Three Profiles: When Big Pharma Execs Opt to Lead Biotech Startups
Published: May 08, 2018 By Mark Terry
Pharmaceutical execs who leave their positions with big pharmaceutical companies, unless opting to retire for good, often move to leadership positions at other big companies. There are other choices, however. Many take their golden parachutes and join venture capital firms and spend their time, energy, experience and resources on funding biotech startups. In some cases, the executives decide they want to use their experiences to lead a biotech startup. Here’s a look at a couple high-profile examples.
#1. In 2013, Jeremy Levin stepped down as the chief executive officer of Israel-based Teva Pharmaceuticals. Reportedly his departure was related to tensions between Levin, his management team and the company’s board of directors, especially over cost-cutting and layoffs. He had taken over the chief executive officer position only the year before, in May 2012. Prior to leading Teva, Levin was an senior vice presient of strategy, alliances and transactions with Bristol-Myers Squibb, noted for leading the company’s “string of pearls” partnering strategy.
After some time off, Levin then joined biotech company Ovid Therapeutics, with offices in New York City and Cambridge, Massachusetts, first as chairman starting in April 2014, then adding on chief executive officer in March 2015. Ovid focuses on developing therapies for rare and orphan diseases of the brain.
In 2017, he led the company to a $75 million initial public offering. Today the company has a market cap of $219.1 million. At the company’s recent first-quarter earnings, Ovid reported $87.1 million in cash and cash equivalent, a net loss of $11 million, but a lively and promising pipeline. It recently completed patient enrollment in the Phase II STARS clinical trial of OV101 in adults and adolescents with Angelman syndrome and expects topline data in the third quarter. It wrapped a successful Phase I trial of the drug in adolescents with Angelman syndrome or Fragile X syndrome in November 2017. It expects to soon begin enrolling patients in a Phase I trial of the drug in Fragile X syndrome. The drug was recently granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for both Angelman syndrome and Fragile X syndrome.
The company also has ongoing clinical trials for TAK-935/OV935 in patients with epileptic encephalopathies (dEE), which also has FDA orphan drug designations for Dravet syndrome and Lennox-Gastaut syndrome.
In a 2017 interview with FierceBiotech, Levin, when asked about the jump to a smaller company, said, “I have definitely enjoyed it; going from a large company to a small company allowed me to try and articulate certain values and beliefs that I had tried to infuse in a big company, but I realized, you can’t change culture in a big company; but conversely, you have to create a culture in a small company.”
#2. Edward Kaye served as Sarepta Therapeutics’ chief medical officer from June 2011 to April 2017. From March 2015 to September 2016, he was the company’s interim chief executive officer, and from September 2016 to June 2017 he was president and chief executive officer. When he left Sarepta, he planned to take time off before tackling another company, but said he had about six offers in a matter of weeks. He then took on the role of chief executive officer and director of Bedford, Massachusetts-based Stoke Therapeutics.
The company launched in January 2018 with Kaye at the helm with a $40 million Series A financing round entirely funded by founding investor Apple Tree Partners. Its focus is on using antisense olignonucleotides developed by the company’s scientific founder, Arian Krainer, of Cold Spring Harbor Laboratory.
In March of this year, Stoke presented early research on its pipeline at the Oligonucleotide & Peptide Therapeutics Boston Conference. The company’s work is currently preclinical, fosuing on Dravet syndrome, a severe form of epilepsy.
In April, the company expanded its leadership team, bringing on Gene Liau as executive vice president and head of research and preclinical development, and Meena (apparently the sole name) as vice president of bioanalytical, DMPK and biomarker development.
When asked why he left Sarepta to join a startup, Kaye told Xconomy, “Sarepta is much more of a commercial stage company now. What I really liked is the development—picking a target, taking it into the clinic, and going through the approval process. I like these difficult problems when it comes to developing therapies for patients, and I really wanted to do it one more time.”
#3. George Scangos was the chief executive officer and board member of Biogen from July 2010, until he left in the summer of 2017 to act as chief executive officer and director of South San Francisco-based Vir Biotechnology, which launched with him at the head in January 2017. Vir focuses on developing treatments for viral and bacterial infectious diseases, utilizing immune programming to manipulate pathogen-host interactions. The company launched in January 2017 with a $150 million investment from ARCH Venture Partners.
In a statement at the time the company launched, Scangos said, “The opportunity to lead Vir is one I could not pass up. There is a tremendous global need for effective therapies and preventions for infectious diseases of considerable public health importance. Success would mean alleviation of a lot of human suffering as well as meaningful financial returns for Vir investors. The science has matured to a point where exciting new approaches are at hand, and there is a need for a company to pursue those approaches with excellence, critical mass and scale. Vir is that company, and I am very excited to take on a leadership role.”
Although every executives’ reasons for moving to a smaller startup is likely different, a common theme seems to be the excitement of drug development, as opposed to the eventual commercialization of drugs, which are very different things. It may also be the way they can see change affected as well. A large company, pharmaceutical otherwise, can be like steering an aircraft carrier—it takes time to see a change in direction. But in smaller biotechs, the decisions are often immediate and significant to the life of the company.