How Vitae Tries To Provide An Optimal Environment For Innovation

One of the best things about having time to sit down with a company's executive team and discuss matters such as pipeline and business strategy at leisure is the chance to intersperse more philosophical questions that address how a company views itself and the work environment it tries to provide.

In meeting a few weeks ago with the executive team at Vitae Pharmaceuticals near Philadelphia for a profile in "The Pink Sheet," I got more information than I could process on the firm's structure-based drug design process, the genesis of its proprietary Contour technology platform and its plans for pipeline assets in indications such as chronic kidney disease and acute coronary syndrome.

Vitae Pharmaceuticals CEO Jeff Hatfield

But as I spoke with CEO Jeff Hatfield, CFO Tina Fiumenero and Chief Scientific Officer Richard Gregg, all of whom came to the clinical-stage company from Bristol-Myers Squibb, I wanted to ask about the best environment for innovation in drug discovery and what precisely the term "biotech" even means in 2013, if such a definition can be nailed down.

As Hatfield explained that he brought in Gregg after initial CSO and company co-founder John Baldwin retired, he noted both the depth of Gregg's Rolodex and the fact that he had led discovery in all areas at Bristol. Therapeutic agnosticism is important for a company that wants to go where its technology takes it. Hearing Gregg talk about Vitae's quicker, streamlined decision-making and its speed in drug discovery against challenging targets, I posed the question: "Coming from big pharma, would you say it's necessary to leave big pharma if you want to innovate in drug discovery?"

Vitae CSO Richard Gregg

Gregg's response to the somewhat loaded question is a bit on the cautious side, but still interesting.

"I think that one does not have to leave big pharma but it is easier [to innovate] in a biotech environment. It’s not that big pharma can’t [do it] but with a lot of the bureaucracy and decision-making processes, they make it difficult to be truly innovative there. I’m not going to say it’s impossible, but it’s easier in biotech," he said.

Hatfield then elaborated on the innovation topic: "I think there’s an awful lot to the culture and environment that people work in ... I don’t think the scientific talent is different in either direction - I don’t think it’s better in big pharma, I don’t think it’s worse in big pharma. What is really different is the culture that exists between a large organization, whether it’s in pharmaceuticals or manufacturing Twinkies, it doesn’t matter, big organizations have an organizational behavior, a culture, that by necessity is more structured, more controlled, and in a small organization, that’s much less the issue."

Culture is a big part of what defines biotech, in 2013 as in 1999, the CEO added. But does Vitae, with its focus on small-molecule drugs for primary-care indications, really fit the definition of biotech?

"Everybody has a slightly different definition of biotech," Hatfield said. "Yes, we do view ourselves as biotech, because we are innovative and I think that's a better essence of what biotech is supposed to represent, not whether it is small molecule or large molecule. It's pursuit of innovation to make a difference in the world."

But, besides its technology, what makes a company like Vitae innovative? Hatfield thinks getting buy-in from the ground-floor level R&D team is a good place to start. In other words, innovation comes from motivation, which may stem partly from comfort level.

"When we were getting this company going [it was founded in 2002, and Hatfield signed on as chief in 2004], I asked a group of bench scientists to define the culture. I said ‘tell me the environment you want to work in.’ And so they did, and it was not management-driven in the slightest bit. They came up with five principles of what they wanted the focus to be," he explained.

Those five tenets selected by the bench scientists themselves in 2006 as the company's modus operandi? Not surprisingly, the first was innovation - to create rather than copy. Next, they wanted to be evaluated on the basis of success, not the amount of activity, on helping to produce the right compound, rather than just a lot of compounds.

As Gregg alluded to, a third important value for the R&D team was quick decision-making, which the group called "sense of urgency." The scientists made clear they didn't want to hear about committees being organized to ponder the latest idea. They also wanted a teamwork-driven environment in which the chemists and biologists communicate directly and trouble-shoot together.

Finally, easier said than done, they wanted a fun place to work. Which is about as easily defined as what biotech means in 2013. But on the other four measures, the results to date suggest that Vitae may be living up to its own chosen values. Whether that proves to be a lucrative formula remains to be determined.

GSK's DPU Scoreboard: Three Fewer, Four More -- But That Misses The Point

It wasn't a bad pass rate for GSK's biotech-like discovery performance units: 35 out of 38 survived their three-year investment review cycle, completed before Christmas last year. Of those, six got increased funding (20%), and five got less -- they must be on a watch-list.

But overall this process wasn't, apparently, about culling DPUs. Sure, three may have fallen by the wayside, but four new ones were born. And yet all the cost and efficiency goals for R&D are nevertheless being met, claimed CEO Andrew Witty on a webcast annoucing full-year 2011 results. The overall discovery budget is unchanged. The company's cost-per-asset is falling, its R&D rate of return is expected to reach 12%, up from 11% in 2010, and, yes, you guessed it, the pipeline is 'unrivalled'.

Indeed, Witty was keen to draw attention away from the DPU scoreboard ("it's not the story," he told us) and instead onto something far less satisfyingly quantitative: culture. "The story is a new culture created within GSK." All about individual accountability, greater capacity for scientists to communicate with each other, including across disciplines (so increasing the chance of that 'eureka' moment) and more opportunities for researchers to fulfil their potential.

So came the oh-so-human story of Andrew Benowitz, promoted from bench chemist to DPU chief within four months. He was one of those who pitched an idea to the DPU investment board (referred to internally as the Dragon's Den) and not only got it funded, but also got to lead the new DPU that now houses it. (No, we don't know what the idea is, yet: there's a DPU deep-dive for analysts on March 29.)

Good for him. And good for GSK, frankly, which, alongside its major efforts to diversify away from selling branded pharmaceuticals to western payers, reminded us today that R&D is the "core value-creator of the company", one it's aiming to "bring back to life".

The resurrection won't, it seems, benefit Europe. Pricing pressures and access delays mean UK-headquartered GSK won't be designing new drugs specifically for Europe "in the way we used to do," said Witty during Q&A. "We’ll still register drugs for Europe," conceded Witty (who is also president of EFPIA, the European industry association). But GSK's decisions on which comparator to use and where to do trials "will be driven more by those markets that appear to want the product," Witty declared.

Are you listening, European policymakers? Or do you just want another Sandwich?

image courtesy of flickrer's Jinx!

With New Center, New York Aims for Genomics Leadership

Today, 11 of the city’s academic medical centers, along with New York City and two industry partners, Roche and Illumina, announced the formation of the New York Genome Center. Backed by a sturdy $100 million in committed financing from sponsors, with goals of raising another $25 million and employing 550 people within five years, it has ambitious plans. Beginning in February 2012, it will be offering revenue-generating sequencing and CLIA-based laboratory services, as well as opportunities for inter-institution collaboration, and training programs in bioinformatics and other cutting-edge biotech disciplines. Down the road, it seems intent on getting involved in other kinds of activities that pave the way for faster public acceptance of genomics technologies.

Those involved read like a who’s who list of New York’s scientific and biotech worlds: Welsh, Carson, Anderson & Stowe, Columbia University, and top officials of Cold Spring Harbor Laboratory, Cornell Medical College, The Jackson Laboratory, Memorial-Sloan Kettering Cancer Center, Mount Sinai, NYU School of Medicine, The Rockefeller University, North Shore – LIJ Health System, Venrock, Stony Brook University, and The Simons Foundation. And then of course, there’s the pharma partner, Roche, with more pharma companies hopefully to follow, says Nancy Kelley, the attorney who co-founded the center and is its executive director.

The idea for a collaboration germinated from talks beginning in August 2010 between Kelley and Tom Maniatis, one of the world's top molecular biologists and entrepreneurs. The process came together relatively quickly, says Kelley, who, perhaps not coincidentally, is a Bostonian like Maniatis. Kelley is moving to New York and Maniatis recently became chairman of the department of biochemistry and molecular biophysics at Columbia University. In part, the timing was right, as local scientific and health care leaders realized that they were falling behind other regions as centers of innovation. “We are poised on a revolution in genomic medicine and New York has the strongest science in the world, but it is almost weakest in grant and sequencing activities,” she says. “These institutions are at risk of ceding leadership in a huge industry.”

As for industry, in addition to the fees Illumina and Roche have paid to play, Illumina is supplying the sequencing equipment—giving it a high profile position in a region with lots of multi-ethnic subjects to draw from. And Roche, with one of its two major U.S. R&D sites based across the river in Nutley, NJ, is eager to replicate in New York some of broader regional biopharma initiatives ongoing elsewhere. The effort to sign on Roche also may have been helped by connections (speculative but quite possible); Marc Tessier-Lavigne, president of The Rockefeller University and a board member of the new consortia, was CSO of Genentech until early 2011.

Unlike some of its Big Pharma brethren, Roche hasn’t made any splashy new-model alliances with academia, but has tended to stay with low-key, smaller deals. And though it has made overtures to cut R&D spend, it hasn’t undertaken the same kind of big reorgs as Sanofi, AstraZeneca, and Pfizer. “As a lot of big pharma companies move their R&D operations to Boston, we have chosen to remain in Nutley,” Jacques Banchereau, SVP, DTA, head of inflammation and virology, and CSO at Roche Nutley, told an audience of several hundred at a ceremony announcing the consortia; Banchereau too has recently changed positions, joining Roche last year from the Texas-based Baylor Institute for Immunology Research, which he founded.

As a die-hard New Yorker, it’s good and timely to see NY academic institutions, local government, and industry finally get their act together -- or at least make a start. They’ve had a history of infighting and competing, with efforts to come together collapsing. Nor has the city government been terribly supportive, focused as it is on financial services, fashion and media. (Given New York’s reputation as a place where start ups get born, funded, and then flee, it’s no surprise that the local biotech Vivaldi Biosciences, co-founded more than three years go by Mount Sinai Medical Center scientists, has made a splash because of its decision to keep its headquarters in New York, although its key venture backer Bay City Capital is based in San Francisco.)

Not that New York hasn’t already taken some steps to stake out a regional claim on biotech: the new East River Science Park, with laboratories and corporate space designed specifically for life sciences companies is fully leased, including at least two big pharma tenants, Pfizer and Lilly (Kelley previously was an SVP at Alexandria, which developed the ERSP). And Pfizer has pulled together a consortium of seven New York academic medical centers as part of its expansive Centers for Therapeutic Innovation R&D network – although word has it that proposals initially selected in New York came from a few of the participating institutions, not all, as originally hoped.

Plenty remains unsettled – not least the location and capacity of the new laboratories. Trickier may be figuring out how data will be shared and intellectual property protected—issues that are under discussion but not yet resolved and are key challenges for other kinds of life sciences consortia. And trickiest of all may be keeping many big and ambitious egos happy; the institutions involved are building their own programs in the same space as NYGC. The deal is in its early days and may work out dandy, but likely faces similar challenges as do other broad industry collaborations.

image from flickr user hjjanisch used under a creative commons license