As we wrap up my conversation with Tony Coles, M.D., the upcoming subject of a Life Science Leader magazine feature, I ask the CEO of Yumanity Therapeutics if there is anything he’d like to add. “Something that is really important to me is this notion of courage,” he begins. According to Coles, the appropriate use of analytics can make it pretty clear what a business leader needs to do when faced with a growth opportunity. But it is the process of execution, or lack thereof, that make running a business difficult. “Success is largely driven by the amount of courage a leader has,” he attests.
A few years ago, Coles says he had to find such courage. “When I was at Onyx Pharmaceuticals, we had decided to buy a company, and I knew there was no shareholder — zero — who would be happy with the choice I was making,” he continues. “Such decision making requires courage.” It was 2009, and Onyx had agreed to acquire Proteolix, a privately-held biopharmaceutical company focused on discovering and developing novel therapies for the treatment of hematological malignancies and solid tumors. The acquisition cost Onyx $276 million in cash and various milestone payments adding up to about $800 million. Proteolix's lead compound was carfilzomib, a proteasome inhibitor that was in multiple clinical trials, including an advanced Phase 2b clinical trial for patients with relapsed and refractory multiple myeloma.
When the decision to acquire Proteolix was leaked, Onyx Pharmaceutical’s stock seemed to lose momentum. A 2010 Seeking Alpha article attributed the company’s stock decline to investors’ skepticism, which was sufficient enough to neutralize all of the company’s good news from the clinical trials of carfilzomib, as well as its own compound in development for kidney and liver cancer, Nexavar. “Every time the stock attempted to rally on good news, it gave back its gains and lost more than it had added until it was boxed around $20/share, down from a 52-week high of $36.59,” the website wrote. But Coles turned out to be right and was given credit for being so by Adam Feuerstein, formerly of TheStreet. In an August 2013 article, Feuerstein wrote, “Every biotech CEO wants to say they bought an asset for X and sold it for 10X, yet few top executives manage to create value on this mammoth scale.” Feuerstein goes on to note that if it hadn’t been for Coles’ commitment to by Proteolix, Amgen would never have paid $10 billion to acquire Onyx. “If we borrow the lesson from Roy Vagelos and have the courage to always do the right thing, that’s a great moral compass for any leader, no matter who you are,” Coles concludes.