Leader In Transition

By Wayne Koberstein, Executive Editor, Life Science Leader
Follow Me On Twitter @WayneKoberstein

Total dedication to job and family leaves little room for distractions. “The reason I don’t have any hobbies is that I spend all my free time with my family,” says Carrie Cox. And the rest of time? Cox heads the life sciences company and tissue-engineering pioneer Humacyte. She took on the CEO role at Humacyte in September 2010 after decades working in the top leadership of Big Pharma companies such as Wyeth-Ayerst, Pharmacia, and most recently Schering-Plough.

She led S-P’s pharmaceuticals business from 2003 to 2009, when the company merged with Merck. In 2001, Cox was named Healthcare Businesswoman of the Year. Her mentor and partner in management at Pharmacia and Schering-Plough was Fred Hassan. (See “The Pharma Veteran” in our April 2011 issue.) Cox was arguably one of the most powerful women in the pharmaceutical industry.

Her switch from Big Pharma to a little life sciences company may surprise some people. But on closer inspection — and as Cox observes — the change no longer appears so large. Her new environment at Humacyte, a company of 25 employees, is different enough to stimulate the intellect but similar enough to allow a smooth adjustment. Perhaps the most significant change is in product types, from pharmaceuticals to Humacyte’s human, extracellular matrix-based tissues shaped into tubes, sheets, or particulate forms for grafts, filling, and repair.

The scientific team has business foremost in mind as it works toward the ultimate goal of commercialization, she says. Business goals guide team members in the science and engineering, clinical trial design, regulatory strategy, and other stations of progress in the development pathway.

A key measure of harmony between science and business in a company is the degree of participation by its members in developing its basic positioning and messages for the outside world, especially prospective partners, researchers, and opinion leaders. Cox says that about half of the staff take part in such communications. An example is a scientific paper on Humacyte’s technology published by Science Translational Medicine (Feb. 2, 2011), to which many of the staff, along with outside authors, contributed. Such collaborations help drive refinement of the standard language the company uses to introduce and describe its technology to outsiders. They also encourage cross-disciplinary interests internally. “Everyone is enjoying learning more about the other sides of the business as much as I enjoy learning more about the science,” Cox says.

One challenge that both the science and business sides of the company face together is taking a new technology into unknown regulatory ground. “Because what we are doing is extremely innovative and very cutting-edge, there are no well-worn pathways to regulatory approval,” Cox says. “The questions are as fundamental as the determination of the regulatory status of the products: Are they to be developed as devices? Drugs? Biologics? What kinds of trials need to be done? It takes a lot more work and time to answer those questions here than in Big Pharma. The goal of bringing new medical treatments to market to help patients is the same. But Humacyte is creating entirely new therapies, to address whole new treatment areas.”

Science and business in a small company must also make progress in much more austere financial circumstances than big companies generally experience, Cox observes.

“Large pharma companies are often highly profitable, while early-stage biotechs burn cash without bringing in revenues. As a businessperson, I do sometimes miss achieving company sales and earnings goals, but hopefully we’ll get there in the not-too-distant future. For now, external funding is critically important, though the focus on shareholder value is the same for both large and small companies.”

Cox says the innovative environment in small companies is energizing. “It reminds me of the sense of possibility and excitement that existed in the pharmaceutical industry early in my career, when so many major new therapies were being developed in so many different areas like hypertension, cholesterol, depression, and fertility.”

Data Before Deals
Humacyte is a private company with no current plans to go public. For now, it will focus on completing Phase 2 trials to establish human proof of concept for the cardiovascular and filler products. Even business development must await the proof-of-concept data package, Cox says.

Having data to prove concept is especially important with Humacyte’s new technology, Cox explains. “In the small-molecule field, when you talk about a concept and how you are going to prove it, even though you still have to produce the data, there is a broad common understanding of drug mechanisms. In this field, however, there is a lot of interest and a lot of excitement, but there is no clarity yet about whether the products are clearly going to work. Although the potential partners we encounter may be highly interested, the currency for the discussion is data.”

Once Humacyte secures sufficient data and reaches out for commercial partners, Cox says it will remain as flexible as possible about the type of partner it pursues. When asked whether the right partner would be a medical device, pharma, or some other kind of company, she answers, “All of the above!” With her deep experience and connections in Big Pharma, she sees a natural potential for partnering in that sector, as well as a growing interest in tissue engineering and other forms of regenerative medicine. “Products from the entire field of regenerative medicine will need Big Pharma’s infrastructure and ability to bring products to the market,” she says. But, she believes some device and drug/device companies can also offer the right commercial capabilities. “So the fun thing is that there are no restrictions on how the discussion can evolve with our technology. There are obvious synergies and great ways to partner with a whole host of different types of companies.”

Both product lines, starting with an engineered graft for coronary artery bypass (CABG) surgeries and a tissue filler for soft tissue repair, have similar professional audiences: mainly surgeons. “There are already pathways to deal with that customer base clearly developed in those industry segments,” Cox says. “The user base is not dramatically different from what you see already in the world of devices and pharmaceuticals.”

On the filler side, however, few options exist compared to the CABG field. “We are looking at potential uses in areas like facial reconstruction, maybe even postlumpectomy, places now where there are not a lot of alternatives. So the procedures are still happening, but the choices and tools that physicians have are pretty limited. It creates the challenge of not having a clear pathway forward, but to me that is the exciting part about it,” she says.

Scale Down
Cox has moved not only to a smaller company, but also to a much smaller business sector. Tissue engineering is like a niche within a niche within a niche—a subset of regenerative medicine, itself a subset of other areas such as surgery. Compared to pharmaceuticals, the difference in scale is obvious. Cox’s previous company, Schering-Plough, had roughly $18 billion in annual sales, whereas the entire market for CABG stents is only about $7 billion. Even if Humacyte were to become a fully integrated commercial company, which is not in its plans, it would be unlikely to exceed the size of leading stent-producer Boston Scientific with sales of about $8 billion.
But looked at as platform technology with distinct advantages, Humacyte’s extracellular matrix approach may have currently unpredictable potential. The technology uses human allogeneic cells grown on a polyglycolic acid scaffold in shapes needed for patients who lack access to autologous tissue or cannot tolerate synthetic grafts. (With CABG, that amounts to about 100,000 U.S. patients per year.)

If the initial vascular and filler products succeed, many other applications are possible. If they do not succeed, all bets may be off. It is a classic example of how the choice of lead product candidates and indications can determine whether any of a platform’s other useful applications ever see the light of day.

“Our major area of focus is to create ‘off-the-shelf’ replacement blood vessels for patients who may need an alternative in procedures such as coronary bypass surgery or hemodialysis access,” Cox says. “But we are continuing to discover that our basic platform technology has many different potential uses, and we are exploring other therapeutic needs as well.” She says other future applications could include diseases of aging, malformations such as cleft palate, and new orthopedic uses.

The Future View
Humacyte is still at a quite early stage, as a company and in its platform development. Cox says it should be able to combine Phase 1 and 2a trials because the products are quite device-like, safety and early efficacy studies can be combined, and dose ranging is not generally needed. “Beyond that step, there will need to be bigger discussions with the regulators about what a true Phase 3 clinical program needs to look like,” she says. “And in regenerative medicine, the regulators are not completely certain how they want to manage particular issues; it is still an evolving topic.”

Physicians and regulators may view Humacyte’s products as more device-like, primarily focusing on product function and safety issues such as rates of infection and intimal hyperplasia, both frequent problems with current grafts. “It is not the same kind of profile you typically see with an oral product in the pharmaceutical industry,” Cox observes.

Long term, the typical choices for any company like Humacyte are to be acquired or to partner in ways that allow it to continue developing its platform. A third, increasingly seen option is to sprout a small marketing and sales wing for covering a targeted customer base. But for now, the company should concentrate solely on the “huge range of possibilities” for its technology, Cox says. “This is a major technology platform that could be developed and continue to yield new products for many years.”

Despite the differences in technological and regulatory challenges, financial resources, and markets, Cox believes small and large companies have much more in common than is generally recognized. “The basic business principles and operating mechanisms are the same, large or small. Teams are teams, wherever you find them, with similar needs and goals. People want to do great work that has an impact, regardless of the size of the company. I’ve found the concern around the transition from a big to small company to be overrated. Don’t overanalyze it. Think it through, but if you think it’s right for you, it probably is.”

Big To Small

On the path that led to joining Humacyte, CEO Carrie Cox made a decision to move to a new environment — from a large to a small company, from the huge pharmaceutical sector to the niche field of tissue engineering, and from a commercial to a science and engineering organization. This is her brief account of that transition:

“I decided after Schering-Plough ended that I wanted to focus the next chapter of my career on great science. I want to be part of bringing important innovations to patients. I trained as a pharmacist and always had a special connection to patients. So when I think about great science, I think of it in terms of the patient impact we can have.

“I wasn’t familiar with the field of biomedical engineering and regenerative medicine. But as I learned more about it, I became very excited about the chance to be part of creating a whole new field of medical therapies. Humacyte’s main focus is on creating new human veins that can be taken ‘off the shelf’ at the time of surgery for vascular procedures such as CABG surgery. For patients who can’t provide their own graft vein due to illness or complications, this can be a potentially life-saving option. That’s pretty exciting to be part of.

“Of course, learning a new area of science and medicine is challenging, though enormously engaging; the level of science and innovation at Humacyte is so high, I’ll be happy when I can follow all the details of the scientific debates! It will be a long time until I’m as conversant in regenerative medicine as I have been in, say, small molecules. Yet the ability to participate in creating a whole new field of medicine is a major part of why I joined Humacyte.”

Veteran Views

Over the years, Carrie Cox has learned a thing or two about the management of science-driven businesses. Cox also shares her views, drawn from her experience, on some especially critical issues for the entire life sciences industry, expressed in terms of how top management should act.

Managing Scientists: “In working with a group whose talents are very different from your own, it can take more listening, questioning, and learning, but the goal is still to add value to their work. My best advice is not to try to be a scientific expert when you’re not, but add value with your business perspective.”

Layoffs: “Treat every employee with respect, but make the decisions and communicate them as fast as possible. Though it is not always possible, try very hard to use the principle of meritocracy. People want certainty in a merger; prolonged uncertainty almost always damages the business. I favor rapid integrations whenever possible. Layoffs are very painful for everyone, and delaying the process isn’t doing anyone a favor.”

Communicating with Nonmanagers: “Although there is no substitute for face-to-face communication, the most effective approach is to use a broad variety of communication vehicles to reach as many people as possible. Town hall meetings, small group meetings, webinars, newsletters, and, judiciously, emails — use them all. In live presentations, always try to include a Q&A session, however large or small the group. Communicating with the broad organization is like turning the proverbial battleship; it’s slower than you think. So it helps to make it into a dialogue and create a rhythm of communication that is comfortable for all parties.”