Professor Ugur Sahin, M.D., Ph.D. never wanted to be an entrepreneur. Yet, today he’s the cofounder and CEO of BioNTech, a publicly traded German biotech aspiring to develop individualized cancer medicines.
Big deal, right? After all, there have been lots of academics who have reluctantly started their own small biotechs after developing something unique in their university labs. But BioNTech (pronounced, buy-on-tech) is no small biotech; it already has a market cap closing in on $9 billion (pre-coronavirus panic selloff). And this isn’t Sahin’s first billion-dollar company — it’s his second. He says this shift in his career path happened when his frustrations came face-to-face with an opportunity.
AN EYE-OPENING EXPERIENCE
In the early 1990s, Sahin worked in Germany, first in the leukemia department at the University of Cologne, followed by eight years at the University of Saarland taking care of hematology-oncology patients by day and working in the lab at night. At the time, chemotherapy and radiation were helping patients live up to a year longer, but eventually, 95 percent would succumb to the illness. Sahin was determined to improve those odds, so he reached out to some biopharmaceutical companies to see if they would be interested in collaborating. It was an eye-opening experience.
"If you do a project with a large pharmaceutical company, sometimes you find out that the decision to continue the project isn’t based on the quality or potential of the research; it is more of a business strategy," he says. As an example, when the pharma company Sahin’s university was collaborating with decided it was no longer focusing on pursuing oncology treatments, the project was simply canceled.
By 2000, Sahin was at the University of Zurich, where he spent a year in the lab of Rolf Zinkernagel, M.D., Ph.D. (1996 Nobel Prize winner) and Hans Hengartner, Ph.D. Having worked at several university clinics and labs, Sahin had come to an important conclusion around changing cancer treatment. “At that point, we knew we were going to have to start something ourselves to give projects sufficient time to evolve."
Thus, in 2001, he founded Ganymed Pharmaceuticals, which developed highly targeted immunotherapies against cancer. Sahin, determined to stay focused on the science — and the patients — served only as its chief medical officer and as a member of the scientific advisory board; a CEO was hired to run the day-to-day operations. But Sahin soon discovered that if he wanted to stay committed to the patients and get these therapeutics to market, he also needed to be involved, at some level, with the business aspects of running Ganymed. He was evolving as an entrepreneur.
THE GREAT RECESSION: A PERFECT TIME TO START A BIOTECH?
In 2008, the German economy, Europe’s largest, entered the Great Recession. It was a difficult time in the business world, and definitely not the best time to be starting a new venture. Nevertheless, Sahin, now with seven years of experience and confidence behind him with Ganymed, saw this as the perfect time to fuel his ongoing entrepreneurial passion and start a second company. “It was an idea that had been incubating in me for almost 15 years,” he recalls. “At Ganymed, we were focused on one great product; that’s what made us successful. But I wanted to develop multiple products that could help many patients.”
To fulfill this idea, BioNTech was born in 2008. The plan was to create a company focused on individualized medicine for cancer patients, and according to Sahin, the time was perfect considering the advancements being made in next-generation sequencing as well as some of the IP that Ganymed had created.
By this time in his entrepreneurial journey, he also had a much better understanding of how long the company-building process would take. “In my first conversations with BioNTech investors, I told them this is not the usual type of company to invest in, because we will probably not have measurable results, at least in the sense of something that’s really great, within 10 years.” His point was that early innovation, which he believes should start in academia and then transition to a biopharmaceutical R&D department, not only takes time, but needs to be accompanied by visionary investors with a proclivity for patience.
When it comes to founding a company that will require money from outside investors, Sahin says it pays to be honest when showing the risk. “Show that this is what you know, and define the unknowns,” he elaborates. “Then it comes down to how you communicate with your investors so they become enthusiastic about what you do.”
Luckily, Sahin knew two investors who were not only enthusiastic about BioNTech, but they were also two of the most renowned and visionary life sciences investors out there. When Ganymed was launched, brothers Andreas and Thomas Strüngmann (founders of generics giant Hexal, which was sold to Novartis for $7.5 billion) were some of the first investors. The billionaire brothers’ positive experiences with Ganymed led them to also invest early on in BioNTech.
Of course, the Strüngmanns weren’t the only potential investors Sahin had approached; he says there were probably 30 others before the brothers came on board. “If you are insistent and persistent, you are going to meet the right people at the right time who can help you. You just need to understand who the right people are — and stick to them.”
A $270 MILLION SERIES A … AND MORE
At its initial founding, BioNTech had seed financing of €150 million (approximately $165 million). While Sahin credits Germany with being great at initiating university-type projects, he says the country really doesn’t have the tools necessary to amplify and support biopharmaceutical companies like BioNTech, which require hundreds of millions of dollars. “We were lucky to have investors who supported us until we were able to attract international investors.”
"WHEN BUILDING A BIOPHARMACEUTICAL BUSINESS, DON’T UNDERESTIMATE THE IMPORTANCE OF TIME — IT’S MORE VALUABLE THAN MONEY."
In 2014, the company did its first deal, leading to subsequent collaborative agreements with the likes of Eli Lilly, Genmab, Sanofi , Siemens, Genentech, and Genevant Sciences. Remember, though, between BioNTech’s formative years of 2008 and 2014, Sahin also was still helping run Ganymed. Then, in 2016, Ganymed was acquired by Astellas for about $1.4 billion.
Now, with only one company to focus on (and a biopharmaceutical research institute that he and his wife had founded in 2010; see “Creating A Biopharmaceutical Research Institute”), Sahin watched as BioNTech’s name became recognized in the halls of Big Pharmas such as Pfizer and Roche. To those people following the industry — but not reading scientific journals — BioNTech seemed as if it had suddenly burst onto the biopharma financing scene when it announced a massive Series A raise of $270 million in January 2018. In actuality, this represented a little more than a quarter of the money (about $950 million) already invested in the company.
In 2019, BioNTech went on a buying spree, picking up MAB Discovery’s (a developer of mAbs) operational antibody generation unit, followed by the acquisition of antibody assets and infrastructure from San Diego-based MabVax Therapeutics (a clinical-stage oncology drug development company). Then, shortly after announcing the initiation of the first-in-human Phase 1/2a trial (in collaboration with Genmab) of the bispecific antibody Duo-Body-PD-L1x4-1BB in solid tumors, BioNTech revealed the completion of a $325 million Series B financing round — one of the largest single private funding rounds for a biotechnology company in European history.
The company’s NASDAQ IPO in October 2019 raised $150 million, bringing its overall value to about $3.4 billion. As of March 2020, BioNTech was the third-largest biotech (Moderna and Genmab being the other two) to list in the past decade. Already this year, the company has published preclinical data for a first-in-kind CAR T-cell therapy approach targeting solid tumors, presented at JPM, and acquired Neon Therapeutics, a biotech developing novel neoantigen-targeted T-cell therapies, in an all-stock transaction valued at approximately $67 million. As of this writing, the company has 27 pipeline assets (one in Phase 2 and eight in Phase 1) and employs more than 1,100 at five German (and one U.S.) locations.
Sahin attests that BioNTech’s success has set the stage for the international financing of other German biopharmaceutical companies, which, like BioNTech, will require time to mature. In fact, when he looks back at his career as a “reluctant entrepreneur,” he stresses the importance of patience. “Conducting long-term research will inevitably spur opportunities. So, when building a biopharmaceutical business, don’t underestimate the importance of time — it’s more valuable than money.”
CREATING A BIOPHARMACEUTICAL RESEARCH INSTITUTE
In Germany, in 2008, when BioNTech was being founded, company CEO Ugur Sahin, M.D., Ph.D. observed a disconnect between the business sector and higher education institutions. “The purpose of a business is to develop products, while universities are focused on conducting free research,” he explains. “This scenario can impede innovation, because many of the creative research ideas that reside within universities never reach biopharmas for potential commercialization. And those that do aren’t easily understood.”
Sahin and his spouse, Özlem Tü reci, M.D., cofounder and former CEO of Ganymed Pharmaceuticals and current chief medical officer at BioNTech, began discussing the differences between these two entities. The discussions were iterative — daily, over dinner, at work, you name it. They brainstormed and pondered how they could better connect these two sides. “Companies deal with milestones, rigorous timelines, and keeping employees focused. In many research institutions, there is more freedom to let the research take you where it wants to go, so quality control and focus are not necessarily big topics,” Sahin explains.
The solution, they concluded, would hinge on involving people with a translational research mindset and creating an institutional backbone that offered the freedom to do research, but in a more quality-controlled environment that would produce more than just a publication (i.e., new drugs and diagnostics). “You need people who have an interest in connecting what they do to drug development, but not necessarily getting too bogged down in the pharmaceutical business.”
And thus, the Center for Translational Oncology (TRON) at the University Medical Center of the Johannes Gutenberg University Mainz was established in 2010 to bridge the gap between hypothesis in academic research and diagnostic drug development. But as you can imagine, creating a biopharmaceutical research institute is a huge endeavor requiring people, facilities, processes, and money. Sahin credits mentor Prof. Christoph Huber with convincing the local government that TRON would be a great investment, securing the non-profit’s first five years of funding (i.e., €15 million) from Rhineland Palatinate. “In Germany, we have a governmental structure much like states in the U.S., and these ‘states’ have budgets dedicated for academic research,” he elaborates. “This structure not only helps develop drugs, but you get a much better understanding of how a drug really works.”
A CULTURE OF SCIENTIFIC LEARNING AND INNOVATION
When Ugur Sahin, M.D., Ph.D. founded BioNTech, he wanted to ensure that every person who worked there had scientific skills and the ability to become a leader who could manage others. As such, they would then be able to disseminate the company’s “open” culture. A culture that is open means that everyone understands the vision. It means that new employees, from the very beginning, are supported and enabled to contribute transparently. “It’s about people feeling encouraged to express their opinions, concerns, and lessons learned from mistakes,” Sahin explains. “It means creating the next generation of leaders, and encouraging them to create new leaders. We are now in the fourth generation of leadership at BioNTech.”
Sahin also believes it is important for him to have Ph.D. students around, which is why BioNTech has its own Ph.D. program. A fairly common practice in Germany, this program affords the company the opportunity to identify potential star employees early in their careers. Currently, there are about 20 Ph.D. students in this program.
Through an affiliation with the University of Mainz, these students get their educations at the university while doing their research at BioNTech. And though their projects are related to company research, they are not part of any milestone-driven research. In addition, two professors serve as advisors to the students, one at the university, and Sahin at the company. The students’ evaluations are done by the university, and after three to four years, they have to write their Ph.D. theses and defend them in the usual ways. “When you work on a project this way, for four years, you are enabling the creation of innovation in a way that the student has ownership of a full project, not just parts,” he states.
In the past 20 years, Ugur Sahin has attended more than 50 Ph.D. dissertation defenses of students he has advised. “They became scientists, many working for BioNTech, others becoming professors.” He laments, though, that none of them have yet started their own companies. Though common in the U.S., it isn’t as frequent yet in Germany. While Sahin views this as a bit of a hurdle in the German education system (i.e., not promoting entrepreneurship), there are also cultural barriers. “In the U.S., if you start several companies, four fail, and one succeeds, you’re still a star.” But in Germany, given the same scenario, it would be perceived as a failing, which in Germany, has more severe consequences.
So, if the German system does not promote risk-taking, then how did Sahin succeed? “I’m more of a risk-taker because I’m not from Germany,” he laughs, crediting his parents’ immigration from Turkey to Germany when he was just a boy as predisposing him to be risk-aware — not risk-averse.