Stirring the Pot Once in a While Doesn’t Hurt, and It Could Help Biotech Break its Malaise

Xconomy National — 

Listen to enough biotech industry leaders talk in public, and you’ll hear a lot of carefully scripted comments. Everyone can list off their corporate milestones on a PowerPoint slide, and utter some politically correct platitudes about novel technology, helping patients, having a “good working relationship” with the FDA, constructive partnership talks.

Blah, blah, blah.

Rarely do you see an executive really willing to stir the pot. This can be risky (look at Yahoo CEO Carol Bartz), but if more people were willing to break out of their “let’s not offend anybody today” communications rut, the biotech industry would be better off and would enjoy a broader following in the business world.

This has been on my mind for some time, but especially in the past few weeks since I wrote a BioBeat column which took Seattle-based Dendreon (NASDAQ: DNDN) to the woodshed. That column generated way more readership than I thought it would, but curiously, far fewer published reader comments—only eight. Yet privately, at networking event after networking event, and in my e-mail inbox, I’ve gotten at least five times as many “attaboys” from readers. These people—including many industry leaders—all want to express privately that Dendreon screwed-up big time, and it was about time someone stood up and forcefully said so. Yet they are afraid to say so in public.

This past week, the sheer timidity of public discourse in biotech popped up again. It came when Vertex Pharmaceuticals CEO Matt Emmens dared to challenge an analyst with Morgan Stanley at his own firm’s investment conference, probably right in front of his bosses, in New York.

Here’s what Emmens had to say, as first reported by Peter Loftus of Dow Jones, and later picked up by FierceBiotech.

“Do you understand this company? I don’t think so,” Emmens said on stage to Morgan’s David Friedman. “By what I read, I don’t think you understand our company. I’m going to do the best I can to prove you wrong again and again, and it’s been fun, but when does it stop?”

It should be noted that the tone of this exchange, when I listened to the audio, sounded like one of gentle (but firm) ribbing from Emmens. It sounded like he was trying … Next Page »

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6 responses to “Stirring the Pot Once in a While Doesn’t Hurt, and It Could Help Biotech Break its Malaise”

  1. Luke,
    I agree with you entirely. I think you and your readers will find that the book Pharmaplasia(TM) and blog have taken the pharmaceutical industry to task while also trying to provide solutions and recommendations for change.

    Unfortunately, those who could make the necessary changes have not intention of compromising their executive position and have sufficient financial resources to weather getting fired (or quitting). The rest are just trying to hold onto their jobs.

  2. “If people are too shy to stir the pot, it can make for a pretty bland stew.”

    And very likely an inedible stew with no nutritional value at that…

  3. I think the reticence to call others out also has to do with the oppressive failure rate in biotech. You do the same thing for a decade, spend a few hundred million of other people’s money, then fail. This is the norm, with only about 18% of drugs entering human trial seeing FDA approval.

    Saying executives should be more aggressive for calling out stupidity is fine, but that’s awfully hard to do in practice when the average CEO is batting below the Mendoza line.

    As for criticizing the FDA, well, have you met Richard Pazdur? Only people who don’t have any desire to ever get a drug approved can dare criticize publicly that group.

  4. David—good point about the failure rate. I realize there are all kinds of risks to being outspoken, so execs need to pick their shots.

    I know what you mean about Pazdur at the FDA. That’s why people who are a couple steps removed, like VCs or public investors, probably need to be the ones to challenge FDA. Or maybe columnists!

  5. R. Jones says:

    The executives, investors and Xconomy are ignoring the elephant in the room. Biotechnology is better described as bio-business. Light on the technology and heavy on the business. Your link to LifeSci VC tells the story: Recovering scientist turned early stage VC, A biotech optimist fighting gravity.

    Recovering scientist? Working as an honest scientist is a tough job. Working as an optimistic executive and/or investor is the way around the harsh cruel world of research. Unfortunately, working around that harsh cruel world has produced an industry heavy on business, light on technology.

  6. nanostring says:

    Wait, what? Never expected such piece from Xconomy, the most non-abrasive tech blog there is…