What’s it take to build a successful biotech in New York? Teamwork, perseverance—and perhaps getting Roy Vagelos, the longtime Merck CEO, to head your board of directors.
That was just one of the many takeaways from our latest biotech event, “New York’s Life Science Disruptors.” The packed house at the Alexandria Center for Life Science last Thursday got a candid, up-close look at some of the key figures trying to shape biotech in the Big Apple: from startups, to academics, to investors, to one of the top R&D chiefs in the business.
How did the city’s academics put ego aside to form the New York Genome Center? What has Seattle’s Accelerator Corp. been seeing out of New York biotech since opening up an office here? How did Regeneron Pharmaceuticals (NASDAQ: REGN) come from a couple of Queens kids playing softball? Those questions, and many more, were answered on Thursday night.
Big thanks to our speakers and moderators: Regeneron chief scientific officer George Yancopoulos; New York Genome Center CEO Robert Darnell; Kadmon CEO Sam Waksal; Acorda Therapeutics CEO Ron Cohen; Harris & Harris Group managing director Misti Ushio; Accelerator CEO Thong Le; and CNBC biotech reporter Meg Tirrell.
Thanks also to our event host Alexandria Real Estate Equities, and our sponsors: Halloran Consulting Group and Guard Dog Brand Development.
A tip of the cap as well to Keith Spiro of Keith Spiro Photography for the photos (more of those coming later this week).
With that, on to some takeaways from a fun night in New York City.
1. Genomics is so daunting, it made New York institutions collaborate.
It’s no secret that New York’s many medical institutions and universities used to be more competitive than collaborative. Along with lack of affordable lab space, this has been one of the big things that has held the area back from becoming a top biotech cluster. Many factors have helped change that over the past decade or so, but one of them, Robert Darnell (pictured above, right, with Ron Cohen) said, is genomics.
The massive amount of genetic information coming from DNA sequencers—just one sequence, on a slide, would stretch “from here to Arizona”—is “both a plus and a burden,” he said. The answers to so many questions are at scientists’ fingertips, but finding them is a huge undertaking. Darnell’s lab at Rockefeller University, for instance, was getting “swamped by data.”
The best way to overcome that problem? Work together. So 12 of New York’s institutions each put $2.5 million up to seed the NYGC, pool their research, and create what is now a cross between a biotech startup and an academic institution. Darnell said that broad team effort is what makes the NYGC unique to the nation’s other large genome centers. “The scale of what needs to be done is what’s driven this collaborative nature,” Darnell said.
2. Here’s how all of this research can actually impact people.
Darnell told a story the NYGC aims to duplicate several times over: going from knowing nothing about a cancer to finding a potential drug for it in 12 months. A patient with a rare kind of liver cancer—“nothing, zero was known about this cancer,” Darnell said—decided to do something about it. She went on the Web to find others with that specific cancer, communicated with 10 others that did, and got tissue samples. She had those samples first sequenced by a lab at Johns Hopkins University (the results came up empty), and eventually by the NYGC—which did a more expensive, and thorough sequencing of all of their DNA.
Darnell said NYGC scientists looked at the information for two weeks and couldn’t find anything, until all of a sudden, a breakthrough—they identified a genetic mutation present in all of those patients. “The net result of that is it’s a druggable target, there’s a small biotech that’s got a drug that looks really useful for this,” Darnell said. “We’ll see what happens, but it’s a beautiful 12-month example of knowing zero to having a drug.”
3. Lack of early-stage venture dollars leads to creativity and quality, if not quantity, of startups.
Misti Ushio noted that the lack of early-stage venture money in New York is “obvious and is a problem,” but that local institutions have gotten creative to make up the gap—they’re pooling money for either translational grants or equity in startups. That means these institutions—be it Rockefeller, Columbia University, or others—are serving as de facto VCs, vetting research and mentoring folks on how to make their work more commercially viable.
Ushio thinks this will have a trickle-down effect that should create more quality startups, so when the VCs do come calling, these technologies will be further along. “I almost feel like because of the lack of capital, the technology that is moving through these individual, siloed programs within the institutions will create a really great cohort of early-stage companies,” she said.
4. Expect Accelerator’s New York startups to have a collaborative flavor.
Since Accelerator has come to New York, Thong Le said it’s been “inundated” with potential investment opportunities and has been winnowing them down. Accelerator expects to form at least two New York startups this year, and while it’s keeping those choices close to the vest for now, Le gave some insight into Accelerator’s strategy.
In some cases, Le said, Accelerator has spotted technology that on its own might not support a company, but could when packaged with work from another institution in “New York or elsewhere.” “We want to bring technologies together, put them together in a basket, and then create something that is then financeable and growable within the scope of New York City,” Le said. “The ability to put that together in this ecosystem is a very unique opportunity that we fully expect to exploit.”
5. “You’re no Roy Vagelos.”
George Yancopoulos and Len Schleifer had one thing in common—aside from playing on the same softball team growing up. They both idolized Roy Vagelos, who headed Merck in its glory days in the mid-80s and 90s and helped it win FDA approval of the first cholesterol-lowering statin drug, lovastatin, in 1987.
Some five years into Regeneron’s history, Yancopoulos—its scientific founder—was in Schleifer’s office with his feet up on the CEO’s desk. Things were bad at Regeneron; the stock was worth just over $1. Yancopoulos was upbeat; Schleifer was worried. “You know George, I’m beginning to worry that maybe you’re no Roy Vagelos,” he said.
But there was a solution: Vagelos was stepping down from Merck. “Maybe we should call the real Roy Vagelos and see if he’ll join us?” Well, he did. Vagelos was named chairman of Regeneron in 1995 and still holds that position. Regeneron navigated through the early dark days to become perhaps New York’s most prolific biotech. And as a side note, you’d have done well to buy some Regeneron stock back then. Shares are now worth around $443 apiece.
6. Unique to Regeneron? Its original employees stayed the course.
Biopharma is a long game. It usually takes a decade or more, and billions of dollars, to get a drug from inception to the finish line. As a result, the folks that found biotech companies and the executives that first lead them typically aren’t around when that biotech’s drug hits the market. Biotech CEOs are often switched out, for instance, when a company moves from discovery to clinical development, or intends to take itself public.
That hasn’t been the case with Regeneron. “You hear a lot about starting with the science, starting with discoveries, developing technologies, and bringing new medicines to people that make a difference. How many people do you think in the entire industry have actually done that at a company?” Yancopoulos asked the crowd, before answering, “About 20.”
“How many people like that do you think exist at Regeneron?” he followed. “About 20. And those 20 people are now the most senior leading people at the company.”