening and treatment of sickle cell disease in Africa. Both campaigns are loaded with biotech leaders working to raise $1 million. For more information about who’s on the team and how to contribute, go to TimmermanReport.com and click on “Traverse.”
Second, I have a job opening. I’m looking for a business representative. This person will be asked to sell group subscriptions to Timmerman Report, sell sponsorship packages to The Long Run podcast, and negotiate my speaking engagements. This position will pay a base salary plus commissions. The ideal candidate is someone seeking to grow their knowledge and network in the biotech industry. Interested? luke@timmermanreport.com
Now please join me and David Liu on The Long Run.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
I’m thrilled to announce a new initiative to raise $1 million to fight sickle cell disease. It’s the Timmerman Traverse for Sickle Forward.
A team of 21 biotech leaders are banding together for Sickle Forward in 2024. It’s a nonprofit dedicated to improving newborn screening and treatment of sickle cell disease in Africa.
Ted Love, chairman of the board, BIO
When we hit that goal, we will secure another $1 million match to advance sickle cell disease research in the US. This makes it a global effort.
In September, we’ll gather to climb Kilimanjaro, the highest peak in Africa at 19,341 feet.
We’ll accomplish a few things along the way.
We will raise awareness of this long-neglected disease and treatments that offer new hope.
Alan Anderson, physician-scientist; executive director, Sickle Forward
We will give back to those less fortunate.
We will relish the beauty of Kilimanjaro and the Tanzanian people.
We will form deep, lasting friendships.
Who’s on the Team?
Who’s Sponsoring?
How can I help?
I’m excited about this campaign in terms of the breadth and depth of the impact it will have for people with sickle cell disease.
As Alan Anderson, executive director of Sickle Forward, puts it:
“Sickle Forward firmly believes in ensuring that every child, irrespective of their birthplace, has access to timely diagnosis and appropriate treatment for sickle cell disease. Through a combination of grant and private foundation support, Sickle Forward recently launched a bold initiative to screen 100,000 infants for sickle cell disease in Mali and Togo. This comprehensive approach, coupled with access to routine treatment, holds the potential to save lives. The funds raised through the Timmerman Traverse for Sickle Forward will facilitate a significant expansion of the screening and treatment programs across Africa, furthering our mission to make a meaningful difference in the lives of those affected by sickle cell disease.”
This expedition has potential to save many lives in the short-term, and even more by advancing research over the long-term.
Thank you for your support.
Luke Timmerman, founder & editor, Timmerman Report
The Timmerman Traverse for Life Science Cares is back for a $1 million mission to fight poverty in 2024.
This year’s team is coming together in common cause. We will bond together on a pair of spectacular hikes in the Pacific Northwest.
We will cover 20 miles of trails, with more than 7,000 feet of elevation gain, over two days in the North Cascades.
Legs will be tired.
Foreheads will be sweaty.
Shoulders may be achy.
We’ll enjoy fellowship amid some of the most spectacular scenery in North America.
Aug. 19: Hidden Lake Lookout
Aug. 20: Cascade Pass / Sahale Arm
Who’s on the Team?
Who’s Guiding?
Who’s Sponsoring?
How can I help LSC fight poverty?
Since 2021, the Timmerman Traverse has raised $3 million to break the cycle of poverty and open doors to opportunity.
These trips have catalyzed a national expansion of the Project Onramp program. The plan is to bring 1,000 interns from underrepresented minorities into biotech job opportunities by 2027.
These expeditions are a force for good. We’re just getting warmed up.
Watch this team!
“We started as industry colleagues with an aligned philanthropic goal. We finished as friends, deeply connected through an experience none of us will ever forget and all of us will work to rekindle in our lives.” — Reid Huber, partner, Third Rock Ventures
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Dylan Neel, MD/PhD candidate at Harvard Medical School
In November 2019, Sujal Shah was the CEO of a public company with two promising late-stage clinical trials underway. The company was worth more than $900 million.
A couple months later, he found himself cornered in a parking lot by an activist investor—one of a handful pressuring him to shut down and liquidate his company CymaBay Therapeutics.
“I can smile about it now, but it was easily one of the most difficult times of my professional life,” says Shah, CEO of CymaBay (now a wholly-owned subsidiary of Gilead Sciences).
At the time, CymaBay was running the key clinical trials to determine the safety and efficacy of its PPAR-delta agonist, seladelpar, for two liver conditions: primary biliary cirrhosis (PBC) and metabolic dysfunction-associated steatohepatitis (MASH). When the clinicians scoring the end of treatment MASH trial results reported worrisome pathologic findings, Shah knew it could mean the end of seladelpar and CymaBay.
Sujal Shah, CEO, CymaBay Therapeutics (now part of Gilead Sciences)
“We had a moral decision to make at that point in time—wait for more data to be analyzed or immediately halt the trial. We decided to immediately stop the study…after all we had no way simple way to determine whether or not the pathology findings were definitively due to seladelpar or not.”
The consequences were swift and severe. CymaBay had to lay off two-thrids of its employees. The stock fell by 76 percent in a day. Most experts told Shah to abandon seladelpar and move on—an investigation would be difficult and take far too long.
“I couldn’t sleep, and would lay awake at night thinking: none of this made any sense? I had to at least try to figure out what happened.”
Shah and his team at CymaBay stuck to their convictions and launched an investigation into the results—an investigation that four months later would totally exonerate seladelpar from having caused any of the atypical pathology observed.
FDA clinical holds were lifted. The trials started back up. CymaBay’s shares regained their value and more. In March 2024, Gilead acquired CymaBay and seladelpar for $4.3 billion in total equity value. Most importantly, there is a promising new treatment for PBC on the horizon.
“Patient stories were the biggest motivator for me during these difficult times, I learned that many of them had been doing well and feeling better than ever before on seladelpar—it was all the fuel I needed,” Shah says.
Trained as a biomedical engineer at Northwestern University, Shah originally thought he would become a physician, but instead pursued research. After earning his master’s degree in biomedical engineering, Shah eventually went to business school where he was drawn to healthcare investment banking.
“What attracted me was the ability to learn about the entire biotech industry, while also gaining a very concrete financial toolkit.” After rising through the ranks at Credit Suisse and then Citigroup, Shah began his search for an operating role in the industry in 2012. It was during this time that he first met the management team at Metabolex (renamed CymaBay after going public). A year later, he would join full-time as the company’s chief financial officer.
In our interview, Shah discusses the creative financial mechanism by which he took CymaBay public, lessons learned from the challenging development of seladelpar and the rationale for his management decisions along the way. He shares advice with those in biotech, stressing the importance of letting data drive decision making. Shah admits that at a certain point you just need to have faith: “Ultimately, you must believe. Believe in yourself and in others.”
Read more of our conversation below.
What initially got you interested in science or medicine?
I have always had a propensity for math and science. The intersection of quantitative skills and human biology always seemed remarkable. However, my original goal was to go to medical school and become a physician.
When that path became challenging, I really didn’t know what to do next, so I applied to graduate school [master’s program] in biomedical engineering. I found a laboratory at Northwestern using biodegradable polymers as scaffolds for tissue regeneration. I really enjoyed the research, and at the end of the master’s program could have considered staying to complete a PhD. Yet at the time I made the decision to get a job and go into industry. I didn’t see myself working in a lab for the rest of my career and wanted some real-world experience.
What was your first experience in industry like? What led you to business school and then investment banking?
In the several years after college, I didn’t have a lot of direction. I took a job at a startup company based in Pittsburgh, called Tissue Informatics. The company was a little bit too far ahead of its time. The mission was not dissimilar from what organizations like PathAI are now attempting with digitized slides and developing algorithms for diagnosis.
The company [Tissue Informatics] was growing, but when the tech bubble burst in 2000, financing dried up. Around this time, I applied to business school with the goal of changing the type of role I could get within biotech. During business school [at Carnegie Mellon] I interned at Roche with an interest in business development and had a full-time offer to work for them after graduation. I also gained exposure to healthcare investment banking and ultimately ended up taking a role with Credit Suisse First Boston when I finished my MBA.
What was your experience like in life sciences investment banking? What skills did you learn that helped you later?
As an investment banker, you gain exposure to many different areas of healthcare and within biotech, many different therapeutic areas. What attracted me to the field was the ability to learn about the industry, while also gaining a very concrete financial toolkit and exposure to capital markets. The transactional experiences in banking later proved to be vital during my 12 years at CymaBay.
The hours [in banking] were intense, but it really does drill into you discipline and a particular skillset: if you asked me to build a three-statement financial model or merger model I could probably still do it, even now! The 100-plus hour work weeks also toughen you up, which came in handy during later parts of my career at CymaBay.
I also learned that the heart of our industry is letting the science and data drive decision making. The best management teams are very honest internally and externally about what data is saying. There is no room for rose colored glasses—you have to be transparent, honest and clear-minded.
After your investment banking career, what led you to start working with Metabolex—the company that later became CymaBay?
After leaving investment banking, I was working as a consultant with several companies and a biotech venture capital firm. I was using this time to look for an opportunity to become Chief Financial Officer of a biotech company.
Eventually I met the team at Metabolex. The team needed financing (about $30 million) to keep the venture going and run another clinical study for an asset being developed for chronic gout. To be honest, raising this amount seemed like an insurmountable task given existing investors were reluctant to put any additional capital in the company without a new lead investor. In fact, I did not join the company initially because it was in such a tough financial position. Over the course of the following year, I helped them raise the money though as a consultant. By the time we pulled off this financing, I was so emotionally invested that I decided to join full time as CFO in 2013.
[What was the financing that you were able to pull off as a consultant and then CFO?]
After a year of trying and failing to find new investors, Metabolex had about three months’ worth of cash left by mid 2013. The board had pretty much resigned itself to bankruptcy. I remember sitting in my car and coming up with an idea. When I was working at Citi as an investment banker, there was a research analyst who left to join a company called Coronado Biosciences. At Coronado, they were able to raise about $20 million from retail investors—basically high net worth individuals where the average investment would typically be between $50,000 to $100,000 per person.
To pull this off, they used a group in New York called National Securities, which has a network of independent brokers. I decided to go to NYC with our CEO at the time to meet with some of these broker firms on behalf of Metabolex to try to raise $30M in funding. After hearing our story, National Securities felt they could raise us $15M. But first, we had to raise the other half from “smart money” biotech institutional investors. As part of this recapitalization, I also had to get J&J’s venture capital arm, JJDC, to forgive $16 million in a convertible note Metabolex owed them in exchange for $3 million of equity credit in the surviving company if we were somehow able to pull off the $30 million financing. JJDC agreed and we were subsequently able to raise $15M from existing investors and venture debt.
Once this happened, we told National Securities “Go!”, and they raised about $17 million within three weeks. The deal turned out to be a about $32M financing with a $52M post-money valuation—so the existing investors were heavily diluted. However the company survived, and we were eventually able to go public. The way in which we went public was quite unconventional—a self-registration form 10—but that is a story for another time.
What was the company’s early focus and what series of events led to the focus on primary biliary cirrhosis?
Before I joined the company, Metabolex had licensed the rights to a second-generation insulin sensitizer to J&J (Janssen). As part of that out-licensing, Janssen offered upfront cash, future milestones and royalties and a clinical asset in return.
Seladelpar, which is the drug that became the future of CymaBay, came from this deal with J&J.
Seladelpar is a selective and potent PPAR delta agonist. Well-known drugs like fenofibrates target the PPAR alpha isoform, which has an established role in LDL and triglyceride biology. Metabolex was originally interested in understanding if PPAR delta agonists could also be used for mixed dyslipidemia—liver disease was not even in the conversation at this point [early 2000s].
In addition to lowering total cholesterol, LDL-cholesterol and triglycerides in patients with mixed dyslipidemia, seladelpar reduced alkaline phosphatase [ALP]. Although these patients did not have ALP above the upper limits of normal, elevated ALP produced in the liver is associated with impaired bile flow [cholestasis] in patients with primary biliary cholangitis [PBC].
Our CMO at that time recognized that ALP was being used as a surrogate endpoint for potential accelerated approval in PBC and we moved forward with a phase 2 study in this indication. The anti-cholestatic and anti-inflammatory elements of seladelpar’s mechanism of action gave us hints that the drug could perhaps be useful in treating liver diseases like primary biliary cholangitis, where ALP was part of an FDA-approved surrogate endpoint.
We decided to shift our development of seladelpar from dyslipidemia to PBC. In the PBC phase 2 trials we saw striking results: clear ALP and bilirubin reductions as well as reductions in pruritus [itching], a menacing clinical symptom of PBC. This data compelled us to pursue liver disease, where there were clearer regulatory paths. Around this time [2017] I was also asked by the board to move from the CFO to the CEO role at CymaBay.
Walk us through what happened when CymaBay got a clinical hold for seladelpar in its MASH trial.
Between 2016-2017 we started generating some interesting Phase 2 data in PBC. We began enrolling patients in a Phase 3 trial of seladelpar for PBC in December 2018. At this point, we were a $500M market cap public company.
Based on our knowledge of seladelpar’s mechanism, we also decided to run a phase 2b study of seladelpar in MASH. In this study we examined measures of liver fat as a primary endpoint, but also took liver biopsies to assess NAFLD activity score [NAS] and fibrosis. Fundamentally PPAR delta drives fatty acid oxidation, in addition to its effects on reducing bile acid synthesis, inflammation and fibrosis.
We believed that treatment would lower liver fat; so, we powered the trial to detect decreases in liver fat. At the 12-week readout, it appeared that the drug did not lower liver fat significantly compared to placebo. This was a surprise to us, and the stock took a 30% hit. However, our phase 3 trials in PBC were still progressing according to schedule, and we thought that we may see an impact on NAS and fibrosis at the 52-week MASH trial readout.
In November 2019, our two pathologists scoring the MASH 52-week biopsies gave us an alarming call. They told us that they were seeing a significant number of patients with interface hepatitis or periportal inflammation—features that were not previously reported in MASH. It appeared that these pathologic features, which were present in almost 30% of the end of treatment biopsies scored, could have be associated with drug treatment.
Over the course of a weekend, we consulted with a number of hepatologists and MASH experts—nobody knew what to make of these findings. Was it possible that the drug was causing injury? Despite the biopsy findings, we were seeing reductions in liver injury markers and bilirubin levels in trial participants. As our hepatologists pointed out, the patients had no laboratory or clinical features of liver damage. The pathology findings did not match the overall clinical picture for these patients but we had no way to prove or disprove whether or not these findings were being caused by seladelpar.
We had a moral decision to make at that point in time—wait for more data to be analyzed or immediately halt the trial. We decided to immediately stop the study and call the FDA. On one hand this was one of the most difficult decisions to make as I knew it would likely mean the end of seladelpar and also the end of CymaBay. On the other hand it was an easy decision because I was never going to put patient safety at risk.
What happened?
Seladelpar was put on a formal clinical hold. Prior to this point, CymaBay was a $900M market cap company. The Street reacted to the news: our stock tanked to $1 a share, or a $100 million in market cap even though we had $2 a share or $200 million of cash on the balance sheet. We had to lay off two thirds of the company right before Christmas of 2019.
It was one of the worst times in my life. I felt that I had poured my soul into the company: it was all gone in a flash. I couldn’t sleep, and would lay awake at night thinking: “none of this made any sense?” I had to at least try to figure out what happened.
Given CymaBay had $200M of cash and only a $100M market cap, an activist investor bought 10% of the company—he wanted to pressure us to liquidate and thus make a quick return. He wrote a public letter calling for dissolution of the company and accusing me and the Board of not acting in the best interests of investors. I knew that we had to run an investigation to figure out what happened while we also considered strategic alternatives including liquidation as required by our fiduciary duties. Many experts told us it would take years to complete a proper investigation and that it would be impossible to ever learn anything definitive.
Despite the challenge of having to prove a negative, we launched an investigation into understanding the findings and whether or not seladelpar caused them. We assembled what I would call the “dream team” of hepatologists and hepatopathologists with significant experience in drug-induced liver injury [DILI]. We were conducting this investigation in the backdrop of a COVID pandemic and a group of activist investors trying to shut us down.
At this point, there were half a dozen investors calling me daily with accusations and threats. One [activist] even approached me in a parking lot when I was on my way to a meeting. I can smile about it now, but it was easily the most difficult time of my professional life.
A month before our annual shareholder meeting where the lead activist was positioning to get his slate of Board nominees to take over, we finished the investigation.
Here is what we found: every single one of the patients with what the study pathologists deemed was “atypical” pathology in NASH [including interface hepatitis] at the end of study biopsy readings had the same pathology in their baseline biopsies before they were dosed with seladelpar. The biopsy findings were totally independent of treatment. Subsequent retrospective analyses from other trials and patients have shown that between 25-30% of complex MASH patients can display this type of pathology—periportal inflammation or interface hepatitis—at baseline.
We shared these findings publicly and the stock tripled. A couple months later the FDA released all clinical holds. We had to enroll a brand new PBC phase 3 trial and raise another $150M. However, it was worth it: we had dozens of PBC patients come to us when we were on clinical hold saying: “I have never felt better than when I was on seladelpar, please don’t give up.” This was the biggest motivator for me during these difficult times—it was all the fuel I needed.
What are some important lessons learned during the difficult times at CymaBay?
There are many lessons I learned in my time at CymaBay: let the data drive your decision making, hold patients and unmet need as your guiding light, and do not be afraid to disagree with the “experts” if you have conviction.
When the clinical hold on seladelpar was released, the activist investor who was pressuring me to liquidate CymaBay gave me a call.
He effectively said: “Sujal I have got to hand it to you. You stuck to your convictions and you and your team are the right people to lead the company.” During the investigation period, I answered every call from every activist investor. The minute you stop answering, you add fuel to the fire. In my role as CEO it was my duty to take these calls, treat everyone with respect (no matter how challenging) and stick to our internal convictions and plan
Dylan Neel is a final-year MD/PhD candidate at Harvard Medical School. He earned his PhD in Immunology, where he studied innate immune mechanisms in neurodegenerative disease. During graduate school he worked part-time at Vida Ventures and is the Editor of the Biomarker Substack. He graduated summa cum laude from Harvard College, with a degree in neuroscience.
David Shaywitz
Pharma colleagues: does this complaint sound familiar?
This company is too bloated. It’s too slow. We have all these layers and layers of bosses where leaders at the top would decide on the strategy, and then it would just trickle down to the people who actually did a lot of the day-to-day work…. I am 10 layers below the CEO and I have ideas for how this company could be better, but they’ll never be heard because there are just so many people above me who are making those decisions.
According to Wall Street Journal reporter Chip Cutter, it’s exactly what newly installed Bayer CEO Bill Anderson heard when he joined the company last June and embarked on a listening tour.
A seasoned pharma veteran who was previously CEO of Genentech and then CEO of Roche Pharmaceuticals, Anderson had become “disillusioned over the years by the many approvals and endless rounds of meetings required to get anything done at large companies,” Cutter reports.
Bill Anderson, CEO, Bayer AG
Anderson heard the same gripes at Bayer. He was told that “launching a new product takes years instead of months,” Cutter writes. “Disputes between departments take too long to resolve. He learned that company rules and procedures fill 1,362 pages, he said, ‘longer than War and Peace, and a lot less exciting.’”
At the same time, Cutter also points out that “Modern corporate hierarchies have persevered because they largely work and attempts to subvert them haven’t.”
Nevertheless, Anderson is trying to “rewire” the company culture, focusing on “fewer bosses, fewer rules.” The plan – built around a principle Anderson calls “dynamic shared ownership” — involves self-assembling groups of employees deciding on priorities, and working together to accomplish projects for 90 days, and then repeating the self-assortment process.
The idea, as “The Journal” podcast co-host Ryan Knutson explains, is “to empower employees to make big decisions without having to get the approval of layers and layers of management.”
To guide the process along are leaders/advisors, in roles called “’visionaries,’ ‘architects,’ ‘catalysts’ and ‘coaches,’ positions focused on longer-term strategy and guidance-giving,” according to Cutter.
It’s a radical departure from the usual way of conducting business in large companies, Anderson recognizes. “The first go round, it’ll be a little messy,” Anderson says, “but that’s okay because the thing is, the thing we’re comparing to is a system that doesn’t work very well. So this is the thing. We don’t actually have to be that good to beat the current system.”
Cutter describes an example of the new way of working, focusing on a self-assembled team focused on expediting the launch of a new line of vitamins.
The team didn’t spend time creating a polished PowerPoint presentation to show company higher-ups. Executives were instead periodically invited to the Garage [a dedicated innovation area] to look at designs and ideas on the walls and offer any suggestions.
Typically, the timeline for a product launch takes into account the multiple layers of approval needed for each stage of the rollout. If eight people gather from different departments, each of them would spend much of their time getting their individual bosses to sign off on an idea.
“They’ve got to convince eight people,” Anderson said. “And when one or two of them says, ‘No, no, actually, I like this better,’ then the other six have to go back and convince their managers about the new plans.”
Not any more, Anderson said, gesturing with cupped hands and making the sound of an explosion.
The team “hit its mark,” Cutter writes. “Bayer’s new line of One a Day vitamins, packaged in a palette of pink and purples, went on sale in March, a year ahead of schedule.”
As Cutter observes, “Anybody who has gotten an early taste of this, a lot of former CEOs, management thinkers, and others, they are all captivated by what happens here because Bayer is touching on problems that are so familiar throughout corporate America and so if this works, it could be dramatic.”
Whether or not Anderson’s solution sticks, he is unquestionably getting at a real problem in large corporations: the tendency of entrenched bureaucracies to inhibit agility and dampen innovation (or, to put a somewhat finer point on it: to crush the souls and extinguish the spirit of often highly innovative employees drawn to industry by the desire to have an impact and make a difference).
This challenge also is highlighted in my favorite management book: former Pixar CEO Ed Catmull’s Creativity Inc., as I’ve discussed here. (An expanded edition was recently released, as Catmull discussed with the WSJ here.)
Ed Catmull
As Catmull sees it, “full creative engagement” requires us to “uncouple fear and failure – to create an environment in which making mistakes doesn’t strike terror into your employees’ hearts.”
This sounds great as a mantra, Catmull acknowledges, but in practice, managers also are typically told “the success of our enterprise depends on your group doing its job on time and on budget.”
Consequently, he says, if managers “have to choose between meeting a deadline and some less well-defined mandate to ‘nurture’ their people, they will pick the deadline every time.”
Managers, Catmull explains, “typically want two things: (1) for everything to be tightly controlled, and (2) to appear to be in control.”
And now we get to the crux of the issue:
But when control is the goal, it can negatively affect other parts of your culture. I’ve known many managers who hate to be surprised in meetings, for example, by which I mean they make it clear they want to be briefed about any unexpected news in advance and in private. In many workplaces, it is a sign of disrespect if someone surprises a manager with new information in front of other people. But what does this mean in practice? It means there are pre-meetings before meetings, and the meetings begin to take on a pro forma tone. It means wasted time. It means employees who work with these people walk on eggshells. It means that fear runs rampant.
I suspect most pharma veterans will recognize these behaviors. (See also Safi Bahcall’s Loonshots – my WSJ review here, and additional biopharma discussion here.)
The question is whether these patterns of behaviors are inextricably tied to the smooth functioning of massive sprawling corporations, with their need for alignment, their reliance on hierarchy, and their instinctive prioritization of tight control to drive consistency, efficiency, repeatability, and standardization?
One alternative, presumably, might be a more trust-based cultivation of originality and creativity that Catmull champions.
There are other challenges related to company size: in a smaller organization, the relationship between your individual contribution and the mission and success of the company is much easier to discern, and often immediately palpable. But in massive, incredibly complex companies, most of the time, your sphere of control can feel far removed and often detached from the overall trajectory of the company as a whole. Hence the tendency to keep your head down and focus exclusively on your specific deliverables, which you rely on to maintain your bearing.
These stark contrast between the cultures of small and giant companies was recently highlighted by startup CEO Noam Bardin (see here), whose company, Waze, acquired and absorbed by Google.
“What seems natural at a corporation,” Bardin said to WSJ reporter Christopher Mims, “multiple approvers and meetings for each decision—is completely alien in the startup environment: make quick decisions, change them quickly if you are wrong.”
Bardin also described to Mims the differences in incentives he noticed before and after the acquisition. “Before the sale,” Mims reports, “everyone’s financial interest was aligned with the performance of the company’s products. Once Waze was a subsidiary, getting ahead was all about getting promoted.”
Adding to the challenge, employees in large companies typically operate in the disorienting miasma of corporate buzzwords and platitudes, constantly repeated.
Terms like “innovation” tend to be invoked so often, and applied to the most pedestrian activities, that they quickly lose all meaning in what can feel like a “Successories”-inspired world. Minor accomplishments, particularly those in line with high profile management initiatives, receive outsized recognition, and highly burnished “success stories” are celebrated and socialized.
One result of all this is a remarkably hermetic environment within large companies, sort of an alternative, self-consistent universe with its own rules and customs, sustained in large measure by the established structures and defined hierarchy. Truth is what your manager, and his or her manager, says it is, and you challenge these orthodoxies at your peril.
First, I’d argue that big companies lean into process and control because it feels more reliable and scalable than creativity. Indeed, Catmull’s core thesis, as he tells WSJ reporter Emily Bobrow, is precisely that there is not a “formula” for success, and you need to reinvent yourself creatively each time.
As I’ve frequently noted, this is the exact antithesis of what anyone in large pharma companies wants to hear or is prepared to hear. Instead, pharmas characteristically overindex on perceived “success factors,” and may doom future projects by applying with excessive rigor the putative lessons learned from previous blockbusters.
Second, big pharmas will continue to search for tools (including potentially AI) that essentially enable them to leverage their size and process, and industrialize innovation. This basically means they seek to use brute force to produce superior medicines. So far, based on the high fraction of pharma products born elsewhere, this hasn’t proved especially successful, but the hope is always there.
Third, since I don’t think the cultures of most big pharmas are likely to change meaningfully, I anticipate we will continue to see the pharma version of “the big sort,” the demographic self-assortment that leads to the geographical clustering of like-minded people (e.g. progressives moving to blue states and conservatives moving to red states). Drug developers who find comfort in process, control, caution, and stability will migrate to and remain in large pharmas, while those who prefer living a bit out over their skis will choose smaller biotechs – provided market conditions enable early-stage companies adequate opportunity to find their footing.
Most of the top creative physician and scientists I know in drug development are now working in small biotechs – often after previous roles in large pharmas. We have seen a long-term trend of talent migration from large pharma to startups – see Luke’s column from September 2017 on “How’s It Going for Big Pharma Vets at Startups?”
Fourth, remember that while smaller biotechs may be more innovative (or at least embrace more risk), most drug development efforts fail; even with the most creative people in the most supportive environment, science is incredibly, unfathomably, brutally unforgiving. The single biggest advantage big pharmas have (see here) are the resources to remain in the game long enough to absorb the many inevitable failures – and then run with the very rare success, whenever it arrives.
Even the most innovative small biotechs struggle to remain independent, and are generally acquired by big pharmas; Genentech, memorably, was fully acquired by Roche in 2009.
Pixar, incidentally, was no different. As Pixar Chair and majority shareholder Steve Jobs told Catmull when Jobs was contemplating a sale to Disney, “Pixar is a yacht. But a merger will put us on a giant ocean liner, where big waves and poor weather won’t affect us as much. We’ll be protected.”
The challenge, of course – for Genentech, Pixar, Waze and others — is sustaining their distinct creative culture in the context of the larger corporation.
Not surprisingly, as Bruce Booth of Atlas Ventures has described, a lot of top R&D talent tends to recycle into the startup ecosystem after an acquisition. Given the challenges of maintaining (much less retroactively establishing) a culture within large pharmaceutical companies that truly supports creativity, let’s hope market conditions sustain and foster the virtuous cycle Booth describes, as this may most effectively enable the continued, essential cultivation of genuine innovation in the life sciences.
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Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Today’s guest on The Long Run is Valerie Daggett.
Valerie is the founder and CEO of Seattle-based AltPep.
Valerie Daggett, founder and CEO, AltPep
This company is working on an unusual diagnostic-and-therapeutic strategy against Alzheimer’s disease.
I wrote about the company in June 2023 when it raised $53 million in a Series B financing that included Section32, Alexandria Real Estate Equities, and Eli Lilly among others.
At the time, I wrote:
What if you could screen everyone at age 40, with a simple blood test, that could detect trace amounts of the toxic forms of amyloid-beta protein that build up over 10-20 years in people with Alzheimer’s?
What if the blood test had 99 percent sensitivity and specificity to the toxic forms of the protein structure, ignoring normal forms? What if you could go a step further after a positive early diagnosis, and give a treatment that binds the same way, but is optimized to clear out those misfolded proteins before they start bunching up into plaques that damage neurons to the point of no return?
This might sound like daydreaming in Alzheimer’s diagnosis and treatment, but Seattle-based AltPep is imagining such things and has secured $53 million in Series B financing to pursue its plan.
Valerie is a professor of bioengineering at the University of Washington. She has been on the faculty there for 30 years.
Her academic research has been building, and building over time, pointing toward this moment in which her team can make peptides that are so exquisitely able to distinguish toxic forms of amyloid-beta protein from the garden variety. They can also capture and remove those proteins.
In this conversation, Valerie describes how her research evolved in this direction, and why she decided to continue working on it in the business world to see if can fulfill its potential for diagnostic and therapeutic purposes.
Now please join me and Valerie Daggett on The Long Run.
Luke Timmerman, founder & editor, Timmerman Report
Reporting this morning from Tanzania.
I’m feeling joyful and grateful.
My latest biotech team wrapped up another $1 million Timmerman Traverse fundraising campaign for the Damon Runyon Cancer Research Foundation. All 20 members of the team reached the summit of Kilimanjaro, the highest peak in Africa at 19,341 feet.
We raised awareness of Damon Runyon’s national network of brilliant, brave and bold young scientists. We raised significant funds to support them. We forged meaningful friendships on the trail.
We cried. We laughed. We sang. We danced. We hugged. We marveled at the night stars. We were in awe of the strength and hospitality of our Tanzanian hosts.
Some people faced challenges on the trail like never before. Many had to dig deep.
These mountaineering programs have now catalyzed the biotech community to give back $8.9 million since 2017. More than 120 people have accepted the challenge and participated in these experiences around the world. About 10,000 people have given at least once to one of these campaigns. Many people are giving over and over.
The Timmerman Traverse campaigns are tapping into something deep and meaningful.
The desire to give back to those who are less fortunate.
The desire for physical challenges.
The desire to experience natural beauty.
The desire to form strong, lasting friendships.
Ultimately, it’s about being part of something much bigger than one’s self.
I’m feeling the fire in the belly. I’m hungry to make an even bigger impact. This campaign with Damon Runyon Cancer Research Foundation is the start of a big year.
This year, I’m challenging myself to step up to a new level, leading not just one, but *two* more biotech community expeditions for worthy causes.
The first is the Timmerman Traverse for Life Science Cares. That team is fully recruited and preparing for a magnificent pair of day hikes in the Pacific Northwest in August.
This team will raise $1 million to fight poverty in the United States. This program is now entering its fourth year and has already raised more than $3 million to fight poverty in the US since 2021. I’m proud of the impact this program has had, and the ripple effect it is having.
This program has already given birth to an initiative that’s creating 1,000 biotech industry internships for young people from underrepresented minority groups around the US. And we’re still in the early days. Watch for an announcement of the Timmerman Traverse for Life Science Cares 2024 team in March.
The second expedition is the Timmerman Traverse for Sickle Forward. This team will go back to Kilimanjaro in September, in conjunction with National Sickle Cell Awareness Month.
This will be another $1 million campaign to raise funds to expand newborn screening of sickle cell disease in Africa. Newborn screening can prompt the kinds of early interventions that save lives. We’re talking about catching sickle cell early, so infants can go on prophylactic antibiotics, anti-malarial medications, or have access to cheap, generic hydroxyurea. These are practical interventions in low-resource settings.
We also have a partner willing to make a $1-for-$1 match to amplify sickle cell research in the United States. That means this campaign has the potential to raise $2 million to fight sickle cell disease and uplift people around the world with this long-neglected malady.
I’m not doing this alone. As the old African proverb says, if you want to go fast, go alone; if you want to go far, go with a group.
This campaign for Sickle Forward is being led by three co-chairs.
Ted Love, chairman, BIO
All three of us will climb Kilimanjaro with the full team in September.
It’s important to add that Eric Murphy will be with us. Eric, the lead guide for Alpine Ascents International on Kilimanjaro, has worked with me on all three campaigns on Kilimanjaro since 2019, plus another trek to Everest Base Camp.
His unparalleled knowledge of the mountains, clear communication, patience, and trusting partnership with local guides and crew are what make these large-scale expeditions possible. He’s a great friend.
Alan Anderson, physician-scientist; founder, Sickle Forward
My task now is to recruit a few fellow sickle cell disease warriors from the biotech community.
If you — or your company — is willing to step up and make a major contribution to help children in Africa live longer and healthier lives, please see me or Ted or Alan.
I can provide you with an invitation with all the details to get started.
Let’s show the world we can come together and take action against poverty and health disparities.
