Some companies seem to grow through sheer dynamism, absorbing and recreating their heritage as they go; others trace their roots back to the startup days and still measure their progress against their beginnings. Andrew Plump knows both environments, starting with his entry into the industry at the fabled Merck, then moving to the franchise-devouring Sanofi, and now leading a global overhaul of the R&D arm of Takeda, perhaps the world’s oldest pharma enterprise.
GREATNESS & GROWTH
Plump came to Takeda only two years ago as a youthful but seasoned biopharma scientist and executive. (See the sidebar, “From Bench to Business.”) He took on the position of Takeda’s chief medical and scientific officer (CMSO), effectively head of global R&D with a strong hand in business development and partnering at the Tokyo-based company. Takeda’s ancient origin in Japan belies its pioneering spirit, shown by its groundbreaking expeditions into the world’s other major markets — most notably in the United States with TAP, an early joint venture with Abbott eventually to become part of Takeda, and later with more ambitious advances such as the purchase of Millennium in 2008. But for Plump, the company would be a big change from Sanofi, one of Big Pharma’s youngest members. Fortunately, he says, Takeda offered an even more formative situation — one not just of growth, but of rebirth. Takeda and Sanofi also had something in common, a globalization-in-progress, that made the transition easier for him.
“There are so many wonderful facets to Japan: its history, its foundational value system, and its focus on good science,” says Plump. “But I was a little bit concerned about going to a company whose center of gravity, so dense and strong, was outside of what I perceived as the core area of innovation in biomedical research, the United States. Yet I quickly realized the model Christophe Weber and chairman Yasuchika Hasegawa were building toward was an organization that had all the greatness of a Japanese company and all the potential of a multinational company.” (See “Takeda’s New Plans for Worldwide Growth,” June 2016.)
Although the company was already committed to globalization when he arrived, Plump had the advantage of building from the ground up rather than struggling to change an already entrenched global organization. “Yasu had built up a very large global group, but it was immensely fragmented,” he says. “When Takeda bought all those companies and essentially increased its size by two- to threefold, it didn’t create any synergies; it didn’t create any centralized structures. Its cost base became very high; it was very difficult to work in such an organization. Since I arrived, R&D has been going through a very significant organizational transformation to greatly simplify ourselves, reduce our footprint, and decrease our geographical dispersion.”
Simplification has not only sped up internal communications, but also freed up resources for external collaboration, Plump explains. All but two of his direct reports now work with him in the Boston center, and the company’s more limited focus on three therapeutic areas has streamlined operations — meaning staff reductions mainly of people outside those areas: gastroenterology, oncology, and CNS, plus vaccines. He says the changes cut costs but in ways intended to concentrate resources strategically inside and outside. Just to organize into a centrally managed global group and collaborate with outsiders would bring an end to the traditional structure of Takeda. “We had to reduce our internal costs to free up capital so that we could actually do more externally, which required a cultural change along with the restructuring of our budget.”
TURNING INSIDE OUT
It would be unlikely for such sweeping change to encounter no internal resistance in the 236-year-old company. Plump says he addressed the inevitable opposition with respect and calm explanation — “creating a very clear and highly rationalized, data-driven case for change.” Personal visits and exchanges with staff throughout the organization, emphasizing the shared burden of change inside the company, reinforced the message.
In Plump’s first days on the job, Weber worked with him closely to map out how they would communicate the “case for change” in the company. Weber also gave Plump a “gift,” by ensuring the previous CMSO, Tachi Yamada, M.D., would stay on and work by his side for three months. Of course, eager to take on the job, Plump initially felt the gift might be constraining, but he soon came to appreciate its full value.
“Christophe said, ‘Tachi’s going to continue to lead your organization; you’re just going to go and meet people and learn about the organization.’ At first, I felt like I was in a straitjacket, but then I realized, this was a blessing, because it would free me to spend time understanding the group, and not just come in with my white-paper vision of what R&D should be. Instead, I could come to see what Takeda R&D should be. During that three months, I spent a lot of time learning and thinking before beginning to make changes. I first built my leadership team. Then we went out across the organization and we started talking about our case for change.”
Plump says the “case for change” program was complex because the company is distributed over three major regions, all with different kinds of social and legal contracts. But the case revolved around an intent to focus on fewer therapeutic areas and a common set of statistics: In the previous 10 years, Takeda had brought 21 new drugs to market, but most of them were regional and only two were global launches. Only four came out of its internal labs, none of them global products. Ten came from acquisitions and seven came from licensing.
“In the future, it doesn’t matter where our new products come from. The problem was with the way we had structured our budget — the vast majority of our money was going into our internal labs, yet the vast majority of our productivity was coming from our balance sheet.” The case proved quite persuasive, according to Plump, and the employees could at least see how the organization could not continue as before.
“People might react to the message by saying, ‘OK, the change you’re making, I don’t know if that’s the right change, but I understand why you’re making it.’ We were even making major staff reductions in Japan, which is a place that’s not used to that kind of thing, especially in the workforce. But every person understood the case for change.”
EXTERNALIZATION — R&D MEANS BD
A restructuring of the R&D organization around the idea of increasing external collaboration on a global scale effectively puts Plump and his team on the front lines of business development. He now routinely seeks out, sets up, and oversees strategic partnering deals for Takeda. When executives say their first goal in every partnership deal is a “win-win” outcome, it can be tempting to dismiss it as a cliché. This is where meeting Andy Plump in person can redeem the phrase: He is as animated as a young child, but he is neither deceiver nor fool.
“People are surprised when you come to the table and say, ‘Hey, what do you need to make this successful?’ But if you create a deal that the partner will be upset about a year later, it will not be the right thing for the project, and nobody wins.”
Plump says the company considers all of its R&D people as collaborators with the external partners. “Our group must have all of the technical competency and operational excellence necessary for doing external innovation — including financial transactions, venture and equity funding, alliance management, and so on.” At his urging, the company established the new Center for External Innovation inside the R&D organization, led by Dan Curran, a physician-scientist with strong partnering skills.
Plump also led a shift in incentives from rewarding chiefly internal discovery and development to an equal emphasis on externally sourced programs. Another, built-in incentive, he says, is speed to market; external candidates generally enter the company’s pipeline at the late-preclinical or clinical stages, perhaps saving up to five years in development.
“Wanting to do everything in-house is a tendency we all have as scientists because we love to create,” he says. “But now we are starting to build a new culture where ‘not-invented-here’ no longer belongs. We’re so excited about the opportunity to bring medicines to patients, to work on great science, that it doesn’t matter whether the invention comes out of our labs or someone else’s labs.” He emphasizes that the company supplies not just monetary capital, but also intellectual capital to its partners, motivating the scientists on both sides to come together as peers.
Plump cites one recent example of the “intellectual capital” approach: Takeda’s partnering deal with Ovid, a rare- CNS-disease company founded by the former CEO of Teva, Jeremy Levin (See October 2013.) The alliance involves a Takeda discovery, the compound coded TAK-935, a novel inhibitor of the enzyme cholesterol 24-hydroxylase (CH24H), which regulates cholesterol homeostasis in the brain. Takeda had done a number of dosing and disease-targeting studies before entering the agreement with Ovid to develop the drug in a rare pediatric epilepsy, now the target indication in a Phase 1b/2a trial.
The “risk-sharing” deal with Ovid stipulates the two companies will each bear 50 percent of development and commercial expenses for the drug and receive 50 percent of profits. Takeda will lead commercialization in Japan and other selected areas; Ovid, in the United States, Europe, Canada, and Israel. The deal also gives Takeda an undisclosed interest in its partner, likely in the midteen range. “We’re going to be close partners,” says Plump. “As Ovid grows and grows, we might get more and more interested. We might start to partner with it on more programs, or to own more of the company. But if it’s not successful, we’ll move in a new direction. That’s the agility we’re looking for in our externalization. It is also an example of how we are using one of our molecules to gain access to Ovid’s expertise without building it all inside. If we built all of that inside and ultimately the program died, we would be left with this large infrastructure and all these great people, and what do they do? Instead, we try to find great science outside and to partner with that great science.”
An even more primary source of outside innovation is academia. Locating Takeda R&D in Boston is no accident. Biopharma startups now contribute most of the industry’s innovative products, and academia is the source of most biopharma startups and products. In the United States, where the majority of biopharmas originate, San Francisco and Boston account for 70 percent of those companies. And Boston seems to be closing fast on its West Coast rival for the title of industry’s leading urban center. Key to the attraction of both areas is the same, however: the presence of powerhouse universities producing world-leading life sciences. When Takeda bought Millennium, it was undoubtedly for its oncology programs, but now the Boston location has global significance for the company’s entire R&D organization, strategy, and results.
Still, Plump maintains the company has sufficient presence elsewhere to tap good science as it emerges around the world. It also has a new model in the works for helping academics do drug discovery that would translate more directly into therapeutic compounds. “There are platform technologies such as small molecule chemistry or antibody production that are reasonably scalable. We can do them; almost anybody can do them. Individual-target drug discovery on those platforms can come straight out of academia. It doesn’t need biotech, venture capital, or even pharma, but it does need infrastructure and some capital to support it. We will take our expertise and support directly to academia to help implement such a drug-discovery model.”
When Plump joined the company, it had already started an “experiment” in translating academic science into commercial programs. In New York City, Takeda entered a partnership with Weill Cornell Medical School, Memorial Sloan Kettering, and Rockefeller University — the Tri-Institutional Therapeutic Drug Institute (Tri-I TDI). Under the leadership of scientist/ entrepreneur Michael Foley, the institute directs a lab staffed by 15 Takeda chemists, who produce and test molecules matching individual targets identified by academic scientists and cleared by an independent scientific advisory board. Any compounds that show commercial promise then pass to a funding entity, Bridge Medicines, a construct of Takeda and two VC firms, Deerfield and Bay City Capital. Bridge supports further human testing through proof of concept.
“The cost structure in this model is a fraction of what we would pay internally,” says Plump. “Although it’s only an experiment, it’s a really interesting experiment. Marc Tessier-Lavigne, formerly at Rockefeller and now at Stanford, is helping us build a similar program there. We’re also looking in Seattle, and obviously in Japan. I’d love to put together a half dozen or more of these programs to equal a fifth to a quarter of our internal discovery organization, in this direct interface with academia.” He says a key aspect of the program is Takeda does not own it — the model can evolve in this entrepreneurial setting without the company controlling it. “But we have first-negotiation rights to the results.”
Another example is T-CiRA (Takeda-Center for Inducible Pluripotent Stem Cell Research and Application), a translational regenerative medicine institute located within Takeda’s research center in Shonan, Japan, and run by Nobel Laureate, Shinya Yamanaka. T-CiRA houses approximately 100 scientists, led by principal investigators primarily from Dr. Yamanaka’s host institution, Kyoto University, home of CiRA. Takeda and Yamanaka are in year two of a 10-year partnership to develop therapies based on the iPSC technology.
As our Outsourced Pharma chief editor, Louis Garguilo, often reminds us, biopharma innovation begins with, and often happens entirely within, manufacturing. Of course, industry insiders know manufacturing is about much more than churning out finished units. With proper planning and design, innovation can occur at any one of its many stages, from compounding and formulation through quality testing, and probably on to even more finely defined activities. Manufacturing, in its broadest sense, is also one of the primary capabilities a large company like Takeda can offer its partners. Also important, the larger company is more likely than the typical startup to realize manufacturing must begin as early as possible in the life of a new drug.
“If you’re not thinking about manufacturability and formulation early on in your discovery program, you’ll make decisions that prove to be irreversible mistakes,” Plump says. “And if you wish to employ some of the new modalities emerging, you must address the issues around them. With cell-based therapies, modified T cells, gene therapy, biologics — if you’re not immediately thinking about manufacturing, forget it, because you will likely face cost of goods or supply chain issues. This is a huge part of what we do.”
Plump describes how Takeda’s pharmaceutical sciences group aligns discovery and development with the manufacturing group to smooth the transition from one to the other, mainly through early planning. Although compounds with advanced modalities need the earliest possible attention, even the common small molecule drug can present unexpected vagaries, as well as opportunities.
“With a small molecule therapeutic, as you go through optimization, if you just think about how to optimize potency to the target, and not about all the other properties that are necessary, you’ll make bad, irreversible decisions. It is absolutely critical to have pharmaceutical scientists with deep technical expertise around formulation, process chemistry, and other fundamentals involved early on in the lead-optimization program. We co-localize these scientists. They work together, and as they choose which molecules and which paths to take on to optimization, they’re thinking in a multi-faceted way.”
MEASURES OF PROGRESS
Whether Takeda’s “invented here and there” approach to R&D works out well in practice will hinge on the quality and performance of the pipeline it builds along with the new organization. For now, the company can measure success by the milestones it sets for itself in what Plump calls a three- to five-year process, now only in its second year. One of the key posts in Takeda R&D’s progress is how effectively it can attract high-quality partnerships and assets. The quantity is important for two reasons: first, the promise of the innovation the partners present; second, the show of confidence in Takeda suggested by the eagerness and satisfaction of the deal participants.
By those measures, which Plump clarifies as not metric- but qualitatively driven, the external drive in R&D has proceeded well. “In the past 18 months, we’ve put one acquisition and 50 partnerships in place,” he says. The selection of deal targets follows some simple criteria. Each target must: fit in one of Takeda’s three therapeutic areas; meet a high innovation standard (high unmet need; cure over incremental therapy); and, of course, have the potential of being an excellent partner.
The acquisition Plump mentions is of Ariad, completed in February of this year. Ariad brings additional hematology and oncology products into Takeda’s pipeline, and one product into its commercial portfolio: Iclusig (ponatinib), approved for treating leukemia.
“When we started to look at Ariad, we thought right away, this is a perfect fit for us strategically and culturally, and then they saw it as well. We told them we didn’t want to get into a bidding war and proposed we do an exclusive negotiation to complete the deal in two weeks. We put in a price that was very competitive, purposely. Ariad agreed to the exclusivity because we’re focused — we don’t have a billion things going on in a thousand therapeutic areas. After the essential due diligence, we came out with a great acquisition and really innovative products.”
With such a large project to run, Plump sometimes encounters issues that can keep him awake at night, but his overall excitement about the job gets him up every morning, eager and ready. He is still inspired by his original motive for joining the industry, turning cutting-edge science into new and better medicines. At times, he says, he hardly believes he can have so much fun — and still get paid for doing it.
FROM BENCH TO BUSINESS
As a young adjunct professor and post-doc physician-scientist under the tutorship of Dr. Marc Tessier-Lavigne at UCSF, Andrew Plump was on his way to a predictable academic career. It was 2001, and he was 35 years old. Tessier-Lavigne was conducting basic neurology research in axon guidance, but it was difficult to see where the work would lead in medical practice, or how soon. Then a friend invited Plump to visit his workplace — at Merck & Co. The visit awakened something in Plump, a certain impatience with the pace of translation from basic academic science to new medicines that treat human disease. He fell in love with Merck and its R&D tradition and soon forewent plans to set up his own lab after completing his post-doc, jumping into the industry instead. “It was incredibly interesting, this idea that you could take science and translate it to therapies in the environment of a large pharmaceutical company,” says Plump. “I found people at Merck who had backgrounds that were very similar to mine, who were driven, like me, and who were hyperfocused on this mission.”
After starting in the translational medicine, clinical pharmacology group, Plump worked the next 10 years at Merck. At first, he missed the academic life and thought he’d made the biggest mistake of his life, but two stronger notions took effect: The realization that his dream of applying science was now at his fingertips, and the attraction of unlimited opportunity the company and the industry offered him. He remained at Merck and eventually served as head of the discovery cardiovascular group.
At that point, he was tempted by a job offer at the NIH with Francis Collins, a post promoted by his former mentor, Marc Tessier-Lavigne. Though he finally decided against taking the job, it had stirred the desire to seek greener pastures in his career. A week later, he got a call from the previous head of the NIH, Dr. Elias Zerhouni, who had just joined Sanofi as the head of R&D. Plump soon moved to Paris and worked there for Sanofi during the next two years. But, “almost too soon,” he started to receive inquiries from Christophe Weber, the new CEO of Takeda. Plump resisted, but Weber was insistent, and after an “amazing conversation” by video conference between Paris and Tokyo, the resistance faded. Working at one of the industry’s newest companies, Plump felt himself attracted to the long tradition and values of Takeda. A corporate disruption at Sanofi, resulting in the departure of Chairman Chris Viehbacher, came at just the right time to convince Plump to make his next career move, to the ancient Tokyo-based company. “Christophe mentioned to me that if I had not had the experience in a multinational company, I wouldn’t have been the right person for the job. What I learned at Sanofi, in how to think about being in a truly global company not based in the United States, is a mindset that I now bring with me to the job every day.”