One of the questions posed to biopharmaceutical executives in Life Science Leader magazine’s 2017 annual outlook issue (published last December) was, “What innovative company or person outside of biopharma do you pay attention to?” Mitch Gold, M.D., CEO of Alpine Immune Sciences, responded, “Elon Musk has been the most innovative person outside of biopharma who’s taken a lot of personal and reputational risk to advance the electrification of America. He recognized that it’s not about the car; it’s about bringing power to the people in the form of innovative new battery technology. Initially, it wasn’t obvious why he’d merge Tesla and SolarCity, but when you think about electrifying the home and the storage challenges, it makes sense to combine capturing energy with solar panels and storing that energy locally with the Tesla wall battery. Musk believes the future of the world requires humans to be a multiplanetary species. As such, he founded SpaceX and is leading the charge of tackling this hugely audacious goal. Do we have anyone thinking this big in biopharma? CRISPR-Cas9 is probably the closest we get.” I found Gold’s response profound.
Another question, which built on the above was, “Who will be the Elon Musk of biopharma?” Julia Owen, Ph.D., and CEO of Millendo Therapeutics took a stab by responding, “I don’t believe there is an “Elon Musk” of biopharma, in large part because of the constraints of the industry itself. In biopharma, our discovery and development efforts usually happen outside of the limelight and over longer periods of time. We’ve seen breakthroughs in the past decades, including combinatorial chemistry, RNAi (RNA interference), and the sequencing of the human genome, which many predicted would fundamentally transform biopharma but have failed to dramatically alter overall timelines and costs of drug discovery and development. With those innovations have come some larger personalities, including Craig Venter (Celera) and John Maraganore (Alnylam). Other technological innovations are coming too, including more focused clinical studies — leveraging genetically directed, defined patient populations — which will drive efficiencies. But nothing appears likely to be so disruptive as to give anyone the mantle of “the Elon Musk of biotech.” The late Henri Termeer is the closest we’ve come. But even he did not transcend biopharma.” I pondered Owens’ response while putting together some thoughts for this year’s annual outlook issue and wondered, is it possible (especially given our industry’s current reputation) for a biopharmaceutical executive to transcend (i.e., become a household name) our industry. And if so, what would be required for such to occur? Toward that aim, let’s consider a few business executives from other industries who have experienced transcendence.
Business Executives Who Have Transcended Their Industries
If you think about some of the most famous business executives, who would be on your list? Some that come to mind include Henry Ford, Jack Welch, Steve Jobs, Warren Buffet, Bill Gates, Jeff Bezos, and Elon Musk (listed in no particular order). Henry Ford’s first experimental automobile hit the streets in 1896, which is about 10 years after Karl Benz, and more than 100 years later than Nicolas-Joseph Cugnot’s steam-driven road vehicle. Ford’s prominence wasn’t driven by being first with the product, but his revolution of production (i.e., the assembly line). This more-efficient means of manufacturing lowered the cost of materials and the final product, making his vehicles more accessible to all. His assembly line concept was adopted by nearly every other industry, and probably the key contributor to his transcendence.
Warren Buffet, often referred to as the Oracle of Omaha, became one of the richest men in the world, and yet he lives rather frugally. And while his frugality, along with his incredible wealth, likely contributed to his transcendence, I am of the opinion that it was his willingness to widely and openly share his opinions on investing, rather than hold them close as a form of competitive advantage, as to why he has become a household name.
Age may have played a small part in Jack Welch’s fame. For when he was appointed chairman and CEO in 1981, he was the youngest leader of GE ever. People would likely attribute his worldwide fame to his performance of increasing one of the world’s largest conglomerate’s value by 4,000 percent under his tenure (1981 – 2001), an aggressive simplification and consolidation strategy of being “either number one or number two” in every industry in which GE businesses operated, and perhaps the publication of two books on leadership after “retiring.” But I would argue it was how he handled the media while serving as CEO that really exemplified his transcendence. For though the media treated him harshly (e.g., labelling him “Neutron Jack” for all of the downsizing executed under his tenure), he didn’t close himself off from being accessible.
Steve Jobs borrowed from Henry Ford’s book, as he didn’t invent the computer, though his reinvention of it made it much more accessible to the masses. Similarly, he didn’t invent the mobile phone, but he made it much more functional. Jobs was more than happy to share his opinions — even when they were in stark contrast to those widely held. For example, the former Apple CEO often eschewed market research and is quoted as saying, “People don't know what they want until you show it to them.” There aren’t a whole lot of business executives outside the entertainment and music world to be interviewed by Rolling Stone, and yet Jobs was interviewed by the publication on numerous occasions, with the first being seven years prior to the advent of the iPod and iTunes. The key to his transcendence, along with Elon Musk’s, seems to be their ability to see the big picture and significantly impact industries outside of their own.
Bill Gates, through the creation of Microsoft and Windows, made the computer a viable business tool for just about everyone — and it made him extremely wealthy in the process. But his transcendence was likely driven by his desire to leave a legacy. Since the founding of the Bill & Melinda Gates Foundation in 2000, the organization has had a significant impact on global healthcare.
Prior to Jeff Bezos, people were struggling to figure out how to make money via the Internet. He started Amazon in 1994 with books and then branched into other products. If you stop and think about it, all Bezos really did was take a rather old idea (i.e., the mail order catalog) and put it on a digital platform. But because of the way he did it and his focus on providing excellent customer service, it has resulted in his becoming the wealthiest person in the world. Members of the media, and even the President of the United States, are happy to take shots at Bezos, and yet he and his company continue to rise above it all. Like Jobs, his transcendence involved a willingness to share his opinions and branching out beyond the core of Amazon (e.g., he owns The Washington Post and Blue Origin, a space exploration company).
What Can Biopharma Learn From The Transcendence Of Others?
The brief review of the above successful business people who have transcended their industry demonstrates that one doesn’t have to be first to market in order to transcend. Further, one does not have to be the founder of a company, but it does seem to help. For while Jobs, Bezos, Ford, Gates, and Musk were all corporate founders, Welch and Buffet rose to prominence while running well-established organizations, though both changed their respective companies (GE and Berkshire Hathaway) dramatically during their tenure. All of the above have been extremely successful and very outspoken. Can biopharma executives say the same?
The biopharmaceutical industry is traditional and conservative. And while Julia Owens sees a roadblock to a biopharmaceutical executive successfully transcending industry as being constraints of the industry itself (along with R&D requiring long time periods), I wonder if it has to be this way. Why can’t a biopharmaceutical executive be more outspoken and empowered to challenge conventional thinking? For example, when Merck’s CEO Ken Frazier took a stand against a sitting U.S. President, he became front-page news. Wouldn’t it be refreshing for a Big Pharma CEO to come out and say they’ve had enough with our industry being the media’s convenient whipping post for all that’s wrong with healthcare? Many of the above executives thrived when they were willing to speak out and look at industries and opportunities beyond what investment analysts consider as being core. For example, when GE bought RCA, it sold off much of the company’s properties, but kept NBC, putting the manufacturing conglomerate in the business of television broadcasting. Analysts didn’t like the move, but having David Letterman (whose show ran on NBC for 11 years) almost nightly complain about GE, likely was another contributor to Welch transcending.
Why can’t biopharmaceutical companies be more open about seeking therapeutics in unusual places? The majority of biopharmaceutical companies seem willing to talk about their open-innovation platforms, but few get into much detail. Many biopharmas have created some interesting partnerships, but only a few (Intrexon, Regeneron, and United Therapeutics) seem willing to truly push the innovation envelope.
Significant wealth seems to play a role in transcendence, as all of the above (with the exception of Welch who had an estimated worth in 2006 of $720 million) surpass the billionaire mark. If wealth, being a company founder, outspokenness, and a willingness to push boundaries in other industries are key transcendence contributors, then I feel we have three potential biopharma candidates, and none works for a top 10 biopharmaceutical company. Here they are in no particular order.
Who In Biopharma Has The Potential To Transcend?
Randall (R.J.) Kirk has founded a number of companies (i.e., General Injectables and Vaccines, New River Pharmaceuticals) which were sold on his path to becoming a billionaire. He is now the chairman and CEO of Intrexon (NYSE: XON), a company crossing life science boundaries working on products for animals, humans, plants, and industrial use. He is very outspoken, and is more than willing to call out those in Big Pharma for being inefficient at R&D. As of April 2016, Kirk was worth an estimated $4.6 billion. While still a far cry from the likes of Bezos and Gates, should Intrexon have a significant breakthrough that revolutionizes how a business is done, he could get there rather quickly.
Martine Rothblatt, Ph.D., is similar to Kirk in that they both are trained lawyers. However Rothblatt got her start in satellite communications, was the CEO of GeoStar, and the creator of SiriusXM Radio. She did this prior to founding the biopharmaceutical company United Therapeutics (NASDAQ: UTHR), which was motivated by her daughter being diagnosed with a life-threatening pulmonary hypertension. It seemed everyone was willing to tell Rothblatt that what she was trying to do couldn’t be done. Yet the company now has five FDA-approved products on the market, her daughter is still alive and healthy, and she has consistently been one of America’s top earning CEOs. Martine is also outspoken, having published eight books on a wide variety of topics, such as the promise and peril of digital immortality, transgenderism, transhumanism, and the apartheid of sex, just to name a few. With a net worth of $390 million, she has a ways to go to get to a billion. That being said, she certainly has pushed the innovation envelope beyond her own industry, as her company is experimenting with pig cloning and genetic modification to create organ transplants the body doesn’t reject. She’s figured out how to save 80 percent of donated lungs that end up unusable. And, she’s working on the first electric helicopter.
Leonard Schleifer, M.D., Ph.D., is the CEO of Regeneron Pharmaceuticals (NASDAQ: REGN), a company he founded in 1988 now valued at nearly $39 billion. Since its creation, the company has experienced incredible growth. For example, had you bought 100 shares of the company’s stock on April 2, 1991, you would have experiences a 1,671 percent return YTD. Schleifer’s current net worth is estimated at $1.4 billion. The executive is certainly outspoken. For example, sitting on a panel at the Forbes Healthcare Summit in December 2016, Schleifer leveled drug-pricing criticism on fellow panel members, which included John Milligan, then CEO of Gilead Sciences; David Ricks, the incoming CEO of Lilly; Jim Robinson, president at Astellas America; and Ian Read, Pfizer’s CEO. Regeneron is also pushing the innovation envelope by creating unique partnerships toward “Blue Sky” innovation. For example, in partnership with Geisinger Health System, the company has created the Regeneron Genetics Center, which is one of the world’s largest human DNA sequencing efforts. While industry analysts have questioned how such research is core to Regeneron’s mission, the company’s chief science officer, George Yancopoulos, M.D., Ph.D., with Schleifer’s support, is more than happy to address any and all doubters, as they did during the breakout session at the 2018 annual J.P. Morgan Healthcare conference.
Is It Time To Break Away From Our Conservative Roots?
There are companies in our industry that have been around for a very long time. Pfizer is older than Ford by 54 years, and GE by 43. J&J has been around 21 years longer than Amazon, Apple, and Microsoft combined! Both Pfizer and J&J are led by smart business people, but will these leaders ever transcend our industry? As it currently stands, not likely, for it is my opinion that these companies have too many lawyers and communications people overly managing their messaging. If biopharma wants to save its reputation, it needs dynamic spokespeople willing to take on the media (and the Martin Shkreli’s of the world) as I believe Kirk, Rothblatt, and Schleifer all seem willing to do. For it is time our industry receives the credit it is due. For example, remember the 2014 Ebola outbreak? I do, and I recall news outlets asking why a vaccine for Ebola hadn’t yet been developed, seeming to blame biopharma because there was no money to be made. Yet in the August 8, 2018, edition of The Wall Street Journal, p. A7, there are about three inches of space devoted to a story headlined, Ebola Vaccinations Are Set To Begin. Yet those biopharmas who played a significant part in an Ebola vaccine’s development (i.e., GSK, J&J, and Merck) aren’t acknowledged for the difference biopharma has made.
I doubt any executives who successfully transcended their industry set out to do so. They merely aspired to do things better and differently than they had ever done before. Perhaps it is time for biopharma to boldly embrace such swagger, because we are certainly doing work equal in importance and value to the Apples and Amazons of the world. So let’s start acting like such. For transcendence, like successful drug development, is an outcome of a job extremely well done, and something we could all be proud of. I for one hope to see a biopharmaceutical executive transcend beyond our industry, for that will likely be a sign that biopharma’s reputation is back where it belongs — on top.